[Federal Register Volume 88, Number 11 (Wednesday, January 18, 2023)]
[Rules and Regulations]
[Pages 2798-2812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-00693]



[[Page 2798]]

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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 352, 354, 362, and 412

[Docket No. FSIS-2019-0019]
RIN 0583-AD78


Prior Label Approval System: Expansion of Generic Label Approval

AGENCY: Food Safety and Inspection Service (FSIS), U.S. Department of 
Agriculture (USDA).

ACTION: Final rule.

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SUMMARY: FSIS is amending its regulations to expand the circumstances 
under which it will generically approve the labels of meat, poultry, 
and egg products. Also, as of the effective date of this final rule, 
FSIS will no longer evaluate generically approved labels that 
establishments and egg products plants voluntarily submit for FSIS 
review. FSIS is also announcing the availability of revised guidelines 
on the types of labels that must be submitted to FSIS for approval.

DATES: This rule is effective March 20, 2023. Submit comments on the 
revised FSIS Guideline for Label Approval on or before February 17, 
2023.

ADDRESSES: A downloadable version of the revised FSIS Guideline for 
Label Approval is available to view and print at https://www.fsis.usda.gov/inspection/compliance-guidance. No hard copies of the 
guideline have been published.
    FSIS invites interested persons to submit comment on the revised 
FSIS Guideline for Label Approval. Comments may be submitted by one of 
the following methods.
     Federal eRulemaking Portal: This website 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 https://www.regulations.gov. Follow the on-line instructions at that site for 
submitting comments.
     Mail: Send to Docket Clerk, U.S. Department of 
Agriculture, Food Safety and Inspection Service, 1400 Independence 
Avenue SW, Mailstop 3758, Washington, DC 20250-3700.
     Hand- or Courier-Delivered Submittals: Deliver to 1400 
Independence Avenue SW, Jamie L. Whitten Building, Room 350-E, 
Washington, DC 20250-3700.
    Instructions: All items submitted by mail or electronic mail must 
include the Agency name and docket number FSIS-2019-0019. Comments 
received in response to this docket will be made available for public 
inspection and posted without change, including any personal 
information, to https://www.regulations.gov.
    Docket: For access to background documents or comments received, 
call (202) 720-5627 to schedule a time to visit the FSIS Docket Room at 
1400 Independence Avenue SW, Washington, DC 20250-3700.

FOR FURTHER INFORMATION CONTACT: Rachel Edelstein, Assistant 
Administrator, Office of Policy and Program Development, by telephone 
at (202) 205-0495.

SUPPLEMENTARY INFORMATION:

Executive Summary

    FSIS is finalizing its September 14, 2020, proposal to expand the 
circumstances in which FSIS will generically approve the labels of 
meat, poultry, and egg products (85 FR 56538). This final rule will 
expand generic approval to products only intended for export that 
deviate from domestic labeling requirements and permit generic approval 
of the labels of products that receive voluntary FSIS inspection. This 
final rule will also expand generic approval to: (1) ``Organic'' claims 
that appear in a product label's ingredients statement; (2) 
``Geographic landmarks'' displayed on a product label; (3) ``Negative'' 
claims made on product labels that identify the absence of certain 
ingredients or types of ingredients. Furthermore, as of the effective 
date of this final rule, FSIS will no longer evaluate generically 
approved labels voluntarily submitted to the Agency for review. FSIS 
will, however, continue to provide industry with relevant resources, 
including updated generic labeling guidance, and timely answers to 
generic labeling questions via phone, askFSIS, and the Small Plant Help 
Desk.
    Considering these changes, FSIS has revised and reissued the FSIS 
Guideline for Label Approval \1\ to provide the public with updated 
information on the types of labels that must be submitted to FSIS for 
approval consistent with this final rule.
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    \1\ The latest revision of the FSIS Guideline for Label Approval 
is available at: https://www.fsis.usda.gov/inspection/compliance-guidance.
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    As is shown in Table 1, this final rule has net benefits of 
$799,507, annualized at the 7 percent discount rate over 10 years. Of 
which, industry will experience cost savings of $517,888, annualized at 
the 7 percent discount rate over 10 years, from the reduction in 
preparing and submitting certain labels for FSIS evaluation. FSIS will 
experience cost savings of $281,619, annualized at the 7 percent 
discount rate over 10 years, from the reduction in label evaluations. 
This final rule does not create any new cost burden for industry or 
FSIS.

                          Table 1--Net Benefits
                             [Cost savings]
------------------------------------------------------------------------
                                                       Annualized net
                                                    benefit (7% discount
                                                       rate, 10 years)
------------------------------------------------------------------------
Industry..........................................              $517,888
Agency............................................               281,619
                                                   ---------------------
    Total.........................................               799,507
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Table of Contents

I. Background
II. Final Rule
III. Summary of Comments and Responses
    A. Industry Compliance and Agency Oversight
    B. Cost of Label Review
    C. Increase in Deficient Labels
    D. Organic Claims
    E. Negative Claims
    F. Certified Claims
    G. Temporary Label Approval
    H. Voluntary Submissions
    I. Geographic Landmark Claims
    J. Front of Pack Nutrition Statements
    K. Miscellaneous Comments
IV. Executive Orders 12866 and 13563
V. Regulatory Flexibility Act Assessment
VI. Paperwork Reduction Act
VII. USDA Non-Discrimination Statement
VIII. E-Government Act
IX. Executive Order 12988, Civil Justice Reform
X. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments
XI. Environmental Impact
XII. Additional Public Notification

I. Background

    The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.), 
Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.), and Egg 
Products Inspection Act (EPIA) (21 U.S.C. 1031 et seq.) (hereinafter, 
``the Acts'') direct the Secretary of Agriculture to maintain 
inspection programs designed to ensure that meat, poultry, and egg 
products are safe, wholesome, not adulterated, and properly marked, 
labeled, and packaged. These laws prohibit the sale of products under 
any false or misleading name, marking, or labeling and require the 
Secretary to approve product marking and labeling (21 U.S.C. 457(c), 
607(d), and 1036(b)). The Department's longstanding interpretation \2\ 
of these provisions is that they require the Secretary or his or her 
representative to

[[Page 2799]]

approve all labels to be used on federally inspected and passed, 
domestic and imported, meat, poultry and egg products, before the 
products may be distributed in commerce. To implement these provisions, 
FSIS uses a prior approval program for labels on federally inspected 
meat, poultry, and egg products (9 CFR part 412). Without approved 
labels, meat, poultry, and egg products may not be sold, offered for 
sale, or otherwise distributed in commerce.
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    \2\ See, e.g., 60 FR 67444, December 29, 1995; 76 FR 75809, 
75810, December 5, 2011; 78 FR 66826, November 7, 2013; 85 FR 56538, 
56539, September 14, 2020.
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    To receive FSIS approval, meat, poultry, and egg product labels 
must comply with the Acts and the labeling regulations implemented 
thereunder. As discussed in the proposed rule (85 FR 56538, 56539), the 
regulations contain provisions to ensure that no statement, word, 
picture, design, or device that is false or misleading in any 
particular, or that conveys any false impression, or that gives any 
false indication of origin, identity, or quality, appears in any 
marking or other labeling (9 CFR 317.8, 381.129, and 590.411(f)(1)). 
Also, as discussed in the proposed rule, FSIS regulations require that 
meat, poultry, and egg product labels display up to eight features, to 
ensure that consumers have the information necessary to make informed 
purchasing decisions (85 FR 56538, 56539). The required features 
include: (1) The standardized, common or usual, or descriptive name, of 
the product (9 CFR 317.2(c)(1) and (e), 381.117, and 590.411(c)(1)); 
(2) an ingredients statement containing the common or usual name of 
each ingredient of the product listed in descending order of 
predominance (9 CFR 317.2(c)(2) and (f), 381.118, and 590.411(c)(1)); 
(3) the name and place of business of the manufacturer, packer, or 
distributor (9 CFR 317.2(c)(3) and (g), 381.122, and 590.411(c)(2)); 
(4) an accurate statement of the net quantity of contents (9 CFR 
317.2(c)(4) and (h), 381.121, and 590.411(c)(4)); (5) the inspection 
legend, including the number of the official establishment \3\ (9 CFR 
312.2(b), 317.2(c)(5) and (i), 381.96, 381.123, and 590.411(c)(5)); (6) 
a handling statement if the product is perishable, e.g., ``Keep 
Frozen'' or ``Keep Refrigerated'' (9 CFR 317.2(k), 381.125(a), and 
590.410(a)(1)-(2)); (7) nutrition labeling for applicable meat and 
poultry products (9 CFR part 317, subpart B; part 381, subpart Y; and 
590.411(e)); \4\ and (8) safe handling instructions if the meat or 
poultry component of the product is not ready-to-eat (9 CFR 317.2(l) 
and 381.125(b)). In addition, imported meat, poultry, and egg products 
must bear the country of origin under the product name (9 CFR 
327.14(b)(1), 381.205(a), and 590.950(a)(2)).
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    \3\ For purposes of this document, the term ``establishment'' 
includes official meat and poultry establishments and egg products 
plants, unless otherwise indicated.
    \4\ Nutrition labeling for egg products must comply with the 
provisions of 21 CFR part 101, promogulated under the Federal Food, 
Drug, and Cosmetic Act and the Fair Packaging and Labeling Act [9 
CFR 590.411(e)].
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    Under the prior label approval program, certain categories of 
labels receive ``sketch approval,'' meaning they must be submitted to 
FSIS for review and approval before use. However, FSIS regulations 
allow some product labels that bear all required labeling features and 
comply with the Agency's labeling regulations to be ``generically 
approved'' (9 CFR 412.2(a)(1)), meaning they may be used in commerce 
without prior FSIS review. Establishments, therefore, do not need to 
submit generically approved labels to FSIS' Labeling and Program 
Delivery Staff (LPDS) for evaluation. Instead, as discussed in the 
proposed rule, Inspection Program Personnel (IPP) perform surveillance 
and enforcement tasks in the field to verify that generically approved 
labels comply with labeling requirements (85 FR 56538, 56543).
    Generic label approval has been in place in some form since 1983 
(48 FR 11410, March 18, 1983). FSIS previously expanded the categories 
of labeling claims eligible for generic approval in 1995 (60 FR 67444, 
December 29, 1995). FSIS completed an assessment of the modified system 
in 1998 (76 FR 75809, December 5, 2011) and concluded that the great 
majority of establishments effectively used generically approved labels 
and that the gradual implementation of generic label provisions under 
the 1995 final rule was effective. FSIS expanded generic approval again 
in 2013 (78 FR 66826, November 7, 2013) and, in 2016, conducted a 
limited assessment of generic labels under the modified system, which 
found a high level of compliance with the requirements.
    In June 2020, the USDA Office of Inspector General (OIG) concluded 
an audit of FSIS product labeling oversight (OIG audit #24601-0002-23, 
``Controls Over Meat, Poultry, and Egg Product Labels'').\5\ In 
response to the audit recommendations concerning FSIS oversight of 
generic labeling, the Agency agreed that it would continue to enhance 
its outreach efforts to ensure establishments are aware of applicable 
mandatory labeling features for generic labels. FSIS also agreed to 
update its internal policies to improve IPP label verification 
activities. FSIS took subsequent action to satisfy OIG's audit 
recommendations and, based on such action, the USDA Office of the Chief 
Financial Officer (OCFO) closed the audit on June 29, 2021.
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    \5\ OIG's audit report is available at: https://www.usda.gov/sites/default/files/audit-reports/24601-0002-23.pdf.
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    Since the 2013 rulemaking (78 FR 66826), FSIS has gained 
significant, additional experience evaluating labels required to be 
submitted and approved. From that experience, FSIS has observed through 
its prior label approval system that most labels in the categories 
discussed in this final rule are compliant and do not require changes. 
Therefore, the Agency concluded that the current label regulations 
continue to require industry to submit for approval a significant 
number of labels that could successfully be generically approved. 
Therefore, on September 14, 2020, FSIS published a proposed rule to 
amend the meat and poultry products inspection regulations to expand 
the circumstances under which labels of meat and poultry products would 
be deemed to be generically approved by the Agency (85 FR 56538). FSIS 
also proposed to cease evaluating generically approved labels submitted 
to FSIS for review (85 FR 56538, 56542). FSIS proposed these changes to 
its regulations to reduce the number of labels submitted for evaluation 
by FSIS and to lessen the paperwork burden on official establishments 
(85 FR 56538, 56541). As stated in the proposed rule, the reduction in 
staff time spent approving these labels will allow the Agency to better 
focus on other consumer protection and food safety activities, such as 
developing guidance materials, answering labeling policy questions, 
providing outreach to stakeholders, and ensuring IPP effectively verify 
that establishments meet labeling requirements (85 FR 56538, 56541). 
FSIS is now finalizing the proposed rule with minor changes to clarify 
label approval requirements with respect to voluntarily inspected 
poultry.

II. Final Rule

    This final rule is consistent with the proposed rule. First, the 
final rule will extend generic label approval to products only intended 
for export that deviate from domestic labeling requirements, by 
removing 9 CFR 412.1(c)(2). As explained in the proposed rule, FSIS 
maintains an Export Library that lists requirements for exported 
products that foreign authorities have officially communicated to FSIS, 
including

[[Page 2800]]

labeling requirements.\6\ At times, foreign country labeling 
requirements conflict with domestic requirements. FSIS regulations (9 
CFR 317.7 and 381.128) permit export product labels to deviate from 
FSIS' domestic labeling requirements in order to comply with foreign 
country requirements or to be marketed more easily in a foreign 
country.\7\ FSIS IPP verify whether product for export meets 
requirements listed in the Export Library, including labeling, when 
certifying products for export. Verification of foreign requirements is 
ultimately determined by each foreign country's competent authority.
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    \6\ The Export Library is available at: https://www.fsis.usda.gov/wps/portal/fsis/topics/international-affairs/exporting-products/export-library-requirements-by-country.
    \7\ Although there is no specific equivalent regulation for egg 
products, FSIS follows the same policy because such products, 
intended exclusively for export, must comply with foreign countries' 
requirements and are therefore not considered misbranded.
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    Second, the final rule will revise the types of ``special 
statements and claims'' requiring label submission by providing for 
generic approval of three additional types of claims. As explained in 
the proposed rule, FSIS has, through its prior label approval system, 
routinely evaluated these types of claims for several years. From that 
experience, FSIS has observed that errors, omissions, and 
misrepresentations are rare on these types of labels. FSIS has, 
therefore, decided to expand generic approval to such claims. As with 
all generically approved labels, IPP will continue to conduct routine 
verification tasks in establishments to verify ongoing compliance with 
labeling requirements. FSIS is amending 9 CFR 412.1(e) and 412.2(b) to 
make these changes.
    Under this final rule, the following types of claims will be 
generically approved:
    a. ``Organic'' claims that appear in a product label's ingredients 
statement, which designate an ingredient as certified ``organic'' under 
the Agricultural Marketing Service's (AMS's) National Organic Program. 
The ingredients statement on these product labels designates specific 
ingredients as ``organic'' (e.g., ``organic garlic''). Under this rule, 
FSIS will no longer require the submission and evaluation of supporting 
documentation to verify that such ingredients are indeed certified as 
``organic'' by an AMS-recognized third-party certifier. However, FSIS 
will continue to require establishments to submit labels certifying a 
total product as organic to FSIS for evaluation.
    b. ``Geographic landmarks'' displayed on a product label, such as a 
foreign country's flag, monument, or map. For example, the following 
claims displayed on a product label will no longer require FSIS review 
prior to entering commerce: a Polish flag depicted on a Polish sausage 
product label, or an outline of the State of Nevada depicted on a 
product label for beef produced in Nevada.
    c. ``Negative'' claims made on product labels that identify the 
absence of certain ingredients or types of ingredients. For example, 
statements such as ``No MSG Added,'' ``Preservative Free,'' ``No 
Milk,'' ``No Pork,'' or ``Made Without Soy,'' on product labels that do 
not list these ingredients in the ingredients statement will no longer 
have to be evaluated by FSIS before use. However, FSIS evaluation of 
labels that bear negative claims relating to the raising of the animal 
from which the product is derived (e.g., ``no antibiotics 
administered'') or negative claims relating to the use of genetically 
modified ingredients will continue to be required.
    Third, the final rule will permit generic approval of the labels of 
products that receive voluntary FSIS inspection. FSIS provides several 
types of voluntary inspection services under the authority of the 
Agricultural Marketing Act (AMA) (7 U.S.C. 1621 et seq.), including 
inspection for: rabbits (9 CFR part 354), certain non-amenable species 
of livestock and poultry, such as elk, bison, and migratory waterfowl 
(9 CFR part 352, subpart A, and 9 CFR part 362); and products that 
contain meat or poultry but are not under FSIS jurisdiction, e.g., 
closed-faced sandwiches (9 CFR 350.3(c)and 362.2(a)). Before this final 
rule, labels for some products produced under these voluntary 
inspection programs were not covered under the Agency's generic 
approval regulations at 9 CFR part 412. This final rule will permit 
generic approval for them on the same basis as amenable meat, poultry, 
and egg products by amending the relevant regulations where needed to 
include references to 9 CFR part 412.\8\ For clarity, the final rule 
will also modify 9 CFR 352.1 to update the section heading and remove 
unnecessary language.
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    \8\ Under existing regulations, non-FSIS-jurisdiction products 
that contain meat or poultry (9 CFR 350.3(c)) and products 
containing non-amenable species of poultry (9 CFR part 362), which 
are voluntarily inspected, are already subject to the label approval 
provisions of 9 CFR part 412. Nonetheless, this final rule adds 
additional regulatory language to 9 CFR part 362 to further clarify 
label approval requirements with respect to voluntarily inspected 
poultry.
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    Finally, under the final rule, FSIS will no longer evaluate 
generically approved labels submitted voluntarily for FSIS review. Over 
the years, producers have become more familiar with FSIS' generic 
labeling requirements, and FSIS has provided additional guidance to 
assist them in designing compliant labels. Because voluntarily 
submitted labels receive a lower review priority than other labels, 
industry can receive more timely labeling assistance by utilizing 
Agency resources or contacting FSIS for help. Therefore, FSIS' 
evaluation of otherwise generic labels no longer represents an 
efficient use of Agency resources.
    FSIS will, however, continue to provide industry with generic 
labeling resources and assistance to help them comply with 
requirements. For example, FSIS has revised and reissued the FSIS 
Guideline for Label Approval \9\ to provide updated information on the 
types of labels that must be submitted to FSIS for approval consistent 
with this final rule. FSIS will also continue to assist industry with 
generic labeling issues via phone, askFSIS, and the Small Plant Help 
Desk.
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    \9\ The latest revision of the FSIS Guideline for Label Approval 
is available at: https://www.fsis.usda.gov/inspection/compliance-guidance.
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II. Summary of Comments and Responses

    FSIS received 33 comments on the proposed rule from individuals, 
trade associations, private businesses, non-profit organizations, a 
consultant, a software company, the European Union (EU), and OIG. 
Fourteen commenters supported the proposed rule; though, some 
commenters requested revisions to or clarification on specific 
provisions of the rule. Most of these commenters stated that they 
supported the proposed rule because it will streamline the prior label 
approval system, reduce the label approval backlog, result in a cost 
savings for industry and government, and allow FSIS to utilize its 
resources more effectively.
    Four commenters opposed the proposed rule, generally citing 
concerns over reduced oversight of meat, poultry, and egg product 
labeling claims. Twelve comments expressed concerns regarding specific 
provisions or language in the proposed rule but did not otherwise 
express opposition or support for the remainder of the rule. The 
remaining comments were outside the scope of the rule. A summary of the 
relevant issues raised by commenters and the Agency's responses 
follows.

[[Page 2801]]

A. Industry Compliance and Agency Oversight

    Comment: OIG questioned FSIS' conclusion that its previous generic 
labeling assessments found a high level of industry compliance with 
requirements and its assertion in the proposed rule (85 FR 56538, 
56543) that OIG's audit of FSIS' product labeling oversight (OIG audit 
#24601-0002-23) does not affect the proposed expansion of generic 
labeling eligibility. Unlike FSIS, OIG does not believe that the 
assessments or the audit found a high level of industry compliance with 
generic labeling requirements. As part of its audit, OIG reviewed 878 
generic labels that industry voluntarily submitted to FSIS for review 
and found that FSIS requested changes to 74 percent of these labels. 
OIG also noted that three establishments OIG visited during its audit 
did not make required modifications to their generic labeling records. 
For these reasons, OIG recommended that FSIS consider performing a 
statistically valid assessment, before publishing this final rule, to 
ensure establishments have achieved a high level of compliance with 
generic label requirements. OIG also asked FSIS to consider ensuring 
that IPP select generic labels when performing General Labeling Tasks.
    Response: As discussed in the proposed rule (85 FR 56538, 56541), 
FSIS completed an assessment of its generic labeling system in 1998 (76 
FR 75809, December 5, 2011). Of the 1,513 labels that FSIS reviewed 
during its assessment, 1,434 (approximately 95 percent) were either in 
complete compliance or had only minor labeling errors (e.g., 
insufficient spacing around the declaration of net weight or an error 
in the name of the manufacturer, packer, or distributor) that were not 
of public health or economic significance (76 FR 75813). As discussed 
in the proposed rule (85 FR 56538, 56541), FSIS also conducted a 
limited assessment in 2016, with similar results. Thus, FSIS maintains 
its view that its previous assessments found a high level of compliance 
from the labels reviewed.
    In June 2020, OIG concluded an audit of FSIS' oversight of 
generically approved and sketch approved labeling.\10\ In response to 
the official draft of the audit, FSIS expressed concerns that the audit 
was flawed in several areas, and that OIG misinterpreted specific 
labeling regulations and how they are applied to the labeling review 
process. FSIS also expressed concerns that OIG evaluated the label 
approval program on a rigid set of standards that did not accurately 
reflect FSIS regulations or consider FSIS' history and expertise in 
implementing the regulations and review of labels. OIG addressed some, 
but not all, of these concerns in its final audit report. Despite FSIS' 
misgivings about the audit, the Agency generally agreed with OIG's 
recommendations, and OIG accepted FSIS' decisions on all its 
recommendations.
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    \10\ Audit Report 24601-0002-23 available at https://www.usda.gov/sites/default/files/audit-reports/24601-0002-23.pdf.
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    FSIS took subsequent action to satisfy OIG's recommendations and, 
based on such action, OCFO closed the audit on June 29, 2021. For 
example, on June 7, 2021, the Agency revised FSIS Directive 7221.1, 
Prior Labeling Approval,\11\ to clarify that IPP are to routinely 
select generically approved labels when performing General Labeling 
Tasks.\12\ FSIS also documented internal Standard Operating Procedures 
to assist LPDS analysts with the label evaluation process, including 
formalizing a Quality Control program to randomly review label 
adjudications.
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    \11\ FSIS Directive 7221.1 is available at: https://www.fsis.usda.gov/policy/fsis-directives/7221.1.
    \12\ The General Labeling Task is a set of surveillance 
procedures that IPP use to verify the ongoing compliance of labels, 
including generic labels, at establishments. FSIS Directive 7221.1, 
Prior Labeling Approval, provides instructions to IPP for conducting 
the General Labeling task.
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    FSIS also took action to address OIG's finding that three 
establishments it visited during its audit did not make required 
modifications to their labeling records. Although this finding was only 
based on a review of four labels, FSIS nonetheless published a 
Constituent Update to remind all establishments that FSIS label 
approval, including approval of voluntarily submitted generic labels, 
is contingent on the establishment making the revisions noted by 
FSIS.\13\ FSIS also recently updated FSIS Directive 7221.1 to clarify 
that, as part of the General Labeling Task, IPP are to routinely verify 
that establishments make required modifications to their labels.
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    \13\ FSIS Constituent Update: Tips for Faster Label Approval 
Process. August 9, 2019, available at: https://www.fsis.usda.gov/news-events/news-press-releases/constituent-update-august-9-2019-0.
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    FSIS acknowledges OIG's finding that FSIS requested changes to 74 
percent of the generic labels voluntarily submitted to the Agency by 
industry, which OIG reviewed during its audit. For a number of reasons, 
however, this finding does not accurately reflect the overall 
compliance of generically approved labels. First, industry typically 
submits generically approved labels to FSIS to resolve questions about 
some aspect of the label's compliance. Thus, the labels OIG audited 
were, by their very nature, more likely to have minor deficiencies than 
generically approved labels not voluntarily submitted to FSIS. Second, 
nearly all the deficiencies identified were very minor and did not 
require label revocation. Moreover, none of the identified deficiencies 
created a health or safety concern or provided the establishment with 
an economic advantage.
    Based on the above, FSIS maintains its view that generic labels 
typically comply with labeling regulations. The great majority of 
errors that do occur are minor, do not require label revocation, and 
are not of public health or economic significance. As such, FSIS did 
not conduct another assessment prior to publication of this final rule. 
However, as discussed, FSIS has already taken action to address OIG's 
recommendations and successfully close the audit, such as reissuing 
Directive 7221.1 to clarify that IPP are to include review of generic 
labels as part of the General Labeling Task and verify that 
establishments have made required modifications, if any, to such 
labels. In addition, FSIS will continue to train and support IPP on 
this issue via webinars, askFSIS, and other outreach including 
participating in IPP training conducted by the FSIS Center for Learning 
(CFL).
    Comment: An individual commenter argued that the sample size of the 
2016 assessment was not adequate to effectively gauge industry 
compliance with generic labeling requirements. The commenter also noted 
that FSIS did not provide a link to the results of that assessment in 
the proposed rule. The commenter recommended that, moving forward, FSIS 
perform additional generic labeling assessments.
    Response: As discussed in the proposed rule, the 2016 assessment 
was a limited assessment conducted to address concerns about the 
effectiveness of generic labeling and establish protocols for a 
potential future national assessment (85 FR 56538, 56541). Labeling 
policy experts reviewed 270 labels for compliance with generic labeling 
requirements.\14\ These 270 labels reflect a representative sample from 
the five Federally regulated establishments subject to the assessment. 
Thus, the sample size was adequate to gauge their compliance with 
generic labeling requirements.
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    \14\ Methodology available at: https://www.fsis.usda.gov/guidelines/2016-0019.
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    FSIS did not produce a report outlining the comprehensive results 
of the assessment. Instead, in line with the assessment's methodology, 
FSIS drafted

[[Page 2802]]

an assessment summary letter for each individual establishment. FSIS 
also discussed the overall results of the assessment in the proposed 
rule, noting that the assessment found a high level of compliance with 
the generic labeling requirements and identified only three labels with 
deficiencies necessitating label revocation (85 FR 56538, 56541). None 
of these deficiencies involved food safety.
    FSIS may conduct future assessments, as needed, and as Agency time 
and resources permit to gauge ongoing industry compliance with generic 
labeling, including the provisions in this final rule. However, the 
Agency determined that an assessment was not necessary prior to 
publication of this final rule, given its previous assessments have 
shown a high level of industry compliance with generic labeling 
requirements.

B. Cost of Label Review

    Comment: One individual stated that the proposed rule is not 
necessary because the costs associated with FSIS' label review process 
are already relatively low.
    Response: FSIS disagrees. The cost of label submissions and 
evaluations vary and is dependent on the complexity of the individual 
label. FSIS estimates that the total industry and Agency net cost 
savings under this rule from the reduction in FSIS label submissions to 
be $5,615,403 discounted at the 7 percent discount rate over a 10-year 
period, present value. FSIS is focused on making the label approval 
process more efficient while ensuring food safety and preventing 
misbranded products.

C. Increase in Deficient Labels

    Comment: Several individuals expressed concerns that expanding 
generic approval to other categories of labels will substantially 
increase the number of deficient labels in commerce. Some individuals 
also suggested that expanding generic labeling will encourage 
establishments to intentionally abuse the labeling system. In addition, 
some individuals stated that periodic IPP verification of generic 
labels is insufficient to identify and prevent misbranded labels before 
they cause harm to consumers.
    Response: FSIS disagrees. First, FSIS' experience with generic 
label approval does not support the assertion that expanding generic 
approval will substantially increase the number of deficient labels in 
commerce. Generic labeling has been in place in some form since 1983. 
This final rule, like previous expansions of generic approval 
eligibility, will continue to require that establishments comply with 
FSIS' labeling regulations. Establishments have been required to 
include the following features on their product labels for many years: 
product name (9 CFR 317.2(c)(1) and (e), 381.117, and 590.411(c)(1)); 
inspection legend/establishment number (9 CFR 312.2(b), 317.2(c)(5) and 
(i), 381.96, 381.123, and 590.411(c)(5)); handling statement (9 CFR 
317.2(k), 381.125(a), and 590.410(a)(1)-(2)); net weight (9 CFR 
317.2(c)(4) and (h), 381.121, and 590.411(c)(4)); ingredients statement 
(9 CFR 317.2(c)(2) and (f), 381.118, and 590.411(c)(1)); signature line 
(9 CFR 317.2(c)(3) and (g), 381.122, and 590.411(c)(2)); nutrition 
facts panels (9 CFR part 317, subpart B; part 381, subpart Y; and 
590.411(e)); and safe-handling instructions (9 CFR 317.2(l) and 
381.125(b)). FSIS IPP will continue to verify that establishments' 
labels include these features and otherwise comply with labeling 
requirements. Moreover, as discussed above, FSIS has evaluated the 
compliance of generically approved labels after previous expansions of 
generic approval eligibility and found that they typically comply with 
labeling regulations. FSIS expects that the categories of labels added 
to generic approval by this rule will have a similarly high compliance 
rate, and any increase in the number of deficient labels entering 
commerce resulting from the expansion of generic label approval by this 
rule will be minimal.
    FSIS' experience with generic label approval also does not support 
the assertion that expanding generic label approval will encourage 
establishments to intentionally abuse the labeling system. Past 
incidents of establishments intentionally misusing generic label 
approval have been rare, and FSIS does not expect that to change with 
this rule. IPP routinely perform labeling verification activities in 
federally inspected establishments to identify and deter such activity. 
Moreover, the costs associated with noncompliance, such as the costs to 
replace deficient labels or the disruption of production, disincentive 
such behavior. In addition, if any such activity does occur, FSIS may 
take action to control misbranded products and take enforcement action 
under the FSIS Rules of Practice (9 CFR part 500).
    In addition, FSIS disagrees with the assertion that IPP 
verification of generic labels is insufficient to identify and prevent 
misbranded labels before they cause harm to consumers. IPP have 
consistently demonstrated their ability to review generic labels and 
ensure a high level of compliance with labeling requirements. FSIS will 
revise and reissue instructions to IPP regarding the verification of 
generic labels as necessary. For instance, FSIS recently reissued FSIS 
Directive 7221.1 to provide IPP with updated instructions for 
conducting the General Labeling task in the Public Health Information 
System (PHIS) \15\ that are consistent with this final rule. As 
discussed, the Agency has also updated the FSIS Guideline for Label 
Approval to be consistent with this final rule. FSIS will also update 
and administer generic labeling training webinars for IPP, as 
necessary. Moreover, this rule is expected to reduce the number of 
labels submitted to FSIS, freeing up resources that will allow the 
Agency to better focus on providing labeling support to industry and 
IPP. FSIS will focus its time and resources on preventing more non-
compliances through new and improved labeling guidance, outreach, and 
other support services for its stakeholders, including via phone, 
askFSIS, and the Small Plant Help Desk. In addition, IPP will continue 
to verify generic labels for compliance on a routine basis and inform 
establishments of the need to correct any deficiencies they identify.
---------------------------------------------------------------------------

    \15\ PHIS is FSIS' dynamic, comprehensive data analytic system, 
which was launched as part of the Agency's effort to collect, 
consolidate and analyze data in order to improve public health.
---------------------------------------------------------------------------

D. Organic Claims

    Comment: A consulting firm and a trade association asked FSIS to 
expand generic approval to all ``organic'' labeling on a product, 
rather than limiting it to ``organic'' claims listed in the ingredients 
statement.
    Response: FSIS will not expand generic approval to all ``organic'' 
labeling at this time. There are additional requirements for labeling a 
total product as ``organic'' as opposed to just a particular 
ingredient. For example, approving an entire product as ``organic'' 
requires the review of supporting documentation on ``organic'' 
processing, including ``organic'' certificates. Such claims need to be 
reviewed by LPDS staff that have expertise in the types of supporting 
documentation needed to determine compliance. Such ``organic'' claims 
are, therefore, not easily verifiable by IPP. Thus, FSIS will continue 
to require prior approval for labels that display ``organic'' claims 
outside the ingredients statement, including those certifying a total 
product as ``organic.''
    Comment: Several individuals stated that the rule will weaken 
regulatory oversight of ``organic'' claims on meat,

[[Page 2803]]

poultry, and egg products. They also stated that allowing ``organic'' 
claims in the ingredients statement will mislead consumers into 
believing they are buying certified organic products.
    Response: The final rule will not weaken oversight of ``organic'' 
claims. FSIS regulations will continue to require that all ``organic'' 
claims be truthful and not misleading. LPDS analysts will continue to 
evaluate and approve ``organic'' claims displayed outside of the 
ingredients statement. IPP will verify the truthfulness of generically 
approved ``organic'' ingredient claims made in the ingredients 
statement. IPP verify, through record review and observation, that all 
ingredients used in the production of the product are present on the 
product formulation record and that all ingredients in the product 
formulation are declared in the ingredients statement on the product 
label by common or usual name in descending order of predominance. IPP 
also verify, through record review and observation, that the 
appropriate label is applied to the product. IPP directly observe that 
all ingredients used in a product formulation are appropriately 
declared on the final meat, poultry, or egg product labels. The AMS 
National Organic Program will also continue to provide oversight of 
organic claims.
    FSIS also disagrees that listing some ingredients as ``organic'' in 
the ingredients statement will mislead consumers. So long as they are 
truthful, the AMS National Organic Program regulations,\16\ which were 
first published in December 2000,\17\ permit ``organic'' claims to 
appear in the ingredient statements of non-certified products. FSIS did 
not propose to change those requirements.
---------------------------------------------------------------------------

    \16\ 7 CFR part 205.
    \17\ 65 FR 80548, December 21, 2000.
---------------------------------------------------------------------------

E. Negative Claims

    Comment: One producer asked FSIS to clarify whether ``gluten free'' 
claims qualify for generic approval under the rule. Another individual 
specifically opposed any action that would deregulate ``gluten free'' 
labeling.
    Response: The term ``gluten free'' is considered a negative claim 
and will receive generic approval under this final rule. However, the 
final rule will not deregulate ``gluten free'' labeling or change 
recordkeeping requirements. Such claims must still be truthful and not 
misleading in accordance with 9 CFR 317.8, 381.1, and 381.129. As 
discussed above, IPP will routinely verify the accuracy of generically 
approved labels. Specifically, for ``gluten free'' claims, IPP will 
verify that the product does not have any gluten containing ingredients 
and that there is adequate support for the claims in the labeling 
record.
    Comment: Some individuals stated that the rule will increase the 
likelihood that meat, poultry, and egg products in commerce contain 
undeclared allergens or other ingredients that consumers must avoid for 
health, ethical, or religious reasons. A few individuals also stated 
that generic approval of ``negative'' claims would encourage producers 
to publish fraudulent ingredients statements.
    Response: FSIS disagrees that the expansion of generic labeling 
will increase the likelihood that meat, poultry, or egg products will 
contain undeclared ingredients or allergens. The final rule will not 
change the requirement that ``negative'' claims must be truthful and 
not misleading. This final rule also will not change any requirements 
pertaining to product ingredient statements, which must continue to be 
truthful and list all ingredients in the product formula (9 CFR 317.2 
and 381.118).
    When LPDS evaluates labels during prior label review, they ensure 
that: the up to eight labeling features required by the meat, poultry, 
and egg products inspection regulations are present on the label; any 
claims are appropriately supported; and that any undefined claims, ad 
copy, or other information that may be false or misleading is not 
included on the label. As part of this process, LPDS compares written 
product formulations provided by establishments to the ingredients 
listed on their product labels. LPDS does not, however, physically 
inspect products as they are being made to ensure that only the 
ingredients listed on the label are used in final food products. IPP 
conduct reviews of this kind in the establishment, after the relevant 
label has been approved, whether generically or on a per-case basis by 
LPDS analysts.\18\ IPP review labels and compare them to actual product 
formulations to verify that the ingredients used in the production of 
the product are listed accurately on the label, that the label is not 
misleading, and that it is otherwise in compliance with all labeling 
requirements. IPP will also continue to perform general labeling tasks 
to verify the accuracy of ``negative'' claims.
---------------------------------------------------------------------------

    \18\ See FSIS Directive 7221.1, Prior Labeling Approval and FSIS 
Directive 7000.1, Verification of Non-Food Safety Consumer 
Protection Regulatory Requirements.
---------------------------------------------------------------------------

    IPP will also continue to verify that establishments accurately 
control and label the most common food allergens. In accordance with 
FSIS Directive 7230.1, Ongoing Verification of Product Formulation and 
Labeling Targeting the Eight Most Common (``BIG 8'') Food Allergens, 
IPP identify products that may contain allergens and routinely conduct 
allergen formulation verification tasks at the establishment. These 
tasks include a record review and direct observation component to 
ensure that all ingredients, including allergens, used in a product 
formulation are appropriately declared on the final meat, poultry, or 
egg product labels.
    Additionally, the final rule will not expand generic approval to 
all types of ``negative'' claims (e.g., ``no antibiotics 
administered''). FSIS is only expanding generic approval to 
``negative'' claims that identify the absence of certain ingredients or 
types of ingredients that are not listed in the ingredients statement 
and are easily verifiable by IPP. In FSIS' experience, errors or 
omissions for these types of claims are rare.
    Comment: A trade association stated that some ``negative'' claims, 
including ``preservative free,'' ``no artificial ingredients,'' and 
``no MSG added,'' are difficult for IPP to verify. Thus, the commenter 
asked that FSIS either provide updated guidance on these terms before 
publication of the final rule or modify the rule to exclude problematic 
claims from generic approval.
    Response: FSIS disagrees that ``negative'' ingredient claims are 
difficult for IPP to verify. IPP have access to product formulas for 
all products produced at Federal establishments, including those 
products with labeling bearing ``negative'' ingredient claims. The 
General Labeling Task and ``Big 8'' Formulation Verification Task in 
PHIS require IPP to compare the product formula with the ingredients 
listed on the label. In doing so, IPP will also verify that 
``negative'' ingredient claims are truthful and not misleading. In 
addition, FSIS has updated and reissued FSIS Directive 7221.1 and the 
FSIS Guideline for Label Approval to include additional guidance and 
instructions pertaining to ``negative'' claims. FSIS will also continue 
to answer questions and provide labeling support to IPP and industry 
through askFSIS. In addition, FSIS will perform more outreach and 
develop webinars about ``negative'' claims.
    Comment: Some non-profit organizations and individual commenters 
stated that FSIS should not

[[Page 2804]]

generically approve animal raising claims, including ``negative'' 
claims pertaining to the raising of the animal.
    Response: FSIS agrees. As discussed in the proposed rule, some 
claims, including animal raising claims, benefit from LPDS evaluation 
due to their complex nature and need for supporting documentation (85 
FR 56538, 56545). Therefore, this final rule does not revise any Agency 
policy or regulation concerning animal raising claims. As stated in the 
proposed rule (85 FR 56538, 56542), generic approval will not apply to 
``negative'' claims relating to the raising of the animal from which 
the product is derived, e.g., ``no antibiotics administered''.

F. Certified Claims

    Comment: One trade association requested that FSIS allow generic 
approval of any certified claims, e.g., ``certified non-GMO,'' that are 
preapproved by a third-party certifier. In the alternative, the 
commenter asked that FSIS develop specific standards for third-party 
certifiers, approve certifiers based on those standards, and allow the 
generic approval of certified claims where the certification was issued 
by an approved certifier. The commenter argued that IPP can easily 
verify such claims by reviewing the labeling record.
    Response: FSIS will not expand generic approval to certified 
claims, preapproved by a third-party certifier. FSIS will continue to 
review such claims, including certified animal raising claims, 
certified non-GMO claims, and other certifications issued by third 
party certifiers. Certified claims include the specific claim, 
identification of the certifying entity verifying the claim, and a web-
address for interested parties to obtain additional information on the 
standards applied that are being certified. Evaluation of these claims 
includes reviewing the claim, standards for the claim, as well as 
certificates for applicable products and establishments. The labeling 
record must include proof of current certification, accompanied by 
certification criteria, which must be evaluated by labeling experts. 
Therefore, certified claims are not easily verifiable by IPP.

G. Temporary Label Approval

    Comment: A few trade associations requested that FSIS expand 
generic approval to cover temporary label extensions for time sensitive 
claims (e.g., ``new,'' ``now,'' or ``improved'').
    Response: FSIS will not expand generic approval to extensions of 
the use of time sensitive label claims (e.g., ``new,'' ``now'' or 
``improved''). Temporary use of labels bearing a time sensitive claim 
beyond six months may not extend longer than 180 days, as stated in the 
Policy Book, unless FSIS LPDS grants an applicant's request for 
additional time (9 CFR 412.1(f)). To receive such an extension, an 
applicant must demonstrate that denial of the request would create 
undue economic hardship and that extending use of the label would not 
misrepresent the product, give the applicant an unfair competitive 
advantage, or present any health, safety, or dietary problems to the 
consumer (9 CFR 412.1(f)(1)). Furthermore, according to the Policy 
Book, applicants seeking an extension for time sensitive claims must 
demonstrate that production or distribution delays precluded the use of 
the approved labeling as scheduled or that labeling inventory needs for 
the 180-day period, were overestimated due to poor sales. The Policy 
Book also allows the extended use of time sensitive claims in 
situations where it is customary to distribute ``new'' products to 
various geographical regions if the processor can assure adequate 
controls over the segregation and distribution of the products. In 
addition, the Policy Book allows FSIS to approve the extended use of 
time sensitive claims in situations where the applicant is test 
marketing a product, but only if it can demonstrate that just 15 
percent or less of the total market is involved in the test marketing.
    Because applicants must demonstrate compliance with several 
detailed requirements in order to use time sensitive claims beyond 180 
days, such extensions are not good candidates for generic approval. IPP 
cannot easily verify compliance with such criteria and, thus, the 
Agency is concerned that allowing the extension of time sensitive 
claims on a generic basis would result in use of the labels well beyond 
the 180-day limit. FSIS LPDS will continue to evaluate all extension 
requests for the use of time-sensitive claims to ensure that applicants 
have demonstrated compliance with pertinent regulations and policy.
    Comment: One trade association requested that FSIS allow 
establishments to submit temporary and permanent label approval 
requests simultaneously. According to the commenter, companies 
sometimes need to submit labels for a temporary label approval to 
account for an alternate ingredient substitution that requires a change 
to the ingredients statement, after which the labels are updated, or 
the company reverts to the original ingredient. If the ingredient 
substitution is made permanent and the label bears a special statement 
or claim potentially affected by the ingredient change, the company 
must again submit the same label to obtain sketch approval for the 
special statement or claim affected by the ingredient substitution. The 
result is that the company must submit--and FSIS must review--the same 
label twice. The commenter states that FSIS should streamline this 
process by allowing establishments to submit a combined temporary and 
permanent approval request.
    Response: Extending temporary label approval of labeling with 
deficiencies to include a sketch approval of the corrected label is 
outside the scope of this rule. Temporary approval of the use of 
deficient labels requires that the label meets the criteria described 
in 9 CFR 412.1(f)(1)(i-iv), which is a different set of criteria than 
that used to evaluate the corrected label.

H. Voluntary Submissions

    Comments: Several commenters, including a consulting firm and a few 
trade associations, stated that FSIS should continue to evaluate 
generically approved labels voluntarily submitted to the Agency, 
because, according to the commenters, it is necessary to protect 
establishments from legal liability. These commenters also noted that 
the proposal to eliminate this review may lead to more non-compliant 
labels and product recalls.
    Response: FSIS' decision to no longer review generic labels 
voluntarily submitted to the Agency will not likely lead to more non-
compliant labels and product recalls. FSIS remains committed to helping 
its stakeholders navigate labeling requirements. However, evaluating 
generic labels submitted for voluntary review is an inefficient use of 
Agency resources as the labels may be applied to products entering 
commerce without formal FSIS approval, provided they meet the 
conditions in 9 CFR 412.2. Moreover, industry can receive more timely 
assistance by utilizing Agency resources or contacting FSIS, given that 
voluntarily submitted labels receive a lower review priority than other 
labels. Thus, rather than review generically approved labels, FSIS will 
focus its time and resources on preventing more non-compliances through 
new and improved labeling guidance, outreach, and other support 
services for its stakeholders, including via phone, askFSIS, and the 
Small Plant Help Desk. In addition, IPP will continue to verify generic 
labels for compliance on a routine basis and inform establishments of 
the need to correct any deficiencies they identify.
    In addition, FSIS review of generic labels was never intended to 
protect

[[Page 2805]]

industry from legal liability. Ultimately, establishments bear full 
legal responsibility for ensuring that their final product labels are 
truthful, accurate, and otherwise in compliance with all applicable 
regulations.
    Comment: Some commenters, including a few trade associations, 
stated that FSIS' review of generically approved labels is sometimes 
necessary to help industry and IPP resolve labeling issues. The 
commenters asked FSIS to clarify whether it will continue to assist 
industry and IPP with generic labeling issues by other means. If 
voluntary review is eliminated, the commenters requested that FSIS 
develop additional generic labeling guidance and resources for industry 
and IPP. One trade association also asked FSIS to establish a help desk 
for rapid answers to generic labeling questions.
    Response: Given voluntarily submitted labels are not prioritized 
for review, submission of such labels is not an efficient means to 
resolve labeling questions or other issues for IPP or industry. It is 
more efficient for industry and IPP to resolve such issues by 
referencing Agency resources, such as published labeling guidance and 
webinars, or by contacting FSIS. FSIS will continue to provide IPP and 
industry with generic labeling assistance and timely answers to generic 
labeling questions via phone or askFSIS. Thus, there is no need for 
FSIS to create a new help desk for answering questions or resolving 
issues. Moreover, a benefit of the final rule is that staff hours that 
were previously spent adjudicating generic labels, will be redirected 
toward other Agency priority initiatives that better support IPP and 
industry through, amongst other things, the development of new and 
improved training for inspectors, updated instructions for IPP, 
outreach, and guidance on labeling, including generic labeling.
    Comment: Some trade associations and individual commenters stated 
that the proposal to eliminate review of labels that can be generically 
approved will hurt new or small producers who do not have the expertise 
or resources to navigate complex labeling requirements. In addition, 
one trade association stated the Agency must continue the practice of 
reviewing generic labeling to fulfill its mission under the Small 
Business Regulatory Enforcement Fairness Act (SBREFA).
    Response: FSIS disagrees with these comments. Although FSIS will no 
longer review generic labels, the Agency will continue to be responsive 
to small business inquiries about compliance with the Agency's 
regulations and otherwise fulfill its obligations under SBREFA. FSIS 
will continue to answer inquiries by new or small producers seeking 
information and advice on compliance with Agency statutes and 
regulations and the interpretation and application of law to specific 
sets of facts supplied by the producers. As discussed above, FSIS will 
continue to provide many resources to help industry, including new and 
small producers, comply with generic labeling requirements. For 
example, such producers can directly contact LPDS, whose staff members 
are readily available to provide detailed answers to their generic 
labeling questions via phone or askFSIS. Small producers can also 
utilize FSIS' Small Plant Help Desk to find answers to common questions 
from small and very small plant owners and operators across the country 
or submit a question to FSIS subject matter experts. In addition, new 
and small producers can easily access FSIS' comprehensive labeling 
guidance, which is readily available on its website.\19\ Moreover, FSIS 
plans to develop additional generic labeling materials, training, 
webinars, and other support services to assist new or small producers. 
Thus, new or small producers should not need to hire experts or 
additional staff to comply with FSIS' labeling requirements.
---------------------------------------------------------------------------

    \19\ Website available at: https://www.fsis.usda.gov/inspection/compliance-guidance/labeling.
---------------------------------------------------------------------------

    Comment: One trade association stated that FSIS has a legal duty to 
continue reviewing any label submitted to the Agency, including 
generically approved labels.
    Response: FSIS disagrees. The Acts require that the labels be 
``approved'' by the Secretary (21 U.S.C. 457(c), 607(d), and 1036(b)); 
however, they do not require that the approval system be centralized or 
decentralized. They also do not prescribe any particular type of system 
for the granting of label approvals. Therefore, the Acts permit the 
Agency to classify certain types of labels and labeling features as 
eligible for ``generic'' approval.
    Comment: One individual asked FSIS to clarify whether it conducted 
a cost-benefit analysis of its decision to stop reviewing voluntarily 
submitted labels.
    Response: The cost-benefit analysis that FSIS published in the 
proposed rule (85 FR 56538, 56546) and the updated analysis in the 
``Alternative Regulatory Approaches'' section of this final rule 
considered the alternative of having LPDS continue to evaluate labels 
that would otherwise be generically approved. FSIS rejected this 
alternative because, among other things, these labels are reviewed at a 
slower pace and industry could more quickly get FSIS assistance on 
these types of labels via phone, askFSIS, the Small Plant Help Desk, or 
other Agency resources. Additional information on the analysis of this 
alternative is found below under the heading ``Alternative 2--The Final 
Rule, Except Industry Would Still Have the Option to Have LPDS Evaluate 
Labels that Would Otherwise be Generically Approved.''

I. Geographic Landmark Claims

    Comment: Some trade associations, individual commenters, and the EU 
opposed generic approval of geographic landmark claims. They are 
concerned that the rule will eliminate regulatory oversight for such 
claims, increase the prevalence of misbranded products, and allow 
establishments to mislead consumers regarding the origin of their 
products by, for example, using foreign flags on domestic product 
labels. These commenters also stated that prior label approval of 
geographic landmark claims is necessary to preempt violations of 
international agreements.
    Response: FSIS disagrees with these comments. This final rule does 
not change current regulations pertaining to the use of geographic 
landmarks, such as foreign flags, on product labels or the 
recordkeeping requirements to support such claims. The Acts require all 
labeling to be truthful and not misleading (21 U.S.C. 601(n)(1), 
453(h)(1), and 1036(b)). Moreover, geographic landmark claims must 
continue to specifically comply with 9 CFR 317.8(b)(1) and 
381.129(b)(2). These regulations permit, under certain conditions, the 
display of foreign flags on domestic products. As discussed in the 
proposed rule, IPP will routinely conduct verification and enforcement 
activities to verify that geographic landmark claims comply with all 
requirements (85 FR 56538, 56543).
    FSIS will also continue to conduct export certification activities 
for FSIS-regulated products intended for export to foreign countries. 
During this process, IPP verify that such products meet country-
specific requirements, including labeling requirements, that have been 
officially communicated to FSIS by the importing country. Thus, the 
Agency does not expect any issues with regards to obligations it may 
have to its international trade partners.
    Comment: A trade association and a non-profit organization stated 
that allowing generic approval of geographic landmark claims may 
weaken, delay, or otherwise conflict with future ``Product of USA'' 
rulemaking. Thus, they asked that FSIS delay any geographic landmark or 
country of origin specific

[[Page 2806]]

label rule changes until after such rulemaking is complete. In 
addition, the comments stated that this final rule may weaken the 
oversight and integrity of ``Product of USA'' labels and similar 
claims, such as ``local'' or ``regional.'' They therefore asked that 
these geographic landmark labels continue to go through the prior label 
review process.
    Response: This final rule will not conflict or interfere with any 
future ``Product of USA'' rulemaking. The rule simply modifies the 
label approval process to allow for generic approval of graphical 
representations of geographic landmarks displayed on a product label, 
such as a foreign country's flag, monument, or map. It does not modify 
the provisions of 9 CFR 317.8 and 381.129, which regulate the use of 
geographic claims to prevent false or misleading labeling. It also does 
not modify the label approval process for written claims related to 
geographical significance or those that make a country of origin 
statement on the label of any meat or poultry product ``covered 
commodity.'' \20\ Such claims are already eligible for generic 
approval.\21\ It likewise does not affect the current labeling 
requirements or the label approval process for similar types of written 
statements, such as ``local'' or ``regional.''
---------------------------------------------------------------------------

    \20\ See 9 CFR 317.8(b)(40) and 381.129(f).
    \21\ See 9 CFR 412.2(b).
---------------------------------------------------------------------------

    The final rule will also not weaken regulatory oversight of labels 
that display geographic landmarks. Although geographic landmark claims 
will now be generically approved, the rule does not change any labeling 
requirements for such labels. The use of geographic landmarks must be 
truthful and not misleading. Moreover, IPP will routinely verify the 
accuracy of such labels.

J. Front-of-Package Nutrition Statements

    Comment: A trade association requested that FSIS expand generic 
approval to include front-of-package (FOP) statements that repeat 
information from the nutrition facts panel.
    Response: FSIS will not expand generic approval to include FOP 
statements that repeat information from the nutrition facts panel. FSIS 
considers certain FOP labeling statements, such as those highlighting 
select nutrients from the nutrition facts panel placed on the principal 
display panel, to be nutrient content claims. The requirements for 
defined nutrient content claims are listed in the regulations. However, 
unlike traditional nutrient content claims which are defined in FSIS 
regulations and are eligible for generic approval, such as ``low fat,'' 
there are no guidelines for the multiple types of FOP labeling 
statements on product labels. Therefore, FSIS needs to continue to 
require prior evaluation by the Agency to ensure these statements are 
truthful and not misleading.

K. Miscellaneous Comments

    Comment: A non-profit organization requested that FSIS modify the 
final rule to state that illustrations and depictions of farms, animals 
grazing, and animals' living environments are animal raising claims 
and, as such, are not eligible for generic approval. A few non-profit 
organizations also asked FSIS to adopt uniform standards for common 
animal raising claims and require third-party verification of all such 
claims, whether made pictorially or textually.
    Response: The purpose of this final rule is to expand eligibility 
for generic approval to specific categories of labeling. The final rule 
will not, and is not intended to, exclude certain types of labeling 
from eligibility or to establish any new regulations or policies 
regarding animal raising claims.
    Comment: One trade association asked FSIS to engage with 
stakeholders before it updates its labeling guidance to assure the 
updated guidance meets the needs of end users. The commenter stated 
that updating guidance without industry input, especially when 
substantive changes are being made to the guidance, can cause confusion 
and, in the case of labeling, delay bringing products to market.
    Response: Consistent with its current practices for developing all 
guidance, FSIS is committed to a public process for updating or 
publishing new labeling guidance. The availability of all FSIS guidance 
is announced in the Federal Register or elsewhere and made available 
for public comment. FSIS considers all input received from its 
stakeholders and makes changes, as appropriate, to any guidance 
documents.
    Comment: One individual and a software company stated that FSIS 
should use existing software to automatically review labels. According 
to the commenters, this would reduce the time spent by FSIS reviewing 
labels and allow the Agency to concentrate on other priorities. The 
software company also proposed that FSIS adopt a public-private label 
review partnership much like AMS uses for organic certification.
    Response: These comments are outside the scope of this rulemaking, 
as they do not pertain to the Agency's proposed expansion of generic 
labeling. Regardless, FSIS is not convinced that existing software can 
adequately review labels for compliance with FSIS regulations and 
policies. FSIS does, however, use an electronic label system to allow 
for easier label submission. Using the Label Submission and Approval 
System \22\ (LSAS), establishments can submit label applications, 
supporting materials, and appeals to FSIS via the internet. While the 
system will not check labels automatically for errors, it will scan 
them for some common mistakes in the label submission process, 
including illegibility, missing information on the transmittal form, 
and missing supporting documentation. The system also includes a 
feature that helps submitters determine whether a label can be 
generically approved, or if it must be submitted to FSIS for prior 
approval.
---------------------------------------------------------------------------

    \22\ FSIS' Label Submission and Approval System (LSAS) is a web-
based software application that integrates and implements an 
electronic label application process for establishments to submit 
label applications to FSIS.
---------------------------------------------------------------------------

    Comment: An individual recommended that FSIS take steps to improve 
its generic labeling surveillance and enforcement program.
    Response: IPP have consistently demonstrated their ability to 
review generic labels and ensure a high level of compliance with 
labeling requirements. Moreover, FSIS has already taken steps to 
improve its verification system by reissuing FSIS Directive 7221.1 to 
clarify that, as part of the General Labeling Task, IPP are to 
routinely review generic labels and verify that establishments have 
made required modifications to such labels. FSIS has also updated 
Directive 7221.1 to be consistent with this final rule. In addition, 
FSIS will continue to train and support IPP on generic labeling via 
webinars, askFSIS, and other outreach, including having LPDS 
participate in IPP training conducted by CFL. This final rule promotes 
the effective use of Agency resources and will allow FSIS to devote 
more time to better supporting IPP through the development of new and 
improved training and guidance on, amongst other things, the 
surveillance, enforcement, and verification activities related to 
generic labeling.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 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

[[Page 2807]]

effects, distributive impacts, and equity). E.O. 13563 emphasizes the 
importance of quantifying both costs and benefits, of reducing costs, 
of harmonizing rules, and of promoting flexibility. This final rule has 
been designated by the Office of Information and Regulatory Affairs a 
``significant'' regulatory action under section 3(f) of E.O. 12866. 
Accordingly, the rule has been reviewed by the Office of Management and 
Budget under E.O. 12866.

Economic Impact Analysis

    FSIS has updated the benefits estimates in this final regulatory 
impact analysis as compared to the preliminary regulatory impact 
analysis published in the proposed rule. These changes include: 
updating wage rates to 2021 dollars for food scientists and 
technologists; updating wage rates to 2021 dollars for labeling 
analysts in LPDS; and updating the number of labeling analysts in LPDS 
during fiscal year 2021.

Need for the Rule

    The final rule will expand the types of meat, poultry and egg 
product labels that are generically approved by FSIS. Therefore, this 
rule will reduce the number of labels evaluated by FSIS and will reduce 
the costs to industry. The labels submitted for FSIS evaluation are 
becoming more complex and more time-consuming for industry to prepare 
and for FSIS to evaluate. The final rule will improve the efficiency of 
the label approval system by expanding generic labeling and making the 
system more convenient and cost efficient for the industry. This final 
rule also will enhance market efficiency by promoting a faster 
introduction of new products into the marketplace to meet consumer 
demand.

Baseline

    Based on FSIS' LSAS data, FSIS evaluated 15,459 unique labels 
during the 2019 fiscal year (FY). Of these, 5,229 (approximately 34 
percent) would have been generically approved if this final rule was in 
place in 2019. This amount (5,229) includes 632 labels currently 
eligible for generic approval, which firms voluntarily submitted for 
FSIS review. Many of the 15,459 labels were evaluated by FSIS more than 
once because they were returned to the producer to make corrections and 
then resubmitted for FSIS evaluation. FSIS has observed through its 
prior label approval system that corrections are rare on the types of 
claims that can now be generically approved under this final rule. In 
FY 2019, there were 26,158 label adjudications, which includes the 
total number of evaluations and reevaluations of labels reviewed. See 
Table 2 below for additional details.

                           Table 2--Label Evaluations and Adjudications, FY 2016-2019
----------------------------------------------------------------------------------------------------------------
                         FSIS labels                              2016         2017         2018         2019
----------------------------------------------------------------------------------------------------------------
Labels FSIS Would Not have Evaluated Under the Final Rule...        8,534        5,812        6,025        5,229
                                                             ---------------------------------------------------
    Total Labels FSIS Evaluated *...........................       22,846       17,958       17,635       15,459
                                                             ---------------------------------------------------
    Total Label Adjudications **............................       30,857       25,125       27,580       26,158
----------------------------------------------------------------------------------------------------------------
* This is the total number of labels FSIS evaluated, including the labels that would have been generically
  approved under the final rule.
** Label adjudications include some labels being reevaluated.

    FSIS expanded the types of labels and label changes that may be 
generically approved several times, starting in 1983 when the Agency 
evaluated 130,000 labels. In 1991, the number of labels evaluated 
peaked at 167,500. The 1995 final rule (60 FR 67444) amended the prior 
label approval process by expanding the types of labels and label 
changes that may be generically approved. From 2003-2010, the number of 
label adjudication per year averaged 57,457, with a minimum of 43,255 
in 2003 and a maximum of 66,061 in 2010. The 2013 final rule (78 FR 
66826, November 7, 2013) further expanded generic labeling, decreasing 
the number of label adjudications to 30,857 in FY 2016 (Table 2). FSIS 
also finalized a rule permitting generic approval for certain egg 
product labels in 2020 (85 FR 68640, October 29, 2020).
    The number of FSIS label adjudications decreased after the 
expansions of generically approved labels. However, the remaining label 
submissions after each expansion are more time-consuming for industry 
to prepare and for FSIS to evaluate. This is because the labels 
requiring submission after each expansion are generally more complex, 
with special statements or claims that require FSIS to evaluate a 
significant amount of supporting documentation.

Expected Costs of the Final Rule

    The final rule will not impose any new quantifiable costs on 
producers that submit labels for FSIS evaluation. Instead, the final 
rule will reduce the regulatory burden on producers that submit labels 
for evaluation and does not change the recordkeeping requirements. 
Producers already are using generically approved labels and maintaining 
all labeling records and thus are experienced in submitting labels for 
FSIS evaluation.

Expected Benefits of the Final Rule

Industry Impacts
    Industry will realize cost savings from the reduction in FSIS label 
submissions under the final rule. Industry is required to use FSIS Form 
7234-1 (OMB control number: 0583-0092) for the initial FSIS label 
submission. The estimated time to complete this form is 75 minutes per 
response, which includes reviewing instructions, searching existing 
data sources, gathering and maintaining the data needed 
(recordkeeping), and completing and reviewing the collection of 
information.\23\ FSIS estimates 15 minutes of the 75 minutes are 
dedicated to recordkeeping. The recordkeeping time is not included in 
the final rule's regulatory impact analysis because the recordkeeping 
requirements will not change under the final rule; that is, even if the 
establishment does not need to submit the label to FSIS, the 
establishment is still required to maintain records to support the 
label. Therefore, the average industry time to prepare one label 
submission for FSIS evaluation is 60 minutes (75 minutes minus 15 
minutes). FSIS also assumed food scientists and technologists perform 
this work at a mean hourly wage of $40.46.\24\ A benefits and

[[Page 2808]]

overhead factor of two \25\ was applied to estimate the total labor 
cost per label submission of $80.92.
---------------------------------------------------------------------------

    \23\ FSIS Form 7234-1 Application for Approval of Labels, 
Marking or Device. Last modified 11/16/2011. Available at: https://www.fsis.usda.gov/sites/default/files/2020-08/FSIS_7234-1_Approval_of_Labels_2.pdf.
    \24\ BLS Occupational Employment Statistics, Occupational 
Employment and Wages, May 2021. 19-1021 Food Scientists and 
Technologists. <https://www.bls.gov/news.release/pdf/ocwage.pdfoes/current/oes191012.htm#nat> Accessed on 9/16/2022. Last Modified 03/
31/2022.
    \25\ To be consistent with analyses done by the Department of 
Health and Human Services, this analysis accounts for fringe 
benefits and overhead by multiplying wages by a factor of 2.
---------------------------------------------------------------------------

    To determine the annual reduction of label submissions, FSIS relied 
on the average number of labels that FSIS would not have evaluated 
under the final rule from 2016 to 2019, which was 6,400 labels, ((8,534 
+ 5,812 + 6,025 + 5,229)/4), Table 2. Accordingly, FSIS estimates a 
decrease of 64,000 label evaluations over 10 years under the final rule 
(6,400 * 10). As shown in Table 3, FSIS estimates that industry will 
realize a discounted cost savings of $3,637,429 (at a 7 percent 
discount rate) and $4,417,690 (at a 3 percent discount rate) by FSIS 
generically approving an additional 64,000 labels over a 10-year 
period. The cost savings is $517,888 when annualized at the 7 and 3 
percent discount rate, over 10 years. The primary estimate is over 10 
years, but for illustrative purposes, Table 3 shows the potential cost 
savings at the 7 and 3 percent discount rate over 20 years.

                Table 3--Estimated Industry Cost Savings
                             [2021 Dollars]
------------------------------------------------------------------------
                                         Present value    Present value
   Total industry cost savings from     cost savings at  cost savings at
reduced need for FSIS label evaluation         7%               3%
------------------------------------------------------------------------
Total over 10 years...................       $3,637,429       $4,417,690
Annualized total over 10 years........          517,888          517,888
Total over 20 years...................        5,486,513        7,704,866
Annualized total over 20 years........          517,888          517,888
------------------------------------------------------------------------

Agency Impacts
    During FY 2021, FSIS employed 15 labeling analysts in LPDS with an 
average hourly salary of $72.21 (($53.00 * 36.25%) + $53.00 = $72.21 
for a GS-13 step 3,\26\ with an adjusted benefits factor of 36.25 
percent).\27\ Prior to this final rule, on average, LPDS analysts 
evaluated labels four hours per day, five days a week, at a cost of 
$21,663 per week. Under the final rule, LPDS analysts will evaluate 
labels for three hours per day, five days a week, at a cost of $16,247 
per week, because of the reduction in labels submitted to FSIS.
---------------------------------------------------------------------------

    \26\ Salary Table 2021-DCB for the locality pay area of 
Washington-Baltimore-Arlington, DC-MD-VA-WV-PA. Effective January 
2021. Available at: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2021/DCB_h.pdf.
    \27\ Nussle, Jim. (2008). M-08-13: MEMORANDUM FOR THE HEADS OF 
EXECUTIVE DEPARTMENTS AND AGENCIES. Executive Office of the 
President. Available at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2008/m08-13.pdf.
---------------------------------------------------------------------------

    Under the final rule, the Agency will realize a discounted cost 
savings of $1,977,974 (at a 7 percent discount rate) and $2,402,267 (at 
a 3 percent discount rate) for adjudicating fewer labels over a 10-year 
period. The cost savings is $281,619 when annualized at the 7 and 3 
percent discount rate over 10 years. The primary estimate is over 10 
years, but for illustrative purposes, Table 4 shows the potential cost 
savings at the 7 and 3 percent discount rate over 20 years. See Table 4 
for additional details.
    The Agency plans to utilize any resources made available by this 
final rule to work on other Agency priority initiatives, such as 
developing and updating policy and guidance documents, answering 
questions from askFSIS and other sources, and performing outreach 
activities. This change in Agency workload will result in more 
resources for the industry, which improves efficiencies for the Agency 
and industry alike.
    FSIS also anticipates an overall faster label review process from 
the decline in LPDS label evaluations. This will allow new labels to 
enter the market faster.

                 Table 4--Estimated Agency Cost Savings
                             [2021 Dollars]
------------------------------------------------------------------------
                                         Present value    Present value
Total agency cost savings from reduced  cost savings at  cost savings at
    need for FSIS label evaluation             7%               3%
------------------------------------------------------------------------
Total over 10 years...................       $1,977,974       $2,402,267
Annualized total over 10 years........          281,619          281,619
Total over 20 years...................        2,983,476        4,189,780
Annualized total over 20 years........          281,619          281,619
------------------------------------------------------------------------

Net Benefits
    This final rule will be net beneficial because it will reduce the 
costs to establishments, from submitting fewer labels for FSIS 
evaluation, while imposing no additional cost burden. The net benefit 
derived from the final rule is estimated to be $5,615,403 ($3,637,429 
in establishment savings plus $1,977,974 in Agency savings) discounted 
at the 7 percent discount rate over a 10-year period. When annualized 
at the 7 percent discount rate over 10 years, the net cost savings is 
estimated to be $799,507. For illustrative purposes, we also included 
the net cost savings over 20 years in Table 5. See Table 5 for details.

[[Page 2809]]



                     Table 5--Estimated Net Benefits
                             [2021 Dollars]
------------------------------------------------------------------------
Total agency and industry cost savings   Present value    Present value
   from reduced need for FSIS label     cost savings at  cost savings at
              evaluation                       7%               3%
------------------------------------------------------------------------
Total over 10 years...................       $5,615,403       $6,819,957
Annualized total over 10 years........          799,507          799,507
Total over 20 years...................        8,469,989       11,894,645
Annualized total over 20 years........          799,507          799,507
------------------------------------------------------------------------

Alternative Regulatory Approaches

    The Agency considered three alternatives to the final rule. The 
final rule was chosen as the least burdensome regulatory approach. The 
summary of the costs and benefits for the considered alternatives are 
outlined in Table 6 below.

                                   Table 6--Regulatory Alternatives Considered
----------------------------------------------------------------------------------------------------------------
             Alternative                       Benefits                  Costs                 Net benefit
----------------------------------------------------------------------------------------------------------------
(1) Take No Action...................  No Benefit.............  No potential industry    Net benefits are less
                                                                 or Agency cost savings.  than alternative 3.
(2) The Final Rule, Except Industry    Industry could benefit   Potential for            Net benefits are less
 Would Still Have the Option to Have    from additional FSIS     inefficient use of       than alternative 3.
 LPDS Evaluate Labels that Would        evaluation.              Agency resources.        Although industry
 Otherwise be Generically Approved.                              Industry would also      could marginally
                                                                 incur costs of           benefit from
                                                                 submitting the labels    additional FSIS
                                                                 and waiting for FSIS     evaluation, sufficient
                                                                 evaluation.              guidance is available
                                                                                          for labels that can be
                                                                                          generically approved.
                                                                                          Also, industry and the
                                                                                          Agency would incur
                                                                                          costs from submitting
                                                                                          and evaluating such
                                                                                          labels.
(3) The Final Rule...................  Potential industry cost  No quantifiable costs..  Net benefits are
                                        savings of $517,888                               $799,507 annualized at
                                        and Agency cost                                   the 7 percent discount
                                        savings of $281,619,                              rate over 10 years.
                                        annualized at the 7
                                        percent discount rate
                                        over 10 years.
(4) Allow All FSIS Labels to be        The Agency and industry  Costs include            Net benefits are less
 Generically Approved.                  would benefit from       potentially increasing   than alternative 3 as
                                        time savings by          the number of            the potential costs of
                                        eliminating FSIS label   misbranded products.     misbranded products
                                        evaluation.                                       from eliminating FSIS
                                                                                          label evaluation
                                                                                          outweighs the time
                                                                                          savings benefit.
----------------------------------------------------------------------------------------------------------------

Alternative 1--No Action (Baseline)

    FSIS considered keeping the current regulations and taking no 
action. Taking no action would mean that industry and the Agency would 
not experience costs savings from the reduction of labels submitted for 
FSIS evaluation under the final rule. Industry would therefore not 
realize the estimated reduction of 64,000 label submissions over 10 
years and would not experience an annualized cost savings of $517,888 
at the 7 percent discount rate over 10 years. The Agency would not 
experience time savings from the reduction of label evaluations. 
Therefore, the Agency rejects this alternative.

Alternative 2--The Final Rule, Except Industry Would Still Have the 
Option To Have LPDS Evaluate Labels That Would Otherwise Be Generically 
Approved

    FSIS considered an alternative of finalizing the same generically 
approved label categories except FSIS would continue to evaluate those 
labels that would otherwise be generically approved. Prior to the final 
rule, industry could submit labels that could be generically approved 
for voluntary FSIS evaluation, although this evaluation was not needed 
prior to entering the market. When industry submitted these types of 
labels for voluntary FSIS evaluation, they were reviewed with a lower 
priority than other labels, and thus took more time for FSIS to 
approve. Although industry may marginally benefit from the additional 
FSIS evaluation, the process is inefficient and raises unnecessary 
costs. Industry can more quickly get FSIS assistance on these types of 
labels through other guidance, such as askFSIS.
    In addition, FSIS would have to take the time to process and 
evaluate these labels, when reviewer time could be spent on higher 
priorities, such as policy related issues (e.g., updating priority 
labeling regulations or labeling guidance). Industry would also incur 
costs in preparing and submitting the labels for FSIS evaluation while 
they can get FSIS help through other outlets without incurring these 
expenses. For these reasons, FSIS rejects this alternative.

Alternative 3--The Final Rule

    The final rule yields cost savings for both the industry and the 
Agency. There is no additional cost burden from the final rule. The 
potential cost savings for industry is $517,888, annualized at the 7 
percent discount rate over 10 years. This covers the time industry 
saves from not preparing and submitting the labels for FSIS evaluation.
    The potential cost savings for FSIS is $281,619, annualized at the 
7 percent discount rate over 10 years. This covers the time FSIS saves 
from not evaluating the generically approved labels. Since there is no 
additional burden for this final rule, FSIS determined this to be the 
preferred alternative.

Alternative 4--All Labels Are Generically Approved

    FSIS also considered an alternative that would allow all labels to 
be generically approved, requiring no prior approval by FSIS. This 
alternative may increase the number of misbranded products going into 
commerce, as LPDS would no longer verify the information on complex 
labels. An increase in misbranded products that contain incorrect, 
false, or misleading information may result in a loss of consumer 
confidence in information on food labels. There is also cost associated 
with discarding and reprinting misbranded labels that the industry may

[[Page 2810]]

suffer. Therefore, FSIS believes the labels that will still require 
prior evaluation under the final rule, such as labels with animal 
raising, natural, or front of package nutrition labeling claims, 
benefit from LPDS evaluation due to the complex nature and need for 
supporting documentation of these claims.
    This alternative would yield time savings for industry from no 
longer preparing and submitting labels for FSIS evaluation. FSIS would 
also experience time savings from no longer evaluating these labels. 
However, the potential costs of misbranded products entering commerce, 
resulting from the elimination of all LPDS label evaluation, would 
outweigh the benefits of the time savings.

V. Regulatory Flexibility Act Assessment

    The FSIS Administrator certifies that, for the purposes of the 
Regulatory Flexibility Act (5 U.S.C. 601-602), this final rule will not 
have a significant economic impact on a substantial number of small 
entities in the United States. This determination was made because 
small producers will experience costs savings from the reduced number 
of label submissions for FSIS evaluation.
    Based on LSAS and PHIS data, FSIS estimates 92.3 percent (4,825/
5,229) of the label submissions in 2019, which would have been 
generically approved under the final rule, are from small or very small 
Hazard Analysis and Critical Control Point (HACCP) sized 
establishments. Under the HACCP size definitions, large establishments 
have 500 or more employees and small establishments have fewer than 500 
but more than 10 employees. Very small establishments have fewer than 
10 employees or annual sales of less than $2.5 million. Small and very 
small establishments, like large establishments, follow the same 
standards for generic and sketch approval of labels. Small and very 
small producers, therefore, will not be disadvantaged because the final 
rule will minimize the regulatory burden on all producers.
    Based on 2019 LSAS data, about 12 percent (627/5,229) of labels 
that would have been generically approved under the final rule, were 
submitted from 19 label consultant firms. These firms are very small, 
usually having one to four employees. Many of these firms provide a 
range of services, including label courier services, label consultation 
and regulatory compliance, or label design. This final rule may impact 
their label courier business. However, the impact on these firms is 
small as their other business, such as label consultations, will not be 
affected. Therefore, this final rule will not have a significant 
economic impact on the small label consultant firms.

VI. Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection or 
recordkeeping requirements have been submitted for approval to the 
Office of Management and Budget (OMB).
    FSIS is expanding the circumstances under which it will generically 
approve the labels of meat, poultry, and processed egg products. Under 
this final rule, more official and foreign establishments will be able 
to use the generic approval of product labels. As a result, fewer 
labels will need to be submitted and evaluated by FSIS. The relevant 
information collection, 0583-0092, Marking, Labeling, and Packaging, 
has a net reduction of 6,400 burden hours because of the increased use 
of generic labeling.

VII. USDA Non-Discrimination Statement

    In accordance with Federal civil rights law and USDA civil rights 
regulations and policies, USDA, its Mission Areas, agencies, staff 
offices, employees, and institutions participating in or administering 
USDA programs are prohibited from discriminating based on race, color, 
national origin, religion, sex, gender identity (including gender 
expression), sexual orientation, disability, age, marital status, 
family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Program information may be made available in languages other than 
English. Persons with disabilities who require alternative means of 
communication to obtain program information (e.g., Braille, large 
print, audiotape, American Sign Language) should contact the 
responsible Mission Area, agency, or staff office; the USDA TARGET 
Center at (202) 720-2600 (voice and TTY); or the Federal Relay Service 
at (800) 877-8339.
    To file a program discrimination complaint, a complainant should 
complete a Form AD-3027, USDA Program Discrimination Complaint Form, 
which can be obtained online at https://www.ocio.usda.gov/document/ad-3027, from any USDA office, by calling (866) 632-9992, or by writing a 
letter addressed to USDA. The letter must contain the complainant's 
name, address, telephone number, and a written description of the 
alleged discriminatory action in sufficient detail to inform the 
Assistant Secretary for Civil Rights (ASCR) about the nature and date 
of an alleged civil rights violation. The completed AD-3027 form or 
letter must be submitted to USDA by:
    (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410;
    (2) Fax: (833) 256-1665 or (202) 690-7442; or
    (3) Email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

VIII. 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.

IX. Executive Order 12988, Civil Justice Reform

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under this 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 
administrative proceedings will be required before parties may file 
suit in court challenging this rule.

X. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. Executive Order 13175 requires Federal agencies to consult 
and coordinate with tribes on a government-to-government basis on 
policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.

[[Page 2811]]

    The USDA's Office of Tribal Relations (OTR) has assessed the impact 
of this rule on Indian tribes and determined that this rule does not, 
to our knowledge, have tribal implications that require tribal 
consultation. If a tribe requests consultation, FSIS will work with the 
OTR to ensure meaningful consultation is provided where changes, 
additions, and modifications identified herein are not expressly 
mandated by Congress.

XI. Environmental Impact

    Each USDA agency is required to comply with 7 CFR part 1b of the 
Departmental regulations, which supplements the National Environmental 
Policy Act regulations published by the Council on Environmental 
Quality. Under these regulations, actions of certain USDA agencies and 
agency units are categorically excluded from the preparation of an 
Environmental Assessment (EA) or an Environmental Impact Statement 
(EIS) unless the agency head determines that an action may have a 
significant environmental effect (7 CFR 1b.4 (b)). FSIS is among the 
agencies categorically excluded from the preparation of an EA or EIS (7 
CFR 1b.4 (b)(6)).
    FSIS has determined that this final rule, which refines the 
Agency's existing label approval program, will not create any 
extraordinary circumstances that would result in this normally excluded 
action having a significant individual or cumulative effect on the 
human environment. Therefore, this action is appropriately subject to 
the categorical exclusion from the preparation of an environmental 
assessment or environmental impact statement provided under 7 CFR 
1b.4(6) of the U.S. Department of Agriculture regulations.

XII. Additional Public Notification

    Public awareness of all segments of rulemaking and policy 
development is important. Consequently, FSIS will announce this Federal 
Register publication on-line through the FSIS web page located at: 
https://www.fsis.usda.gov/federal-register.
    FSIS will also announce and provide a link to it 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 our constituents and stakeholders. The 
Constituent Update is available on the FSIS web page. Through the web 
page, FSIS is able to provide information to a much broader, more 
diverse audience. In addition, FSIS offers an email subscription 
service which provides automatic and customized access to selected food 
safety news and information. This service is available at: https://www.fsis.usda.gov/subscribe. Options range from recalls to export 
information, regulations, directives, and notices. Customers can add or 
delete subscriptions themselves and have the option to password protect 
their accounts.

List of Subjects

9 CFR Part 352

    Food labeling, Meat inspection, Reporting and recordkeeping 
requirements.

9 CFR Part 354

    Administrative practice and procedure, Animal diseases, Food 
labeling, Meat inspection, Rabbits and rabbit products, Reporting and 
recordkeeping requirements, Signs and symbols.

9 CFR Part 362

    Food labeling, Poultry and poultry products, Reporting and 
recordkeeping requirements.

9 CFR Part 412

    Food labeling, Food packaging, Meat and meat products, Meat 
inspection, Poultry and poultry products, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, FSIS is amending 9 CFR 
chapter III as follows:

PART 352--EXOTIC ANIMALS AND HORSES; VOLUNTARY INSPECTION

0
1. The authority citation for part 352 continues to read as follows:

    Authority: 7 U.S.C. 1622, 1624; 7 CFR 2.17(g) and (i), 2.55.


0
2. In Sec.  352.7:
0
a. Revise the section heading;
0
b. Remove the first sentence of the introductory text;
0
c. Add a sentence to the end of the introductory text.
    The revision and addition read as follows:


Sec.  352.7   Marking and labeling of inspected products.

    * * * All labels intended for use on inspected and passed exotic 
animal products must be approved in accordance with Part 412 of this 
chapter.
* * * * *

PART 354--VOLUNTARY INSPECTION OF RABBITS AND EDIBLE PRODUCTS 
THEREOF

0
3. The authority citation for part 354 continues to read as follows:

    Authority:  7 U.S.C. 1622, 1624; 7 CFR 2.17(g) and (i), 2.55.


0
4. Revise Sec.  354.60 to read as follows:


Sec.  354.60   Approval of official identification.

    All labels intended for use on inspected and passed rabbit products 
which bear any official identification must be approved in accordance 
with part 412 of this chapter.

PART 362--VOLUNTARY POULTRY INSPECTION REGULATIONS

0
5. 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.


0
6. In Sec.  362.2, revise the second sentence of paragraph (a) to read 
as follows:


Sec.  362.2  Types and availability of service.

* * * * *
    (a) * * * All provisions of Part 381, Part 412, and Sec. Sec.  
416.1 through 416.6 of this chapter shall apply to the slaughter of 
poultry, and the preparation, labeling, and certification of the 
poultry and poultry products processed under this poultry inspection 
service except for the following provisions: the definitions of 
``Act,'' ``animal food manufacturer,'' ``Inspection Service,'' 
``inspector,'' ``Inspector in Charge,'' ``poultry,'' ``poultry 
product,'' ``poultry food product,'' ``poultry products broker,'' 
``renderer,'' and ``U.S. Refused Entry'' in Sec. Sec.  381.1 b), 381.3 
(a), 381.6, 381.10, 381.13 through 381.17, 381.21, 381.29, 381.39 
through 381.42, 381.175(a)(2) and (3), 381.179, 381.185 through 
381.187, 381.192, and 381.195 through 381.225.
* * * * *

PART 412--LABEL APPROVAL

0
7. The authority citation for part 412 continues to read as follows:

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


0
8. In Sec.  412.1, remove and reserve paragraph (c)(2) and revise 
paragraph (e).
    The revision reads as follows:


Sec.  412.1   Label approval.

* * * * *
    (e) ``Special statements and claims'' are statements, claims, 
logos, trademarks, and other symbols on labels as defined in this 
paragraph (e).

[[Page 2812]]

    (1) The following are considered special statements and claims:
    (i) Those not defined in the Federal meat and poultry products 
inspection regulations or the Food Standards and Labeling Policy Book;
    (ii) ``Natural'' claims, regardless of whether they are defined in 
the Food Standards and Labeling Policy Book; and
    (iii) Health claims (including graphic representations of hearts), 
ingredient and processing method claims (e.g., high-pressure 
processing), structure-function claims, claims regarding the raising of 
animals (e.g., ``no antibiotics administered''), products labeled as 
organic (except for those where only individual ingredients are labeled 
as organic), and instructional or disclaimer statements concerning 
pathogens (e.g., ``for cooking only'' or ``not tested for E. coli 
O157:H7'').
    (2) The following are not considered special statements and claims:
    (i) Allergen statements (e.g., ``contains soy'') applied in 
accordance with the Food Allergen Labeling and Consumer Protection Act;
    (ii) Negative claims regarding ingredients not listed in the 
ingredients statement (e.g., ``No MSG Added,'' ``Preservative Free,'' 
``No Milk,'' ``No Pork,'' or ``Made Without Soy'');
    (iii) Statements that characterize a product's nutrient content in 
compliance with Title 9 of the CFR, such as ``low fat''; and
    (iv) Claims related to geographical significance, such as ``German 
Brand Made in the US,'' or those that make a country of origin 
statement on the label of any meat or poultry product ``covered 
commodity,'' \1\ or displays of geographic landmarks, such as a foreign 
country's flag, monument, or map.
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    \1\ See 9 CFR 317.8(b)(40) and 381.129(f).
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* * * * *


0
9. In Sec.  412.2, revise paragraph (b) to read as follows:


Sec.  412.2   Approval of generic labels.

* * * * *
    (b) Generically approved labels are labels that bear all applicable 
mandatory labeling features (i.e., product name, handling statement, 
ingredients statement, the name and place of
    business of the manufacturer, packer or distributor, net weight, 
legend, safe handling instructions, and nutrition labeling) in 
accordance with Federal regulations and do not bear special statements 
and claims as defined in Sec.  412.1(e).

    Done at Washington, DC.
Paul Kiecker
Administrator.
[FR Doc. 2023-00693 Filed 1-17-23; 8:45 am]
BILLING CODE 3410-DM-P