[Federal Register Volume 84, Number 24 (Tuesday, February 5, 2019)]
[Proposed Rules]
[Pages 1641-1652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00869]


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

  Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / 
Proposed Rules  

[[Page 1641]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 54

[No. AMS-LP-16-0080]


Amendments to the Regulations Governing Meats, Prepared Meats, 
and Meat Products (Grading, Certification, and Standards)

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Agriculture's (USDA) Agricultural 
Marketing Service (AMS) proposes to amend its regulations to update a 
number of outdated administrative and organizational references, 
clarify agency action as it relates to the withdrawal or denial of 
service, update the official shields and grademarks associated with the 
grading service, and make reference to the use of instrument grading 
equipment as a means of determining official grades on beef and lamb 
carcasses.

DATES: Comments must be received by April 8, 2019.

ADDRESSES: Comments should be submitted electronically at 
www.regulations.gov. Comments may also be submitted to: Dana K. Stahl, 
Chief, Grading Services Branch, Quality Assessment Division (QAD); 
Livestock and Poultry Program, AMS, USDA; 1400 Independence Avenue SW; 
Room 3932-S, STOP 0258; Washington, DC 20250-0258. Comments will be 
made available for public inspection at Room 3932-S of the above 
address during regular business hours or electronically at 
www.regulations.gov. Comments received will be posted without change, 
including any personal information provided. All comments should 
reference the docket number AMS-LP-16-0080, the date of submission, and 
the page number of this issue of the Federal Register.

FOR FURTHER INFORMATION CONTACT: Dana K. Stahl, Chief, Grading Services 
Branch, QAD, Livestock and Poultry Program, AMS, USDA; 1400 
Independence Avenue SW; Room 3932-S, STOP 0258; Washington, DC 20250-
0258; (202) 690-3169; or email to [email protected].

SUPPLEMENTARY INFORMATION: 

Executive Orders 12866 and 13771, and Regulatory Flexibility Act

    This rulemaking does not meet the definition of a significant 
regulatory action contained in section 3(f) of Executive Order 12866 
and is not subject to review by the Office of Management and Budget 
(OMB). Additionally, because this rule does not meet the definition of 
a significant regulatory action it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs''' (February 2, 2017).
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) [5 U.S.C. 601 et seq.], the Administrator of AMS 
has considered the economic effect of this action on small entities and 
has determined that this proposed rule does not have a significant 
economic impact on a substantial number of small business entities. The 
purpose of RFA is to fit regulatory actions to the scale of businesses 
subject to such actions in order that small businesses will not be 
unduly burdened.
    AMS has determined that this proposed rule will not have a 
significant impact on a substantial number of small entities, as 
defined by RFA, because the user-fee services are not subject to 
scalability based on the business size.
    Currently, approximately 235 applicants subscribe to AMS's 
voluntary, fee-for-services that are subject to the requirements of 
this regulation. The U.S. Small Business Administration's Table of 
Small Business Size Standards matched to the North American Industry 
Classification System (NAICS) Codes identifies small business size by 
average annual receipts or by the average number of employees at a 
firm. This information can be found at 13 CFR parts 121.104, 121.106, 
and 121.201.
    AMS requires that all applicants for service provide information 
about their company for the purpose of processing bills. Information 
collected from an applicant includes company name, address, billing 
address, and similar information. AMS does not collect information 
about the size of the business. However, based on working knowledge of 
these operations, AMS estimates that roughly 72 percent of current 
applicants may be classified as small entities. It is not anticipated 
that this action would impose additional costs to applicants, 
regardless of size. Current applicants will not be required to provide 
any additional information to receive service. The effects of this 
proposed rule are not expected to be disproportionately greater or 
lesser for small applicants than for large applicants.
    AMS is committed to complying with the E-Government Act of 2002 to 
promote the use of the internet and other information technologies to 
provide increased opportunities for citizen access to government 
information and services, and for other purposes. Accordingly, AMS 
developed options for companies requesting service to do so 
electronically.
    The USDA has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this proposed rule.

Executive Order 13175

    This action 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 would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have 
retroactive effect. The Act prohibits states or political subdivisions 
of a state to impose any requirement that is in addition to, or 
inconsistent with, any requirement of the Act. There are no civil 
justice implications associated with this proposed rule.

[[Page 1642]]

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 [44 U.S.C. 
Chapter 35], this proposed rule would not change the information 
collection and recordkeeping requirements previously approved and would 
not impose additional reporting or recordkeeping burden on users of 
these voluntary services.
    The information collection and recordkeeping requirements of this 
part have been approved by OMB under 44 U.S.C. Chapter 35 and have been 
assigned OMB Control Number 0581-0128.
    In September 2014, three separate OMB collections--OMB 0581-0127, 
OMB 0581-0124, and OMB 0581-0128--were merged, such that the current 
OMB 0581-0128 pertains to Regulations for Voluntary Grading, 
Certification, and Standards and includes 7 CFR parts 54, 56, 62, and 
70.

Background and Proposed Revisions

    The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.), 
herein after referred to as the ``Act,'' directs and authorizes the 
Secretary of Agriculture to facilitate the competitive and efficient 
marketing of agricultural products. AMS programs support a strategic 
marketing perspective that adapts product and marketing decisions to 
consumer demands, changes domestic and international marketing 
practices, and incorporates emerging technology. AMS provides impartial 
grading and certification services that ensure agricultural products 
meet specified requirements. These services are voluntary, with users 
paying for the cost of the requested service. AMS grading services 
verify that product meets USDA grade standards (e.g., USDA Choice) and 
certify that products meet requirements defined by the company or 
another third-party. Product characteristics such as manner of cut, 
color, and other quality attributes can be directly examined by an AMS 
employee or an authorized agent to determine if product requirements 
have been met. The product can be identified as ``USDA Prime,'' ``USDA 
Choice,'' ``USDA Select,'' ``USDA Certified,'' ``USDA Accepted as 
Specified,'' or ``USDA Further Processing Certification Program.''

Administrative and Organizational Revisions

    In 2012, an organizational merger within AMS combined the Livestock 
and Seed Program and Poultry Programs into the Livestock, Poultry, and 
Seed (LPS) Program. Subsequently, the LPS Program created the Quality 
Assessment Division (QAD) to oversee services carried out by the Audit 
Services Branch, Grading Services Branch, Standardization Branch, and 
the Business Operations Branch. The Grading Services Branch administers 
grading and certification services that were performed by the former 
Meat Grading and Certification Branch of the former Livestock and Seed 
Program and the former Grading Branch of Poultry Programs. In 2018, 
another organizational change caused the LPS Program to be renamed the 
Livestock and Poultry (LP) Program.
    Meat grading and certification activities are carried out under 7 
CFR 54, while poultry and shell egg grading and certification 
activities are carried out under 7 CFR 70 and 7 CFR 56, respectively.
    AMS proposes to update a number of administrative and 
organizational references to reflect the current terminology and 
structure of AMS. These amendments would include amending Sec.  54.1 to 
change the LPS Program to the Livestock and Poultry Program. Certain 
terms and definitions would be added to, updated in, or deleted from 
Sec.  54.1 to reflect the current organizational structure within the 
Agency. The term and definition for Livestock would be removed from the 
regulation because the use of this definition was fundamentally the 
same as the definition of Animals. The term and definitions for 
Contract Verification Service would be removed from Sec.  54.1 because 
this service is no longer provided, a conforming change would be made 
to Sec.  54.4 Kind of Service. The definition for Animals would be 
revised to add ``bison,'' as the Agency certifies bison; Chief would be 
revised to identify the Grading Services Branch Chief; Division would 
be revised to identify QAD and appropriately reflect its level within 
the organization; Meat by-products would be revised to exclude brain 
derived from ruminant animals, which is no longer allowed per food 
safety regulations; and the term Standards would be replaced with 
Official Standards and its definition would be revised for consistency 
within the regulation. The terms Yield Grade and Appeal Service and 
their respective definitions would be added to identify the different 
types of grading service offered under the regulations. The terms 
Program and Deputy Administrator and their respective definitions would 
be added to appropriately recognize the office and leadership within 
the current organizational structure of the Agency.
    Since this regulation has not received significant revisions for 
some time, AMS proposes to bring it into compliance with The Plain 
Writing Act of 2010, which requires all Federal agencies to write clear 
Government communication that the public can understand and use. To 
accomplish this, AMS is focusing on appropriate pronoun use, omitting 
unnecessary words, and writing short sentences.
    To reflect organizational changes and for consistency with other 
changes to this regulation, AMS proposes to amend Sec.  54.4 Kind of 
Service, Sec.  54.6 How to Obtain Service, Sec.  54.7 Order of 
Furnishing Service, Sec.  54.8 When Request for Service Deemed Made, 
Sec.  54.9 Withdrawal of Application or Request for Service, and Sec.  
54.10 Authority of Agent.
    AMS also proposes to amend Sec.  54.5 Availability of Service by 
removing language that states service will be provided without 
discrimination, as this is a duplicative statement of a requirement 
that is mandated through Departmental regulations, not by AMS. AMS 
proposes to amend Sec.  54.6 How to obtain service by increasing the 
length of time between cancellation of commitment service and 
reapplication for commitment service from 1 to 2 years, and the 
applicant is responsible for reimbursing relocation costs incurred by 
the Agency to transfer the grader.
    AMS proposes to remove the reference to the Medium grade for lamb, 
yearling lamb, mutton, and pork carcasses in Sec.  54.11 (a)(1)(vii). 
The official standards for grades of lamb and mutton carcasses were 
amended in October 1940 (Amendment No. 1 to S.R.A. 123) to change the 
grade designations Medium and Common to Commercial and Utility, 
respectively. In April 1968, the official standards for pork carcasses 
were revised and the former Medium and Cull grades were combined and 
renamed U.S. Utility. Removing the reference to Medium in Sec.  54.11 
(a)(1)(vii) aligns the regulatory language with the language contained 
within the official standards.

Clarify Agency Action on Denial or Withdrawal of Service

    AMS proposes to create a stair-stepped approach regarding denial or 
withdrawal of Grading Branch services. As written, Sec.  54.11 requires 
AMS to go before an administrative law judge to hear a case for an 
applicant accused of misconduct before any action can be taken; the 
process and actions currently identified in this part limit AMS's 
ability to effectively manage its services, including denying, 
withdrawing, or suspending services in a timely manner when warranted 
for reasons of

[[Page 1643]]

misconduct. Therefore, AMS is clarifying that it relies first on the 
Supplemental Rules of Practice in 7 CFR 50 and then, if necessary, uses 
the Rules of Practice Governing Formal Adjudicatory Proceedings 
Instituted by the Secretary Under Various Statues set forth in 7 CFR 
1.130 through 1.151 when denying, withdrawing, or suspending services 
to applicants. An applicant would still have an opportunity for a 
hearing before an administrative law judge before any permanent action 
occurs.
    The regulations outlined in this part are intended to describe to 
the public how AMS provides grading and certification services and the 
related processes, not provide instruction to employees or repeat 
requirements covered by another Federal regulation. In this vein, AMS 
proposes to remove and reserve for future use Sec.  54.12 Financial 
interest of official grader. USDA graders and other employees are 
required to meet and maintain Departmental ethics requirements; 
therefore, AMS has determined that it is unnecessary to maintain this 
administrative item in this regulation. AMS also proposes to remove and 
reserve Sec.  54.14 Official certificates, which removes the 
Agricultural Products Certificate Form LS-5-3 and the Applicant Charges 
Certificate Form LS-5-5 that were discontinued in 2009; instead, the 
information contained on these forms is entered into a database. If 
applicants require an official certificate from USDA, an official 
memorandum is issued containing the pertinent information.
    In 2001, vision-based instrument technology was approved for use in 
the official determination of the size of the ribeye area. In 2007, it 
was approved for yield grade determination, and in 2009, it was 
approved for marbling assessment. Although this technology has been 
used as an aid in the application of official USDA beef grades in since 
2001, the current regulations make no mention of it. AMS considers the 
use of instrument technology to be an important option for determining 
degrees of marbling in meat carcasses and yield and, therefore, is 
adding a reference to it in Sec.  54.15.
    AMS proposes to appropriately identify and reference figures within 
Sec.  54.17. Currently, multiple figures in that section contain the 
same reference, Figure 1, which makes it difficult to appropriately 
reference a particular figure. AMS proposes to remove the Carcass Data 
Service orange ear tag from Sec.  54.17, because the Agency no longer 
prints or maintains them and instead allows cattle enrolled in the 
Carcass Data Service to be identified through other approved methods. 
AMS proposes to appropriately identify and reference in Sec.  54.17 the 
USDA Further Processing Certification Program shield used to identify 
product produced under the USDA Further Processing Certification 
Program. Additionally, AMS proposes to amend language within this 
section to accurately identify the USDA Hold tag that is now used in 
place of the USDA Product Control tag; the tag is now ``red'' in color 
as opposed to ``orange.''
    With Sec.  54.19, AMS proposes to remove the heading APPEAL 
SERVICE, rename Sec.  54.19 as Appeal of a grading service decision, 
reassign amended language from Sec. Sec.  54.20 through 54.26 under 
Sec.  54.19 (a) through (h), and subsequently reserve Sec. Sec.  54.21 
through 54.26.
    AMS proposes to rename Sec.  54.20, Exemptions. The proposed 
amendments would identify the requirements within the regulation where 
exemptions are most commonly provided and identify an option for 
exemptions as seen fit by the Director. It also would require the 
Director to approve all exemptions to this regulation. In doing so, AMS 
proposes to amend language pertaining to grading exemptions from 
Sec. Sec.  54.4, Kind of service, 54.5 Availability of service, and 
54.13, Accessibility and refrigeration of products; access to 
establishments.
    AMS proposes to remove and reserve Sec.  54.30 Errors in service. 
AMS proposes that Sec.  54.30 is most appropriately covered under a 
policy or procedure rather than a regulation; therefore, AMS proposes 
that it is unnecessary to maintain this administrative item in this 
regulation.
    Lastly, AMS proposes to replace the title and language of Sec.  
54.31 Uniforms with the title OMB Control Number. AMS believes the 
subject of uniforms is more appropriate under a policy rather than a 
regulation. AMS proposes to add language under this section that 
clearly identifies the OMB control number, OMB 0581-0128, assigned to 
this regulation in accordance with the Paperwork Reduction Act.

List of Subjects in 7 CFR 54

    Food grades and standards, Food labeling, Meat and meat products, 
Poultry and poultry products.

    For the reasons set forth in the preamble, AMS proposes to amend 7 
CFR 54 as follows:

PART 7 CFR 54-MEATS, PREPARED MEATS, AND MEAT PRODUCTS (GRADING, 
CERTIFICATION, AND STANDARDS)

0
1. The authority citation for 7 CFR 54 continues to read as follows:

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

0
2. Amend Sec.  54.1 by:
0
a. Revising the definitions of Administrator and Animals;
0
b. Adding in alphabetical order the term Appeal service;
0
c. Revising the definitions of Branch and Chief;
0
d. Removing the term and definition for Contract verification service;
0
e. Adding in alphabetical order the term Deputy Administrator;
0
f. Revising the definitions of Director, Division, and Institutional 
Meat Purchase Specifications;
0
g. Removing the term and definition for Livestock;
0
h. Revising the definition of Meat by-products;
0
i. Adding in alphabetical order the terms Official standards and 
Program;
0
j. Revising the definition of Service;
0
k. Removing the term and definition for Standards.
    The additions and revisions read as follows:


Sec.  54.1  Meaning of words and terms defined.

* * * * *
    Administrator. The Administrator of the Agricultural Marketing 
Service (AMS), or any officer or employee of the AMS to whom authority 
has been or may be delegated to act in the Administrator's stead.
* * * * *
    Animals. Bison, cattle, goats, sheep, swine, or other species 
identified by the Administrator.
* * * * *
    Appeal service. Appeal service is a redetermination of the class, 
grade, other quality, or compliance of product when the applicant for 
the appeal service formally challenges the correctness of the original 
determination.
* * * * *
    Branch. The Grading Services Branch of the Division.
* * * * *
    Chief. The Chief of the Grading Services Branch, or any officer or 
employee of the Branch to whom authority has been or may be delegated 
to act in the Chief's stead.
* * * * *
    Deputy Administrator. The Deputy Administrator of the Program, or 
any

[[Page 1644]]

other officer or employee of the Program to whom authority has been or 
may be delegated to act in the Deputy Administrator's stead.
    Director. The Director of the Division, or any officer or employee 
of the Division to whom authority has been or may be delegated to act 
in the Director's stead.
* * * * *
    Division. The Quality Assessment Division of the Livestock and 
Poultry Program.
* * * * *
    Institutional Meat Purchase Specifications. Specifications 
describing various meat cuts, meat products, and meat food products 
derived from species covered in the definition of Animals above, 
commonly abbreviated ``IMPS,'' and intended for use by any meat 
procuring activity. For labeling purposes, only product certified by 
the Grading Services Branch may contain the letters IMPS on the product 
label.
* * * * *
    Meat by-products. All edible parts, other than meat and prepared 
meats, and except as otherwise limited by 9 CFR 310.22, intended for 
human food, derived from one or more animals, and including but not 
limited to such organs and parts as livers, kidneys, sweetbreads, 
lungs, spleens, stomachs, tripe, lips, snouts, and ears.
* * * * *
    Official standards. Official standards refer to the United States 
Standards for Grades of Carcass Beef; the United States Standards for 
Grades of Veal and Calf Carcasses; the United States Standards for 
Grades of Lamb, Yearling Mutton, and Mutton Carcasses; and/or the 
United States Standards for Grades of Pork Carcasses.
* * * * *
    Program. The Livestock and Poultry Program of the Agricultural 
Marketing Service.
    Service. Services offered by the Grading Services Branch such as 
Grading Service, Certification Service, and Carcass Data Service.
* * * * *
0
3. Revise Sec.  54.4 to read as follows:


Sec.  54.4  Kind of service.

    (a) Grading Service consists of the determination, certification, 
and identification of the class, grade, or other quality attributes of 
products under applicable official standards.
    (b) Certification Service consists of the determination, 
certification, and identification of products to an approved 
specification. Determination of product compliance with specifications 
for ingredient content or method of preparation may be based upon 
information received from the inspection system having jurisdiction 
over the products involved.
    (c) Carcass Data Service consists of the evaluation of carcass 
characteristics of animals identified with an approved ear tag to 
applicable official standards or specifications, and the recording and 
transmitting of the associated data to the applicant or a party 
designated by the applicant.
0
4. Revise Sec.  54.5 to read as follows:


Sec.  54.5  Availability of service.

    Service under these regulations may be made available to products 
shipped or received in interstate commerce. It also may be made 
available to the products not shipped or received if the Director or 
Chief determines that the furnishing of service for such products would 
facilitate the marketing, distribution, processing, or utilization of 
agricultural products through commercial channels. Service will be 
furnished for products only if they were derived from animals 
slaughtered in federally inspected establishments or operated under 
state meat inspection in a state other than one designated in 9 CFR 
331.2. Service may be furnished for imported meat only if an exemption 
to do so is granted by the Director as described in Sec.  54.20.
0
5. Revise Sec.  54.6 to read as follows:


Sec.  54.6   How to obtain service.

    (a) Application. Any person may apply for service with respect to 
products in which he or she has a financial interest by completing the 
required application for service. In any case in which the service is 
intended to be furnished at an establishment not operated by the 
applicant, the application shall be approved by the operator of such 
establishment and such approval shall constitute an authorization for 
any employee of the Department to enter the establishment for the 
purpose of performing his or her functions under the regulations. The 
application shall include:
    (1) Name and address of the establishment at which service is 
desired;
    (2) Name and post office address of the applicant;
    (3) Financial interest of the applicant in the products, except 
where application is made by representative of a Government agency in 
the representative's official capacity;
    (4) Signature of the applicant (or the signature and title of the 
applicant's representative);
    (5) Indication of the legal status of the applicant as an 
individual, partnership, corporation, or other form of legal entity; 
and
    (6) The legal designation of the applicant's business as a small or 
large business, as defined by the U.S. Small Business Administration's 
North American Industry Classification System (NAICS) Codes.
    (b) Notice of eligibility for service. The applicant will be 
notified whether the application is approved or denied.
    (c) Request by applicant for service: (1) Noncommitment. Upon 
notification of the approval of an application for service, the 
applicant may, from time-to-time as desired, make oral or written 
requests for service to be furnished with respect to specific products. 
Such requests shall be made at an office for grading either directly or 
through an AMS employee.
    (2) Commitment. If desired, the applicant may request to enter into 
an agreement with AMS to furnish service on a weekly commitment basis, 
where the applicant agrees to pay for 8 hours of service per day, 5 
days per week, Monday through Friday, excluding Federal legal holidays 
occurring Monday through Friday on which no grading and certification 
services are performed, and AMS agrees to make an official grader 
available to provide service for the applicant. However, AMS reserves 
the right to use any official grader assigned to a commitment applicant 
to perform service for other applicants when, in the opinion of the 
Chief, the official grader is not needed to perform service for the 
commitment applicant. In those instances, the applicant will not be 
charged for the work of the grader assigned to his or her facility.
    (3) If an applicant who terminates commitment grading service 
requests service again within a 2-year period from the date of the 
initial termination, the applicant will be responsible for all 
relocation costs associated with the grader assigned to fulfill the new 
service agreement. If more than one applicant is involved, expenses 
will be prorated according to each applicant's committed portion of the 
official grader's services.
0
6. Revise Sec.  54.7 to read as follows:


Sec.  54.7   Order of furnishing service.

    Service shall be furnished to applicants in the order in which 
requests are received. Preference will be given, when necessary, to 
requests made by any government agency or any regular user of the 
service, and to requests for appeal service under Sec.  54.19.
0
7. Revise Sec.  54.8 to read as follows:

[[Page 1645]]

Sec.  54.8  When request for service deemed made.

    A request for service is considered made when received by the 
designated office as identified on the Application for Service form. 
Records showing the date and time of the request shall be made and 
maintained in the designated office.
0
8. Revise Sec.  54.9 to read as follows:


Sec.  54.9   Withdrawal of application or request for service.

    An application or a request for service may be withdrawn by the 
applicant at any time before the application is approved or prior to 
performance of service. In accordance with Sec. Sec.  54.27 and 54.28, 
any expenses already incurred by AMS in connection with the review of 
an application or fulfilling a request for service is the 
responsibility of the applicant.
0
9. Revise Sec.  54.10 to read as follows:


Sec.  54.10  Authority of agent.

    Proof that any person making an application or a request for 
service on behalf of any other person has the authority to do so may be 
required at the discretion of the Director or Chief.
0
10. Amend Sec.  54.11 by revising paragraph (a)(1) introductory text, 
and paragraphs (a)(1)(i) through (iii), (vii), (x), and (a)(2) to read 
as follows:


Sec.  54.11  Denial, conditional withdrawal, or suspension of service.

    (a) * * * (1) Basis for denial or withdrawal. An application or a 
request for service may be rejected, or the benefits of the service may 
be otherwise denied to, or withdrawn from, any person who, or whose 
employee or agent in the scope of the individual's employment or 
agency:
    (i) Has willfully made any misrepresentation or has committed any 
other fraudulent or deceptive practice in connection with any 
application or request for service;
    (ii) Has given or attempted to give, as a loan or for any other 
purpose, any money, favor, or other thing of value, to any employee of 
the Department authorized to perform any function;
    (iii) Has interfered with or obstructed, or attempted to interfere 
with or to obstruct, any employee of the Department in the performance 
of his or her duties under the regulations by intimidation, threats, 
assaults, abuse, or any other improper means;
* * * * *
    (vii) Has applied the designation ``US'' or ``USDA'' and ``Prime,'' 
``Choice,'' ``Select,'' ``Good,'' ``Standard,'' ``Commercial,'' 
``Utility,'' ``Cutter,'' ``Canner,'' ``Cull,'' ``No. 1,'' ``No. 2,'' 
``No. 3,'' ``No. 4,'' ``Yield Grade 1,'' ``Yield Grade 2,'' ``Yield 
Grade 3,'' ``Yield Grade 4,'' ``Yield Grade 5,'' ``USDA Accepted as 
Specified,'' by stamp or text enclosed within a shield, or brand 
directly on any carcass, wholesale cut, or retail cut of any carcass, 
or has applied the afore mentioned designations including ``USDA 
Certified,'' and ``USDA Further Processing Certification Program'' on 
the marketing material associated with any such product as part of a 
grade designation or product specification;
* * * * *
    (x) Has in any manner not specified in this paragraph violated 
subsection 203(h) of the Act: Provided, that paragraph (a)(1)(vi) of 
this section shall not be deemed to be violated if the person in 
possession of any item mentioned therein notifies the Director or Chief 
without delay that the person has possession of such item and, in the 
case of an official device, surrenders it to the Chief, and, in the 
case of any other item, surrenders it to the Director or Chief or 
destroys it or brings it into compliance with the regulations by 
obliterating or removing the violative features under supervision of 
the Director or Chief: And provided further, that paragraphs (a)(1) 
(ii) through (ix) of this section shall not be deemed to be violated by 
any act committed by any person prior to the making of an application 
of service under the regulations by the principal person. An 
application or a request for service may be rejected or the benefits of 
the service may be otherwise denied to, or withdrawn from, any person 
who operates an establishment for which that person has made 
application for service if, with the knowledge of such operator, any 
other person conducting any operations in such establishment has 
committed any of the offenses specified in paragraphs (a)(1) (i) 
through (x) of this section after such application was made. Moreover, 
an application or a request for service made in the name of a person 
otherwise eligible for service under the regulations may be rejected, 
or the benefits of the service may be otherwise denied to, or withdrawn 
from, such a person:
    (A) In case the service is or would be performed at an 
establishment operated:
    (1) By a corporation, partnership, or other person from whom the 
benefits of the service are currently being withheld under this 
paragraph; or
    (2) By a corporation, partnership, or other person having an 
officer, director, partner, or substantial investor from whom the 
benefits of the service are currently being withheld and who has any 
authority with respect to the establishment where service is or would 
be performed; or
    (B) In case the service is or would be performed with respect to 
any product with which any corporation, partnership, or other person 
within paragraph (a)(1)(x)(A)(1) of this section has a contract or 
other financial interest.
    (2) Procedure. All cases arising under this paragraph shall be 
initially conducted in accordance with the Supplemental Rules of 
Practice in part 50 of this chapter. Any issue unable to be resolved 
under part 50 shall be resolved or handled in accordance with the Rules 
of Practice Governing Formal Adjudicatory Proceedings Instituted by the 
Secretary Under Various Statutes set forth in Sec. Sec.  1.130 through 
1.151 of this title.
* * * * *


Sec.  54.12   [Removed and Reserved]

0
11. Remove and reserve Sec.  54.12.
0
12. Revise Sec.  54.13 to read as follows:


Sec.  54.13  Accessibility and refrigeration of products; access to 
establishments; suitable work environment; and access to records.

    (a) The applicant shall make products easily accessible for 
examination, with appropriate and adequate illuminating facilities, in 
order to disclose their class, grade, other quality characteristics, 
and compliance with official standards or other contractual 
requirements for which service is being provided. Supervisors of 
grading and other employees of the Department responsible for 
maintaining uniformity and accuracy of service shall have access to all 
parts of establishments covered by approved applications for service 
under the regulations, for the purpose of examining all products in the 
establishments that have been or are to be graded or examined for 
compliance with specifications or which bear any marks of grade or 
compliance.
    (b) Grading service will be furnished only for meat that an 
official grader determines is chilled so that grade factors are 
developed to the extent that a proper grade determination can be made 
in accordance with the official standards. Meat that is presented in a 
frozen condition is not eligible for a grade determination.
    (c) Applicants are responsible for providing a work environment 
where official graders are not subjected to physical and/or verbal 
abuse, or other elements that could have a negative effect on providing 
an unbiased, third-party evaluation. Applicants shall designate primary 
company

[[Page 1646]]

representatives to discuss grade placements and certification 
determinations with official graders.
    (d) Applicants will make products and related records (approved 
labeling, technical proposals, quality plans, specifications, end 
product data schedules, grade volume information, etc.) easily 
accessible and provide assistance and any equipment necessary to 
accomplish the requested services. Equipment may include storage 
lockers/cabinets, branding ink, certified scales, food blenders, 
processors, grinders, sampling containers, sanitation equipment, 
thermometers, adequate lighting, weight tags, display monitors, video 
equipment for monitoring live animal schedules, etc. When offering 
product for grading or certification, applicants must ensure a minimum 
of 90 percent acceptable product.
    (e) Applicants will provide a metal cabinet(s) or locker(s) for the 
secure storage of official meat grading equipment and identification 
devices for each official meat grader assigned to their establishment. 
Such cabinet(s) or locker(s) must be capable of being locked with a 
Government-owned lock and be located in an easily-accessible and secure 
location within the applicant's establishment.


Sec.  54.14  [Removed and reserved]

0
13. Remove and reserve Sec.  54.14.
0
14. Revise Sec.  54.15 to read as follows:


Sec.  54.15   Instrument grading.

    (a) Applicants may use USDA-approved technologies to augment the 
official USDA grading process for approved species presented for 
official grading. This voluntary program may be utilized by a plant at 
its discretion but must comply with QAD procedures to be recognized and 
relied upon by the official grader in conducting official duties.
    (b) Applicants have the option to augment quality and yield grading 
services through the use of vision-based instrument technology. 
Instrument grading may be used as an option for determining degrees of 
marbling and yield factors for meat carcasses. AMS approves the grading 
instrument itself and its use within individual applicant facilities. 
Applicants may contact grading supervision to initiate the process for 
in-plant approval. The process for instrument grading approval at an 
applicant's facility is dictated through internal procedures. Final 
determination of quality and yield grades is made by the official 
grader.
0
15. Revise Sec.  54.16 to read as follows:


Sec.  54.16   Marking of products.

    All products examined for class and grade under the official 
standards, or the immediate containers and the shipping containers, 
shall be stamped, branded, or otherwise marked with an appropriate 
official identification. Except as otherwise directed by the Director, 
such markings will not be required when an applicant desires only an 
official memorandum. The marking of products, or their containers, as 
required by this section shall be done by official graders or under 
their immediate supervision.
0
16. Revise Sec.  54.17 to read as follows:


Sec.  54.17   Official identifications.

    (a) A shield enclosing the letters ``USDA'' and identification 
letters assigned to the grader performing the service, as shown in 
Figure 1 to paragraph (a), constitutes a form of official 
identification under the regulations for preliminary grade of 
carcasses. This form of official identification may also be used to 
determine the final quality grade of carcasses; one stamp equates to 
``USDA Select'' or ``USDA Good''; two stamps placed together vertically 
equates to ``USDA Choice''; and three stamps placed together vertically 
equates to ``USDA Prime.''
[GRAPHIC] [TIFF OMITTED] TP05FE19.000

    (b) A shield enclosing the letters ``USDA'' as shown in Figure 2 to 
paragraph (b) with the appropriate quality grade designation ``Prime,'' 
``Choice,'' ``Select,'' ``Good,'' ``Standard,'' ``Commercial,'' 
``Utility,'' ``Cutter,'' ``Canner,'' or ``Cull,'' as provided in the 
United States Standards for Grades of Carcass Beef, the United States 
Standards for Grades of Veal and Calf Carcasses, and the United States 
Standards for Grades of Lamb, Yearling Mutton, and Mutton Carcasses; 
and accompanied by the class designation ``Bullock,'' ``Veal,'' 
``Calf,'' ``Lamb,'' ``Yearling Mutton,'' or ``Mutton,'' constitutes a 
form of official identification under the regulations to show the 
quality grade, and where necessary, the class, under said standards, of 
steer, heifer, and cow beef, veal, calf, lamb, yearling mutton, and 
mutton. The identification letters assigned to the grader performing 
the service will appear underneath and outside of the shield.

[[Page 1647]]

[GRAPHIC] [TIFF OMITTED] TP05FE19.001

    (c) A shield enclosing the letters ``USDA'' and the words ``Yield 
Grade,'' as in Figure 3 to paragraph (c), with the appropriate yield 
grade designation ``1,'' ``2,'' ``3,'' ``4,'' or ``5'' as provided in 
the United States Standards for Grades of Carcass Beef and the United 
States Standards for Grades of Lamb, Yearling Mutton, and Mutton 
Carcasses, constitutes a form of official identification under the 
regulations to show the yield grade under said standards. When yield 
graded, bull and bullock carcasses will be identified with the class 
designation ``Bull'' and ``Bullock,'' respectively. The identification 
letters assigned to the grader performing the service will appear 
underneath and outside of the shield.
[GRAPHIC] [TIFF OMITTED] TP05FE19.002

    (d) For combined quality and yield grade identification purposes 
only, a shield enclosing the letters ``US'' on one side and ``DA'' on 
the other, with the appropriate yield grade designation number ``1,'' 
``2,'' ``3,'' ``4,'' or ``5,'' and with the appropriate quality grade 
designation of ``Prime,'' ``Choice,'' ``Select,'' ``Good,'' 
``Standard,'' ``Commercial,'' ``Utility,'' ``Cutter,'' ``Canner,'' or 
``Cull'' shown in Figure 4 to paragraph (d) constitutes a form of 
official identification under the regulations to show the quality and 
yield grade under said standards. The identification letters assigned 
to the grader performing the service will appear underneath and outside 
of the shield.

[[Page 1648]]

[GRAPHIC] [TIFF OMITTED] TP05FE19.003

    (e) Under the regulations, for yield grade identification purposes 
only, a shield enclosing the letters ``US'' on one side and ``DA'' on 
the other, and with the appropriate yield grade designation number 
``1,'' ``2,'' ``3,'' ``4,'' or ``5'' as shown in Figure 5 to paragraph 
(e) constitutes a form of official identification under the regulations 
to show the yield grade under said standards. The identification 
letters assigned to the grader performing the service will appear 
underneath and outside of the shield.
[GRAPHIC] [TIFF OMITTED] TP05FE19.004

    (f) For quality grade identification only, a shield enclosing the 
letters ``US'' on one side and ``DA'' on the other with the appropriate 
quality grade designation of ``Prime,'' ``Choice,'' ``Select,'' 
``Good,'' ``Standard,'' ``Commercial,'' ``Utility,'' ``Cutter,'' 
``Canner,'' or ``Cull'' as shown in Figure 6 to paragraph (f) 
constitutes a form of official identification under the regulations to 
show the yield grade under said standards. The identification letters 
assigned to the grader performing the service will appear underneath 
and outside of the shield.

[[Page 1649]]

[GRAPHIC] [TIFF OMITTED] TP05FE19.005

    (g) The letters ``USDA'' with the appropriate grade designation 
``1,'' ``2,'' ``3,'' ``4,'' ``Utility,'' enclosed in a shield as shown 
in Figure 7 to paragraph (g), as provided in the Official United States 
Standards for Grades of Pork Carcasses, constitutes a form of official 
identification under the regulations to show the grade under said 
standards of barrow, gilt, and sow pork carcasses.
[GRAPHIC] [TIFF OMITTED] TP05FE19.006

    (h) The following constitute forms of official identification under 
the regulations to show compliance of products:

[[Page 1650]]

[GRAPHIC] [TIFF OMITTED] TP05FE19.007

    (i) The following, as shown in Figure 10 to paragraph (i), 
constitutes official identification to show quality system 
certification.
[GRAPHIC] [TIFF OMITTED] TP05FE19.008

    (j) The following, as shown in Figure 11 to paragraph (j), 
constitutes official identification to show that products produced 
under USDA AMS supervision that meet specified requirements may carry 
the ``USDA Certified'' statement and/or ``USDA Certified'' shield, so 
long as each is used in direct association with a clear description of 
the standard or other requirement(s) to which the product claims to be 
certified.
    (1) The ``USDA Certified'' shield must replicate the form and 
design of the example in Figure 11 and must be printed legibly and 
conspicuously:
    (i) On a white background, with the term ``USDA'' in white 
overlaying a blue upper third of the shield and the term ``Certified'' 
in black overlaying a white middle third of the shield, with no terms 
in the red lower third of the shield; or
    (ii) On a white or transparent background with a black trimmed 
shield, with the term ``USDA'' in white overlaying a black upper third 
of the shield and the term ``Certified'' in black overlaying the white 
or transparent remaining two-thirds of the shield.
    (2) Use of the ``USDA Certified'' statement and the ``USDA 
Certified'' shield shall be approved in writing by the Director prior 
to use by an applicant.

[[Page 1651]]

[GRAPHIC] [TIFF OMITTED] TP05FE19.009

    (k) The following, as shown in Figure 12 to paragraph (k), 
constitutes official identification to show product or services 
produced under an approved USDA Further Processing Certification 
Program (FPCP):
    (1) Products produced under an approved USDA FPCP may use the 
``USDA Further Processing Certification Program'' statement and the 
``USDA Further Processing Certification Program'' shield, and
    (2) The USDA Further Processing Certification Program shield must 
replicate the form and design of the example in Figure 12 and must be 
printed legibly and conspicuously:
    (i) On a white background, with the term ``USDA'' in white 
overlaying a blue upper third of the shield and the terms ``USDA 
Further Processing Certification Program'' in black overlaying a white 
middle third of the shield, with no terms in the red lower third of the 
shield; or
    (ii) On a white or transparent background with a black trimmed 
shield, with the term ``USDA'' in white overlaying a black upper third 
of the shield and the terms ``USDA Further Processing Certification 
Program'' in black overlaying the white or transparent remaining two-
thirds of the shield.
    (3) Use of the ``USDA Further Processing Certification Program'' 
statement and the ``USDA Further Processing Certification Program'' 
shield shall be approved in writing by the Director prior to use by an 
applicant.
[GRAPHIC] [TIFF OMITTED] TP05FE19.010

    (l)(1) One device used by official graders is the LP-36 Form, a 
rectangular, serially numbered, red tag on which a shield encloses the 
words ``USDA Hold,'' constitutes a form of official identification 
under the regulations for meat and meat products.
    (2) Official graders and supervisors of grading may use ``USDA 
Hold'' tags or other methods and devices as approved by the 
Administrator for the identification and control of meat and meat 
products that are not in compliance with the regulations or are held 
pending the results of an examination. Any such meat or meat product 
identified shall not be used, moved, or altered in any manner; nor 
shall official control identification be removed, without the expressed 
permission of an authorized representative of the USDA.
0
17. Revise Sec.  54.18 to read as follows:


Sec.  54.18  Custody of identification devices.

    All identification devices used in marking products or their 
containers, including those indicating compliance with approved 
specifications, shall be kept in the custody of the Branch, and 
accurate records shall be kept by the Branch of all such devices. Such 
devices shall be distributed only to persons authorized by the 
Department, who will keep the devices in their possession or control at 
all times.
0
18. Remove undesignated center heading APPEAL SERVICE.
0
19. Revise Sec.  54.19 to read as follows:


Sec.  54.19  Appeal of a grading service decision.

    Appeal service is a redetermination of the class, grade, other 
quality, or compliance of product when the applicant for the appeal 
service formally challenges the correctness of the original 
determination.
    (a) Authority to request appeal service. A request for appeal 
service with respect to any product may be made by any person who is 
financially interested in the product when that person disagrees with 
the original determination as to class, grade, other quality, or 
compliance of the product as shown by the markings on the product or 
its containers, or as stated in the applicable official memorandum.
    (b)Requesting appeal service. A request for appeal service shall be 
filed

[[Page 1652]]

with the Chief. The request shall state the reasons for appeal and may 
be accompanied by a copy of any previous official report, or any other 
information that the applicant may have received regarding the product 
at the time of the original service. Such request may be made orally 
(including by telephone) or in writing (including by email). If made 
orally, the person receiving the request may require that it be 
confirmed in writing.
    (c) Determining original service from appeal service. Examination 
requested to determine the class, grade, other quality, or compliance 
of a product that has been altered or has undergone a material change 
since the original service, or examination of product requested for the 
purpose of obtaining an official memorandum and not involving any 
question as to the correctness of the original service for the product 
involved shall be considered equivalent to original service and not 
appeal service.
    (d) Not eligible for appeal service. Grade determinations cannot be 
appealed for any lot or product consisting of less than 10 similar 
units or carcasses. Moreover, appeal service will not be furnished with 
respect to product that has been altered or has undergone any material 
change since the original service.
    (e) Withdrawal of appeal service. A request for appeal service may 
be withdrawn by the applicant at any time before the appeal service has 
been performed; however, the applicant is responsible for payment of 
any expenses incurred by the Branch towards providing the appeal 
service prior to withdrawal.
    (f) Denial or withdrawal of appeal service. A request for appeal 
service may be rejected or such service may be otherwise denied to or 
withdrawn from any person, without a hearing, in accordance with the 
procedure set forth in Sec.  54.11(b), if it appears that the person or 
product involved is not eligible for appeal service under Sec.  
54.19(a) and (b), or that the identity of the product has been lost; or 
for any of the causes set forth in Sec.  54.11(b). Appeal service may 
also be denied to, or withdrawn from, any person in any case under 
Sec.  54.11(a).
    (g) Who performs appeal service. Appeal service shall be performed 
by the National Meat Supervisor or his or her designee.
    (h) Appeal service report. Immediately after appeal service has 
been performed for any products, a report shall be prepared and issued 
referring specifically to the original findings and stating the class, 
grade, other quality, or compliance of the products as shown by the 
appeal service.
0
20. Revise Sec.  54.20 to read as follows:


Sec.  54.20  Exemptions.

    Any exemption to the regulations must be approved by the Director. 
Exemptions may include but are not limited to:
    (a) Grading the meat of animals in other than carcass form if the 
class, grade, and other quality attributes may be determined under the 
applicable standards.
    (b) Grading in an establishment other than where the animal was 
slaughtered or initially chilled if the class, grade, and other quality 
attributes can be determined under the applicable standards, and if the 
identity of the carcasses can be maintained.
    (c) If the Branch is unable to provide grading service in a timely 
manner and the meat can be identified in conformance with the 
standards.
    (d) Grading in the establishment other than where the hide is 
removed, provided the meat can be identified in conformance with the 
standards.
    (e) Grading meat of imported animals, provided:
    (1) The imported meat is marked so that the name of the country of 
origin is conspicuous to the USDA grader. The mark of foreign origin 
shall be imprinted by roller brand, handstamp, tag, or other approved 
method.
    (2) The imprints of the mark of foreign origin have been submitted 
to the Chief for the determination of compliance with these regulations 
prior to use on meats offered for Federal grading.
    (3) The applicant notifies the official grader performing the 
service whenever imported meat is offered for grading.
    (f) For good cause and provided that the meat can be identified in 
conformance with the standards.


Sec. Sec.  54.21-54.26  [Removed and reserved]

0
21. Remove and reserve Sec. Sec.  54.21 through 54.26.


Sec.  54.30  [Removed and reserved]

0
22. Remove and reserve Sec.  54.30.
0
23. Revise Sec.  54.31 to read as follows:


Sec.  54.31  OMB control number.

    The information collection and recordkeeping requirements of this 
part have been approved by OMB under 44 U.S.C. Chapter 35 and have been 
assigned OMB Control Number 0581-0128.

    Dated: January 29, 2019.
Bruce Summers,
Administrator.
[FR Doc. 2019-00869 Filed 2-4-19; 8:45 am]
BILLING CODE 3410-02-P