[[Page 30935]]

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Part II

Department of Health and Human Services

_______________________________________________________________________

Food and Drug Administration

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21 CFR Part 589

Substances Prohibited From Use in Animal Food or Feed; Animal Proteins
Prohibited in Ruminant Feed; Final Rule

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 589

[Docket No. 96N-0135]
RIN 0910-AA91

Substances Prohibited From Use in Animal Food or Feed; Animal
Proteins Prohibited in Ruminant Feed

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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SUMMARY: The Food and Drug Administration (FDA) is amending its
regulations to provide that animal protein derived from mammalian
tissues for use in ruminant feed is a food additive subject to certain
provisions in the Federal Food, Drug, and Cosmetic Act (the act). The
final rule establishes a flexible system of controls designed to ensure
that ruminant feed does not contain animal protein derived from
mammalian tissues and to encourage innovation in such controls. FDA is
taking this action because ruminants have been fed protein derived from
animals in which transmissible spongiform encephalopathies (TSE's) have
been found. Such proteins may cause TSE's in ruminants. TSE's are
progressively degenerative central nervous system diseases of man and
other animals that are fatal. Epidemiologic evidence gathered in the
United Kingdom suggests an association between an outbreak of a
ruminant TSE, specifically bovine spongiform encephalopathy (BSE), and
the feeding to cattle of protein derived from sheep infected with
scrapie, another TSE. Also, there may be an epidemiologic association
between BSE and a form of human TSE known as new variant Creutzfeldt-
Jakob disease (nv-CJD) reported in England. BSE has not been diagnosed
in the United States, and the final rule is intended to prevent the
establishment and amplification of BSE in the United States through
feed and thereby minimize any risk to animals and humans.

DATES: This final rule becomes effective on August 4, 1997, except
Sec. 589.2000(e)(1)(iv), which contains collection of information
provisions subject to review and clearance by the Office of Management
and Budget (OMB). FDA is announcing that the proposed collection of
information has been submitted to OMB for review and clearance under
the Paperwork Reduction Act of 1995. The provision of this section will
be effective upon approval. FDA will announce the effective date of
Sec. 589.2000(e)(1)(iv) in the Federal Register. Submit written
comments on the collection of information provisions by July 7, 1997.
FOR FURTHER INFORMATION CONTACT: George A. (Bert) Mitchell, Center for
Veterinary Medicine (HFV-6), Food and Drug Administration, 7500
Standish Pl., Rockville, MD 20855, 301-827-5587.

SUPPLEMENTARY INFORMATION:

I. Introduction

    In the Federal Register of January 3, 1997 (62 FR 552), FDA
published a proposed rule that would regulate persons that manufacture,
blend, process, and distribute certain animal protein products and
ruminant feeds containing such products. The proposed rule would create
a new Sec. 589.2000 entitled, ``Animal proteins prohibited in ruminant
feed.'' In general, the proposed rule would state that protein derived
from ruminant and mink tissues is not generally recognized as safe
(GRAS) for use in ruminant feed, but rather a food additive subject to
certain requirements under the act. The proposed rule also would
require certain cautionary statements on products that contain or may
contain such proteins, and establish recordkeeping requirements. These
proposed recordkeeping requirements were intended to facilitate
compliance with the rule. For example, an invoice obtained from a feed
manufacturer for a protein product not labeled with the cautionary
statement could be used to trace the product back to the supplier to
ensure that the supplier manufactures and distributes animal protein
products from nonruminant sources. The proposed rule also would reduce
or eliminate certain regulatory requirements upon the development of
methods for detecting or deactivating TSE agents, or for verifying
product identity.
    The preamble to the proposed rule contained information regarding
available scientific information about TSE's, industry practices, and
regulatory efforts concerning TSE's. The agency refers interested
persons to that document for such information. A list of recently
published, relevant scientific information also appears later in this
document.
    The preamble to the proposed rule also contained five alternatives
to the proposed restriction on the use of ruminant protein in ruminant
feed. These alternatives, which are discussed in greater detail later
in this document, included a restriction on the use of all ruminant and
mink materials (except those that have not been found to present a risk
of transmitting TSE's) in ruminant feed, a restriction on the use of
all mammalian protein in ruminant feed, a restriction on the use of
materials from domestic species (such as sheep, goats, mink, deer, and
elk) diagnosed as having a TSE, a restriction on the use of specified
sheep and goat offal in ruminant feed, and a ``no action'' alternative.
The final rule restricts the use of protein derived from mammalian
tissues, with certain exceptions, in ruminant feed. Thus, the final
rule represents a regulatory approach that covers more material and is
easier to implement than the proposed restriction on the use of
ruminant protein in ruminant feed, but is more flexible and better
suited to current industry practices than the alternative restriction
on the use of all mammalian protein in ruminant feed.
    FDA continues to believe, as it stated in the preamble to the
proposed rule, that it is prudent to take action prohibiting the use of
certain animal protein products in ruminant feed even though BSE has
not been diagnosed in the United States and there is scientific
uncertainty as to its origin, transmissibility, etc. This final rule
will prevent the establishment and amplification of BSE in the United
States through feed, an action the agency believes is necessary to
protect animal and public health.
    FDA received numerous comments, as discussed below, on its proposed
rule. Based on those comments, the agency, in the Federal Register of
April 17, 1997 (62 FR 18728), published the codified provisions of the
draft final rule and provided an opportunity for comment. The codified
provisions of the draft final rule were similar to those in the
proposed rule, but the draft final rule would prohibit the use of
protein derived from mammalian tissue with certain specific exceptions
(such as blood, gelatin, inspected and processed meat products that
have been cooked and offered for human consumption, and products whose
mammalian protein consists entirely of porcine protein). Additionally,
the codified provisions of the draft final rule would eliminate the
cautionary statements on pet food sold at retail, define the term
``ruminant,'' eliminate certain regulatory requirements if a renderer
used exclusively a validated, publicly-available method for controlling
the manufacturing process that minimizes the risk of the TSE agent
entering the product, and simplify the recordkeeping requirements.

[[Page 30937]]

    The agency received over 60 comments on the codified provisions of
the draft final rule. Most comments supported the draft final rule,
although several comments suggested technical changes, additional
exemptions, or clarifications. Other comments reiterated their
objections to any rulemaking that would declare tissues to be nonGRAS
for use in ruminant feed or advocated other alternatives (particularly
the use of hazard analysis critical control point programs).
    Based on those comments, the agency has made some changes in this
final rule. The final rule provides that protein derived from mammalian
tissues (with certain exclusions) is a food additive under the act. The
act defines a ``food additive'' as ``any substance the intended use of
which results or may reasonably be expected to result, directly or
indirectly, in its becoming a component or otherwise affecting the
characteristics of any food * * * if such substance is not generally
recognized, among experts qualified by scientific training and
experience to evaluate its safety, as having been adequately shown
through scientific procedures (or, in the case of a substance used in
food prior to January 1, 1958, through either scientific procedures or
experience based on common use in food) to be safe under the conditions
of its intended use * * *'' (see section 201(s) of the act (21 U.S.C.
321(s))). Expert opinion that the tissues are GRAS would need to be
supported by scientific literature, and other sources of data and
information, establishing that there is a reasonable certainty that the
material is not harmful under the intended conditions of use. Expert
opinion would need to address topics such as whether it is reasonably
certain that BSE does not, or will not, occur in the United States;
whether it is reasonably certain that the BSE agent will not be
transmitted through animal feed, i.e., that the processed tissues are
not infected by the agent, are deactivated by the rendering process or
are not transmitted orally; and whether it is reasonably certain that
the agent will not be transmitted to humans through consumption of
ruminant products. ``General recognition'' cannot be based on an
absence of studies that demonstrate that a substance is unsafe; there
must be studies to establish that the substance is safe. Also, the
burden of establishing that a substance is GRAS is on the proponent of
the substance (see U.S. v. An Article of Food * * * Coco Rico, 752 F.2d
11 (1st Cir. 1985).
    The preamble to the proposed rule included an extensive discussion
of the basis of FDA's preliminary conclusion that protein derived from
ruminant and mink tissue for use in ruminant feed is not GRAS, but
rather is a food additive under the act. As discussed in detail in the
agency's responses to the comments received on the proposed rule, FDA
did not receive any information that would refute its conclusion that
protein derived from ruminant and mink tissue for use in animal feed is
not GRAS.
    With regard to the scope of the final rule, protein derived from
mammalian tissues includes both ruminant and nonruminant tissues. FDA's
basis for its nonGRAS determination for ruminant and mink tissue is
discussed extensively in the preamble to the proposed rule and no
information was submitted to refute that determination. With regard to
nonruminant tissue besides mink, such tissues may include animals such
as cats, dogs, horses, swine, etc. As the preamble to the proposed rule
discussed concerning a mammalian-to-ruminant prohibition (62 FR 552 at
568), industry comments indicated that the usual practice at feed mills
and rendering facilities is to commingle ruminant and nonruminant
protein products. FDA indicated that regular commingling could provide
a basis to determine that protein from mammalian tissues is not GRAS
for use in ruminant feed. The description of industry practice received
in comments on the proposed rule again indicated that the practice is
to commingle ruminant and nonruminant protein. Because of the potential
TSE infectivity caused by mixing tissues from ruminant and mink and
other mammalian tissues, FDA has determined that protein derived from
mammalian tissues (with certain exclusions discussed later in this
preamble) is not GRAS for use in ruminant feed. FDA notes that the
ruminant-to-ruminant prohibition in the proposed rule also would have
prohibited the use in ruminant feed of this commingled tissue because
the definition of protein derived from ruminant and mink tissue would
apply to pure ruminant or mink tissue as well as other mammalian tissue
that could contain ruminant or mink protein due to commingling. This
final rule also reduces the risk of cattle and other ruminants being
exposed to an agent that causes feline spongiform encephalopathy and
acknowledges that feline protein could be a commingled component of
mammalian protein products.
    The definition of food additive in section 201(s) of the act does
not apply to substances used in accordance with a sanction or approval
granted prior to enactment of section 201(s) of the act and granted
under the act, the Poultry Products Inspection Act (21 U.S.C. 451 et
seq.), or the Federal Meat Inspection Act (21 U.S.C. 601 et seq.). The
Commissioner of Food and Drugs (the Commissioner) is unaware of any
prior sanction applicable to the use of protein derived from mammalian
tissue in ruminant feed. No one asserted a prior sanction for the use
of protein derived from ruminant and mink tissues in ruminant feed
based on the agency's discussion of a possible mammalian-to-ruminant
ban in the preamble to the proposed rule (62 FR 552 at 566). In
addition, no one asserted a prior sanction for use of protein derived
from mammalian tissues in ruminant feed in response to the agency's
discussion of a possible mammalian-to-ruminant prohibition in the
preamble to the proposed rule. The failure of any person to come
forward with proof of an applicable prior sanction is a waiver of the
right to assert or rely on a prior sanction at any later time.
    The agency notes, that for substances not included in the scope of
the definition of protein derived from mammalian tissues, persons may
continue to self determine whether such substances are GRAS for use in
ruminant feed. FDA's authority to determine substances to be food
additives under the act is discussed in further detail below in
responses to the comments on the proposed rule.
    The final rule also simplifies the cautionary statement for animal
feeds containing mammalian-derived proteins, eliminates the labeling
requirements for pet food products sold at the retail level and feeds
for nonruminant laboratory animals, and elaborates on the information
that must be kept and made available for inspection. These changes are
further discussed below in the responses to comments received on the
proposed rule.

II. Comments on the Proposed Rule and Draft Codified Text

    FDA received more than 700 comments on the proposed rule. The
comments came from a wide variety of organizations, such as cattlemen,
renderers, feed manufacturers, and pharmaceutical firms, Federal
agencies, foreign governments, State agriculture departments, trade
associations, professional organizations, universities and research
institutions, consumer organizations, and individual consumers.
Additionally, FDA held two public meetings on the proposed rule. The
first meeting was held in St. Louis, MO, on February 4, 1997, and
focused on the rule's economic impact and issues of interest to the
affected industries. The second meeting was

[[Page 30938]]

held in Washington, DC, on February 13, 1997, and focused on the rule's
environmental analysis and issues of interest to consumer groups and
organizations.
    Additionally, in the Federal Register of April 17, 1997 (62 FR
18728), FDA published the codified provisions of the draft final rule
and provided an opportunity for public comment. FDA received over 60
comments on the draft codified text.
    Most comments (including remarks made at the public meetings)
agreed that the Federal Government should take action to prevent the
establishment and amplification of BSE in the United States through
feed. However, many comments disagreed as to whether more or less
stringent regulatory efforts were needed. FDA also received comments
supporting and opposing each alternative that was described in the
preamble to the proposed rule, as well as numerous comments that
recommended new alternatives. To simplify the nature of the ideas
expressed in the comments, the comments can be divided into two groups.
One group would maximize the scope of the regulations, and the other
would minimize the scope of regulations.
    A large number of comments encouraged FDA to increase the scope of
the regulations to include a partial or complete mammalian-to-ruminant
prohibition or a mammalian-to-farm animal prohibition, or to apply a
feed prohibition on all food-producing animals, either to achieve a
greater reduction in the potential risk of human exposure or easier
compliance with less need for enforcement actions. For example, a few
comments asked that the proposed regulations be expanded to prohibit
the feeding of ruminant proteins to felines and zoo animals, and the
feeding of proteins from these animals to ruminants. Some comments
noted the presence of scrapie and other TSE diseases in the United
States and the epidemiological association between scrapie or a
modified scrapie agent and BSE in the United Kingdom in support of
enlarging the scope of the rule. One comment requested a ban on the
feeding of all animal remains to other animals, regardless of species
or processing method. Another comment noted that the specifications for
tallow allowed for the presence of a small amount of protein and the
possibility of a protein-associated infectivity.
    Other comments supported a ``minimalist'' approach. For example, a
significant number of comments pointed out that BSE has not been
diagnosed in the United States despite a most exhaustive surveillance
effort by Federal and State veterinary laboratory diagnosticians,
veterinarians accredited by the U.S. Department of Agriculture (USDA),
and veterinary practitioners who have been specifically trained to
diagnose the early clinical signs of BSE in cattle. The USDA through
statutes administered by the Animal and Plant Health Inspection Service
(APHIS) and the Food Safety and Inspection Service (FSIS) has taken
actions to ensure that the border defenses against importing the BSE
agent are as secure as possible. FDA has advised manufacturers of human
and animal drugs and devices, human biologics, dietary supplements, and
cosmetics to obtain bovine derived ingredients from countries which are
free of BSE. Some comments stated that the adoption by industry of
voluntary measures to avoid the rendering of fallen sheep or sale of
sheep proteins for use in ruminant rations, or to stop the feeding of
ruminant proteins to ruminants are sufficient, and no regulation is
warranted. Other comments reminded the agency of its public statements
that the risk of BSE occurring in the United States is low and getting
lower. A comment from a foreign regulatory official observed that zero
risk cannot be achieved and that the calculation of risk through a
mathematical model is essential; this comment also expressed the view
that the agency's proposed regulatory approach exceeded the risk of BSE
in the United States.
    A description of the comments and FDA's responses follows.

A. General Comments

1. Exclusions for Certain Products
    (Comment 1). Several comments, in addressing either the proposed
rule or the agency's alternatives to a ruminant-to-ruminant
prohibition, suggested exclusions for specific products. The suggested
exclusions included proteinaceous tissues (such as meat),
nonproteinaceous materials (such as grease, fat, tallow, amino acids,
and dicalcium phosphate as a byproduct of the gelatin manufacturing
process), and materials that are not considered to be tissues (such as
paunch meal, feces, and urine). A few sought exclusions for specific
organs, such as hearts and kidneys, or even exclusions for tissues
(such as distal ileum) that have been shown to be infective for TSE's
in experimental studies.
    The agency has carefully considered the various exclusions
suggested by the comments and has revised Sec. 589.2000(a)(1) to define
``protein derived from mammalian tissue'' as any protein-containing
portion of mammalian animals, excluding blood and blood products,
gelatin, inspected and processed meat products which have been cooked
and offered for human consumption and further heat processed for feed
(such as plate waste and used cellulosic food casings), milk products,
and products whose only mammalian protein consists entirely of porcine
or equine protein.
    FDA excluded these items from the definition because the agency
believes that they represent a minimal risk of transmitting TSE's to
ruminants through feed. The excluded proteins and other items are
materials that the available data suggests do not transmit the TSE
agent, or have been inspected by the FSIS or an equivalent State agency
at one time and cooked and offered for human food and further heat
processed for feed and thus are of lower risk than those products that
the agency has determined to be nonGRAS, or current industry practices
can provide assurances that certain mammalian products can be produced
without becoming commingled with potentially infective materials.
Additional information on specific exemptions appears later in this
document.
    The agency did not revise the definition to exclude nonproteins or
items that are not considered tissues. Such products, for example,
tallow, fats, oils, grease, amino acids, and dicalcium phosphate as a
byproduct of the gelatin manufacturing process, are not covered under
this rule and thus do not require a specific exclusion. Moreover,
infectivity studies conducted on some of these products (e.g., tallow)
have demonstrated that they are at low risk of transmitting the TSE
agent. As for those comments suggesting exclusions for specific organs
or tissues, FDA declines to exempt such organs or tissues either
because of their demonstrated infectivity or because they have not been
sufficiently studied to confirm that they cannot transmit TSE disease
to ruminants or may present a higher risk of transmitting a TSE to
ruminants or because current industry practice does not support
separation of these organs or tissues from other higher-risk organs or
tissues. For example, under current industry practices, separation of
muscle meat from potentially infective nervous tissue from spinal cords
or nerve tissue connected to spinal cords cannot be assured. In
addition, FDA notes that the origin of these materials is not easily
determined when they arrive at a rendering facility.
    The agency may revise the rule further to add or delete items from
the

[[Page 30939]]

list of exclusions and make necessary corresponding changes to the rule
when sufficient scientific information becomes available about the
ability of those items to transmit TSE disease.
2. Scientific Issues
    Numerous comments raised scientific issues regarding BSE, nv-CJD,
and the need for additional scientific research.
    a. Causes of BSE.
    (Comment 2). Several comments stated that BSE is unlikely to occur
spontaneously in an individual animal.
    Although the theory that TSE's occur spontaneously as well as the
other theories as to BSE's origins (see 62 FR 552 at 558 and 559) are
not proven, FDA has not discounted any theory. The final rule would
prevent the establishment and amplification of BSE in ruminants through
feed by prohibiting the use of proteins derived from mammalian tissue
in ruminant feed regardless of whether BSE may occur spontaneously or
enter the United States through imported animals or animal products or
may result from a cross-species or intra-species transmission of a TSE
agent.
    (Comment 3). Many comments claimed that scrapie in sheep was the
cause of BSE in the United Kingdom.
    FDA agrees that the use of sheep with scrapie which were rendered
and fed to cattle as meat and bone meal is a possible cause of BSE in
the United Kingdom. This final rule prevents sheep materials from being
processed and fed back to cattle and other ruminants. Additionally,
some comments stated that the adoption by industry of voluntary
measures to avoid rendering of fallen sheep and the sale of sheep
proteins to ruminants should provide sufficient safeguards to allow
sheep to be excluded from the final rule. FDA disagrees with this
statement because sheep are known to have a TSE (scrapie) that has a
long incubation period and because of information from an FDA survey
conducted in 1992 that clearly showed that a voluntary ban was not
fully implemented and that sheep that had died of causes other than
slaughter were being rendered and that rendered sheep protein was being
sold for use in the manufacture of cattle feed. This survey is
discussed in the preamble to the proposed rule (62 FR 552 to 582).
    (Comment 4). Several comments argued that, in the United Kingdom,
BSE was spread by ruminant-to-ruminant recycling.
    FDA agrees that, in the United Kingdom, BSE was spread by the
practice of feeding ingredients from processed BSE-infected cattle to
other cattle, including young calves. The processes that were used did
not completely inactivate the BSE agent. This final rule prevents
ruminant-to-ruminant recycling.
    (Comment 5). Several comments pointed out that the cause of BSE is
unknown.
    Even though the exact nature of the cause of BSE and many aspects
of its etiology and pathogenesis are unknown, studies indicate that the
feeding of BSE-infected material to cattle spread the disease to
uninfected animals. The final rule is intended to prevent the
establishment and amplification of BSE in the United States through
feed even though many details regarding the BSE agent are unknown.
    b. Epidemiology of BSE.
    (Comment 6). Numerous comments expressed concern that transmissible
mink encephalopathy (TME) resulted from mink being fed materials
derived primarily from downer cattle. These comments suggested that
this possible link between cattle and TME may indirectly indicate that
BSE is already present in the United States cattle population.
    The exact cause of these TME outbreaks, the most recent occurring
in 1985, has not been proven, but FDA agrees that there is a
possibility that the theory is correct. The final rule, however, would
prevent cattle-to-cattle transmission of any undetected BSE in the
United States as well as the transmission of TSE's from mink to cattle.
    (Comment 7). Several comments claimed that BSE is present in pigs
in the United States.
    Based on the available evidence, FDA does not believe that BSE is
present in pigs in the United States. A naturally-occurring TSE has not
been identified in pigs in the United States or elsewhere in the world.
FDA is aware that, in a study conducted in the United Kingdom, 1 out of
10 pigs appeared to develop TSE lesions after exposure to BSE (Ref. 1),
but this infection occurred through intracerebral, intraperitoneal, and
intravenous inoculation rather than under natural conditions (such as
feeding). Despite these new inoculations, the other nine pigs did not
develop a TSE. In another experiment, newborn pigs fed the BSE agent
have remained healthy at 72 months of age (Ref. 2).
    (Comment 7a). One comment claimed that a TSE was observed in U.S.
pigs in 1979.
    The cause of the clinical signs and lesions cannot be affirmed or
completely refuted. FDA notes that it has been over 17 years since the
incident was reported and that there have been no reports of a
recurrence. From FDA's evaluation of this comment, the agency notes
that the condition caused by salt toxicity/water deprivation, produces
similar clinical signs and lesions as those reported in the 1979
incident.
    (Comment 8). Many comments pointed out that TSE's already exist in
animals in the United States. These comments usually referred to TSE's
in sheep, goats, elk, mink, and deer.
    FDA agrees that TSE's already exist in some animals in the United
States and identified several such TSE's in the preamble to the
proposed rule (see 62 FR 552 at 556 and 557 (describing scrapie, TME,
and chronic wasting disease (CWD))). By prohibiting the use of proteins
derived from mammalian tissues in ruminant feed, the final rule should
prevent the transmission of these diseases to ruminants through feed.
    (Comment 9). Several comments cited feline spongiform
encephalopathy (FSE) as an example of the BSE agent's ability to cross
species barriers.
    The epidemiology of FSE supports this theory, but the risk of BSE
crossing species barriers is present only in a country where BSE
exists. The United States has no BSE, and the final rule provides the
necessary feed controls to limit the risk of BSE crossing species
barriers and infecting U.S. cattle and other ruminants through feed
uses of protein products from infected animals should BSE occur here
(i.e., a preventive barrier to the establishment and amplification of
BSE through feed).
    (Comment 10). Some comments argued that TSE diseases may occur in
all animals, and prions have been identified in species as diverse as
salmon and fruit flies.
    Prions are proteins and are normal constituents of many living
organisms ranging from yeast to mammals. The function of prions are
unknown. Under one theory, the TSE or BSE agent is an abnormal,
infectious protein that changes a normal ``host'' protein or prion in
an animal or organism into the causative agent (see 62 FR 552 at 558).
At this time, a naturally occurring TSE has not been identified in all
animals. For example, although horses, pigs, poultry, salmon, and fruit
flies have prions, they are not known to have naturally-occurring
TSE's.
    (Comment 11). Several comments discussed the possibility of BSE
being present in the feces of poultry that consumed cattle meat and
bone meal in their diets. These comments expressed concern that the BSE
agent would spread to cattle which might consume poultry litter in
their feed or to plants to which poultry litter was applied as a
fertilizer.

[[Page 30940]]

    FDA is unaware of any research on this issue that would indicate
that the agency should take regulatory action on poultry litter at this
time.
    c. Transmission of BSE.
    (Comment 12). Many comments addressed the safety of various tissues
(such as blood, bone, and muscle) relative to TSE diseases. For
example, some comments asserted that ruminant blood will not transmit
TSE whereas others claimed that blood presents some risk of
infectivity. Other comments asserted that bone and muscle are safe, but
that brain, spinal cord, and eyes are high-risk tissues for TSE. Some
comments claimed that oral transmission of TSE is very inefficient.
    The research to date on TSE diseases and the infectivity of various
tissues from infected animals consists of 2 types. The first consists
of extensive research carried out over a long period of time in sheep,
using sheep as the model for evaluating scrapie and other TSE diseases.
This research has provided valuable information about the nature of the
diseases in animals and comparatively little on the infectivity of
tissues. The second consists of recent studies that have been carried
out in other animals using agents such as BSE in cattle and TSE's in
mice. Many of the tissue infectivity studies for scrapie and BSE have
been carried out using several different strains of laboratory mice
which have various degrees of natural susceptibility to TSE's. Samples
of tissues taken from TSE infected animals are inoculated into the
brain of these laboratory animals. The assessment of the infectivity of
tissues has been based on the outcome of these studies. The results of
this research indicate that blood, bone, certain other tissues, and
tallow do not transmit TSE to the experimentally exposed mice whereas
samples of brain, spinal cord, eyes, and some areas of the intestinal
tract from cattle that died of BSE transmit a TSE to the mice.
    FDA agrees with the comments regarding the comparative infectivity
of oral versus intracerebral routes of exposure and the estimate that
the oral route might be as much as 100,000 times less infective than by
injection (Ref. 3). However, at this time, research has not provided
adequate data on the level of infectivity from oral transmission.
    (Comment 13). Other comments pointed to the unproven nature of the
rodent bioassay for safety evaluation of various animal tissues. The
comments stated that the TSE agent may be in other tissues at amounts
below the detection limit of the rodent bioassay. The comments asserted
that, if the lowest infectious dose of BSE is very small, undetected
small amounts of agent in tissues could theoretically transmit TSE to a
new host.
    FDA agrees that the infective dose of TSE agents is small and that
bioassays have limitations. The results of these assays cannot
presently be confirmed by more traditional chemical or microbiological
methods. Therefore, while small undetected amounts of the TSE agent
could be present in the tissue, at this time, the agency believes these
amounts present a minimal risk.
    (Comment 14). Several comments discussed recent information
describing maternal transmission of BSE. These comments stated that
maternal transmission is at a very low rate and would not maintain the
epidemic in the United Kingdom. Other comments claimed that lateral
transmission (from one animal to another in the same herd) is not
detected in BSE, whereas some comments stated that BSE crosses species
barriers.
    FDA acknowledges these characteristics of BSE, and the preamble to
the proposed rule identified possible maternal transmission and BSE's
ability to cross species barriers as being among the various factors
justifying FDA's regulation of proteins intended for use in ruminant
feed in order to prevent the establishment and amplification of BSE in
the United States through feed (see 62 FR 552 at 559 and 560). While it
may be true that the risk of maternal transmission is very low and will
not sustain a significant epidemic as discussed in the preamble to the
proposed rule, the possible use of infected protein from mammalian
tissues in cattle feed may lead to establishment and amplification of
BSE in the United States through feed. Thus, the final rule ensures
that, whatever the mode of transmission, the TSE agent will stop with
the infected animal.
    (Comment 15). One comment suggested that FSE-infected cats
transported to the United States from the United Kingdom could
introduce BSE into the United States if the carcasses of those cats
were permitted to be rendered into meat and bone meal.
    The probability that such a scenario would occur appears to be
remote since fewer than 100 cats in the United Kingdom have been
diagnosed with FSE, and, therefore, the probability that an infected
cat would be transported to the United States is small. Furthermore,
relatively few domestic cats (those that are considered family pets)
are rendered upon their deaths. Rendering of cat carcasses is much more
common for feral or stray animals, but in the event that FSE-infected
tissues were rendered into meat and bone meal, the final rule prohibits
the use of proteins derived from mammalian tissues, including feline
tissues, in ruminant feed. Therefore, FSE-infected cats will not cause
BSE in the United States through feed.
    (Comment 16). Two comments expressed the view that protein derived
from cats and zoo animals should be prohibited from use in feeds
intended for ruminants, cats, and zoo animals. This recommendation was
based on the fact that domestic cats and other members of the family,
Felidae, including zoologic specimens are susceptible to TSE.
    The agency agrees that the concerns raised in the comments are
valid, and the final rule prohibits the use of feline and ruminant
protein in ruminant rations including the rations of ruminants
maintained in zoological exhibits. The final rule does not prohibit the
use of mammalian-derived protein in feeds intended for felids or
nonruminant zoo animals because the intent of the rule is to prevent
the establishment and amplification of BSE in the United States through
feed and thereby minimize risk to animals and humans. The feed use of
protein from felids and zoo animals in feed for cats and nonruminant
zoo animals should not present a risk of establishing and amplifying
BSE in the United States through feeds for ruminants.
    d. New Variant Creutzfeldt-Jakob Disease (nv-CJD).
    (Comment 17). Many comments expressed concern about the emergence
of nv-CJD in the United Kingdom and France and that it may have been
transmitted to humans through meat consumption. Some comments raised
concerns that nv-CJD might occur in the United States.
    FDA shares this concern about nv-CJD and, in conjunction with the
Centers for Disease Control and Prevention, is monitoring it closely.
As stated in the preamble to the proposed rule, the epidemiological
studies conducted in the United Kingdom do not directly link nv-CJD to
meat consumption, but suggest that the nv-CJD cases are linked to
exposure to BSE before the introduction of specified tissue bans in the
United Kingdom in 1989 (62 FR 552 at 561). In October 1996, a study
using strain typing techniques for TSE's compared nv-CJD's strain
characteristics against BSE transmitted to mice and macaques. The
results showed nv-CJD's strain characteristics to be consistent with
BSE as the source of nv-CJD. This study, which appeared in the October
24, 1996, issue of Nature (Ref. 4), provided a suggested link between
BSE

[[Page 30941]]

and nv-CJD, but was not direct proof of such a link.
    The Centers for Disease Control and Prevention completed a survey
in 1996 of cases of CJD in the United States and found no cases that
fit the characteristics of nv-CJD. Additionally, most meat products
consumed by humans are subject to USDA's jurisdiction, and USDA is
examining this issue to identify any risk and ways to minimize the
risks, if any, to consumers.
    e. Research needs for BSE.
    (Comment 18). Numerous comments expressed concern about the lack of
adequate published research on TSE diseases, inactivation of the
agents, and public health implications. For example, some comments
noted the lack of information about the minimum infective dose for BSE
while others expressed a need to develop a process to inactivate or
eliminate the BSE agent during rendering or to develop specific and
sensitive analytical methods for animal feeds that would detect
rendered proteins from various species.
    FDA agrees, as discussed in the preamble to the proposed rule, that
many scientific issues related to TSE's remain unresolved. The agency
encourages research that addresses these needs, specifically (but not
limited to): Determination of minimum infective oral dose for
establishment of BSE in cattle; development and validation of a process
to inactivate or eliminate the BSE agent during rendering; development
of specific and sensitive analytical methods for the detection of
rendered proteins from various species in animal feeds; development of
a highly sensitive bioassay for determination of the TSE agent presence
in animal tissues; and development of specific antemortem tests to
detect the presence of TSE agents and diseases in animals.
    f. New scientific information.
    Several recently published articles on TSE's, BSE, and nv-CJD are
not referenced in the proposed rule. In brief, the most relevant of
these scientific publications are listed in the references in section
IX of this document.
    In one article, the physicochemical properties of the BSE and nv-
CJD molecules were characterized to identify strain variations with nv-
CJD (Ref. 4). It was found that nv-CJD is distinct from other types of
CJD and resembles BSE transmitted to mice, cats, and macaque, which is
consistent with BSE being the source of nv-CJD.
    In another article, the authors used mathematical models to make
assumptions about the incubation period for nv-CJD and the number of
exposed people (Ref. 5). Based on these assumptions, they outlined a
range of scenarios to estimate the future incidence of nv-CJD in the
United Kingdom. A large measure of uncertainty surrounds any modeling
that is based on 14 cases of nv-CJD and a lack of reliable information
about the incubation period for nv-CJD.
    The results of USDA's examination of 5,427 cattle brains were
discussed in a recent article (Ref. 6).
    Another article discussed the detection of scrapie in peripheral
nerves of scrapie-diseased sheep and concluded that mutton of scrapie-
diseased animals should not be regarded as being free of the scrapie
agent (Ref. 7).
    Prion protein was not detected by Western blot analysis in 55
percent of mice inoculated intra-cerebrally with BSE, although it was
detected in 100 percent in subsequent passages (Ref. 8).
    The hypothesis that BSE is a zoonosis was described and the risk
characterized as low (Ref. 9).
    TSE's, including clinical signs, gross and microscopic lesions, and
ancillary test findings, in wild deer and elk in north-central Colorado
from 1981 to 1995 were described (Ref. 10). The disease in wild cervids
is indistinguishable from that reported in captive deer and elk.
    The articles do not provide entirely new information, but rather
add to the basic knowledge about TSE's and the need for this final
rule. FDA has placed these articles in the administrative record for
the final rule.
3. Enforcement-Related Issues
    A number of comments addressed issues related to enforcement of the
rule.
    (Comment 19). Several comments stated that the proposed rule would
be enforceable. However, several others argued that the rule would not
be enforceable. The latter comments gave several reasons for their
position, including the following: (1) There is no practical analytical
test to distinguish ruminant protein from nonruminant protein.
Enforcement, therefore, would depend on compliance with the rule's
labeling and recordkeeping requirements which could be vulnerable to
falsification or other abuse; (2) the rule's reliance on invoices may
be inadequate because invoices may not contain sufficient information
and may not be kept routinely; and (3) the clean-out procedures for
firms that intend to separate ruminant from nonruminant protein (as
provided by the proposed rule) would not be readily enforceable.
Several comments recommended that the agency adopt a mammalian-to-
ruminant prohibition because a practical analytical test (feed
microscopy) for distinguishing mammalian from nonmammalian proteins is
available.
    When the agency issued the proposed rule, it acknowledged that the
mammalian-to-ruminant alternative might be more easily enforced than
the ruminant-to-ruminant prohibition in the proposed rule. However, the
agency intended to commit the resources necessary to enforce the
ruminant-to-ruminant option if adopted. The agency believed that the
rule which it proposed could be enforced. For example, the
establishments that would not separate ruminant from nonruminant
protein would be subject to the simple, enforceable requirement that
labeling for all outgoing products bear the statement cautioning
against use of the product in ruminant feed. The agency estimated that
the great majority of affected establishments--independent renderers,
blenders, and feedmills--would elect not to separate products. Those
that did separate products would be subject to additional scrutiny,
such as on-site inspection that would include inspection of incoming
product as well as observation of facilities and processes for
separation. In addition, the agency has had experience in enforcing the
act in other settings in which it was unable to test for violative
products.
    Limiting the mammalian species exclusion to pure porcine or equine
products narrows the number of acceptable mammalian protein sources for
ruminant feeds, thus simplifying the agency's records review and trace
back efforts. The fact that some comments from regulated industries
suggested support for a mammalian-to-ruminant prohibition should foster
voluntary compliance.
    (Comment 20). Several comments stated that the role of the States
in enforcing the rule is unclear, but that State agencies lack the
authority to enforce some aspects of the rule. Some comments also asked
whether the rule imposed an unfunded mandate upon States.
    Because this regulation is a Federal rule, only those State
employees that are commissioned by FDA under section 702(a) of the act
(21 U.S.C. 372(a)) would have a role in enforcing this rule. For
commissioned State employees that have the same enforcement authority
as FDA employees, such employees would be able to fully enforce the
rule. State employees who are not commissioned do not have authority to
enforce this rule. Comments about unfunded mandates imposed on States
are discussed elsewhere in this document.

[[Page 30942]]

    (Comment 21). Several comments suggested additional approaches to
enhance the rule's enforceability. One comment suggested that the
agency allow firms to substitute commercial contract guarantees (that
the product does not contain ruminant material) instead of maintaining
and providing sales invoices. The guarantees would be available for FDA
inspection and copying. The comment asserted that use of such a
guarantee would provide assurance that meat and bone meal containing
ruminant or mink protein would not be inadvertently accepted for
delivery at commercial feedmills.
    FDA agrees that such a provision could enhance enforcement, through
both self-regulation within the industry and enforcement of the act
which makes the giving of a false guarantee a violation of section
301(h) of the act (21 U.S.C. 331(h)). However, it is unclear from the
comments whether the commercial contract guarantees would provide
adequate information for FDA to trace back purchases of protein
products and feeds. Therefore, it is unclear whether the guarantees
would enhance enforcement. In any event, the final rule, as written,
provides the necessary tools for enforcement. Therefore, the agency
declines to accept the comment's suggestion.
    (Comment 22). One comment suggested that the agency revise the rule
to require renderers to register with FDA.
    Through the use of publicly available sources (such as trade
publications), the agency has access to a comprehensive list of
renderers, so a registration requirement is, at this time, unnecessary.
    (Comment 23). One comment asked FDA to clarify the penalties that
would be associated with a violation of the rule. Other comments asked
the agency to discuss the consequences of a violation of the regulation
and whether a person must knowingly have committed a violation.
    The agency notes that it intends to implement a vigorous
enforcement program. Although FDA cannot specify the penalty that would
be imposed in any given scenario or case, the agency does note that the
act provides several possible sanctions, including, but not limited to,
injunctions (see section 302 of the act (21 U.S.C. 332)), criminal
penalties (see section 303 of the act (21 U.S.C. 333)) and seizure of
the adulterated or misbranded product (see section 304 of the act (21
U.S.C. 334)). Seizure and injunction actions generally do not require
knowledge on the part of responsible persons, and criminal violations
may or may not require such knowledge.
    (Comment 24). Some comments asked about the disposition of
adulterated feed, animals that have been fed adulterated feed, and
products, such as milk, from animals that were fed adulterated feed.
    The agency has guidance documents for the disposition of products
found to be violative under the act (see for example CPG 675.200). This
guidance can be used to facilitate the disposition of products
determined to be violative as a result of this final rule.
Alternatively, the agency can consider the disposition based upon the
unique factors of the situation.
    (Comment 25). One comment expressed concern about the adequacy of
FDA's enforcement resources, stating a need for more frequent
inspections of regulated firms such as feedmills. Another comment
stated that an ``unlevel playing field'' would exist in the animal feed
industry such that FDA would devote more regulatory attention to a
relatively small number of registered (as opposed to unregistered)
feedmills.
    FDA reiterates its intention to commit adequate resources to
enforcing this rule and to implement a vigorous enforcement program.
FDA will allocate those resources in such a way that all segments of
the industry receive attention commensurate with the risk presented by
a violation in each segment.
    (Comment 26). Several comments expressed the expectation that a
mammalian-to-ruminant prohibition, if adopted by the agency, would also
simplify the requirements placed on the affected industries. For
example, the comments stated that, under a mammalian-to-ruminant
prohibition, no special labeling would be required and that
recordkeeping could be simplified.
    Because the mammalian-to-ruminant prohibition in this final rule
includes certain exceptions, the labeling and recordkeeping
requirements are necessary, and the agency has retained them (with some
revisions) in the final rule.
    (Comment 27). Several comments implied that certain options, other
than a ruminant-to-ruminant or mammalian-to-ruminant prohibition, would
be enforceable. These options included a partial ruminant-to-ruminant
prohibition, a prohibition only of proteins from TSE species, and a
plan for ``certified ruminant derived protein'' based on a hazard
analysis critical control point (HACCP) program approach. Some comments
also stated that the ruminant-to-ruminant prohibition would be
unenforceable.
    As stated earlier, the final rule adopts a mammalian-to-ruminant
prohibition with certain exceptions. The agency agrees that there are
alternatives to a ruminant-to-ruminant or a mammalian-to-ruminant
prohibition. Each alternative, including a ruminant-to-ruminant or a
mammalian-to-ruminant prohibition, presents various enforcement
challenges. FDA believes, however, that the final rule is a reasonable
approach in terms of enforcement.
    (Comment 28). One comment, from a cattle producers' organization,
referred to that organization's commitment (along with many others) to
ensure enforcement of the final rule. The organization pledged that it
would work diligently to inform producers of their role in enforcement.
Several other comments advocated use of educational programs, including
education to consumers, and guidelines.
    The agency appreciates the comment's commitment and intends to work
closely with industry associations in educational efforts. The agency
also expects to implement an educational program for consumers and the
affected industries and will provide guidance documents to the affected
industries.
4. Comments on the Alternatives
    a. Background.
    The preamble to the proposed rule listed 6 regulatory alternatives
to prevent the establishment and amplification of BSE in the United
States through feed (62 FR 552 at 567). The alternatives ranged from a
prohibition on the use of mammalian tissue in ruminant feed to a ``no
action'' alternative. FDA received comments supporting and opposing
each alternative, as well as numerous comments that suggested new
alternatives.
    The principal alternative was a prohibition on the use of ruminant
proteins in ruminant feed; this was the alternative initially selected
by the agency and used in the proposed rule. Comments on the
``ruminant-to-ruminant'' prohibition are addressed later in this
document. The other alternatives and the comments submitted on those
alternatives are described below.
    b. The partial ruminant-to-ruminant prohibition.
    The second alternative was to exclude all ruminant and mink
materials, except those that have not been found to present a risk of
transmitting TSE's, from ruminant feed. This was commonly known as the
``partial

[[Page 30943]]

ruminant-to-ruminant'' ban. The exclusions, in addition to milk
products, gelatin, and bovine blood, might have covered products such
as bovine byproducts that have been inspected and passed in inspected
slaughter facilities (except for the brain, eyes, spinal cord, and
distal ileum because these tissues have been shown to transmit TSE's).
This alternative had the advantage of having its prohibitions based
primarily on scientific information related to the infectivity of
specific tissues, yet it also had several important disadvantages. For
example it may be impractical in the slaughter and rendering processes
to segregate and to exclude the protein tissues that have not been
found to present a risk of transmitting TSE disease. USDA expressed
reservations that separating the distal ileum from other intestinal
offal could jeopardize a slaughter plant's ability to meet pathogen
reduction goals required by USDA's HACCP regulations. (The ``ileum'' is
the terminal part of the small intestine, from the free edge of the
ileocecal fold to the ileocecal orifice, and enters the junction of the
cecum and colon obliquely on the medial surface. ``Offal'' refers
generally to material left as a byproduct from the preparation of some
specific product, less valuable portions and the byproducts of
milling.) Enforcement would also be impractical because there is no
specific diagnostic method for identifying protein derived from such
tissues. Additionally, the alternative would not address the risk that
other tissues may present a risk of infectivity (62 FR 552 at 567 and
568).
    (Comment 29). Several comments supported this alternative, although
most would modify it to cover only some tissues (such as tissues that
are known to be infective in sheep, cattle, or other species),
conditioned their support on the addition of other requirements (such
as a HACCP program and good manufacturing practices (GMP's)), or
conditioned their support on the feasibility of enforcing this
alternative. A smaller number of comments opposed this alternative;
most reiterated the arguments set forth in the preamble to the proposed
rule by stating that there is inadequate scientific information to
determine whether a particular tissue is or is not safe for use in
ruminant feed, that separating certain tissues may be unsafe or
impractical, and that the absence of a test to detect the TSE agent
warrants rejection of this alternative.
    The agency agrees with those comments that oppose a partial
ruminant-to-ruminant prohibition. The agency is persuaded that under
current industry practice, separating acceptable ruminant tissues from
unacceptable ruminant tissue may be impractical, and the current lack
of scientific knowledge about the TSE agent and BSE, coupled with the
lack of a detection method, makes this alternative less acceptable
compared to a mammalian-to-ruminant prohibition which is more
enforceable and also endorsed by the most affected industries.
    (Comment 30). Two comments raised the concern that the stunning of
cattle at slaughter by captive bolt results in the formation of brain
emboli which lodge in tissues that are normally considered to be
incapable of transmitting TSE diseases. If protein derived from those
tissues was permitted for use in ruminant rations, it potentially could
transmit TSE diseases to ruminant animals. For this reason, it was
argued that a partial ruminant-to-ruminant prohibition may fail to
prevent the introduction and amplification of BSE in the United States.
    The probability of introducing BSE into the United States from the
small amount of nervous tissue that would be expected to result from
brain emboli is minimal under a partial ruminant-to-ruminant
prohibition; however, the final rule eliminates even this minimal
probability because it provides that all mammalian tissues (with
certain exceptions) are prohibited from use in ruminant rations.
    c. The mammalian-to-ruminant prohibition.
    The third alternative was to prohibit the use of all mammalian
protein in ruminant feed (``mammalian-to-ruminant'' prohibition). The
preamble to the proposed rule noted that some rendering and feed
associations supported this alternative because separating ruminant
from nonruminant materials or proteins might not be feasible due to the
routine industry practice of commingling protein products (62 FR 552 at
568). The preamble to the proposed rule also noted that this
alternative would provide greater assurance of industry compliance than
a partial or total ruminant-to-ruminant prohibition because practical
analytical methods exist for distinguishing mammalian from nonmammalian
proteins and that this alternative would not require additional or new
labeling. Furthermore, the preamble to the proposed rule stated that
this alternative would avoid concerns about permitting some products
containing meat and bone meal to be used in ruminant feeds while
prohibiting others and the effect on financially sensitive commodities
markets for animal protein.
    The disadvantages to a mammalian-to-ruminant prohibition included
the absence of scientific data establishing or suggesting TSE
infectivity in nonruminant animals (other than in cats or mink) and
claims from some industries that they would prefer or had the ability
to separate ruminant from nonruminant tissues.
    (Comment 31). The mammalian-to-ruminant alternative received the
most support among the alternatives to a ruminant-to-ruminant
prohibition discussed in the preamble to the proposed rule. These
comments came from the affected industries (although most would prefer
alternatives to this rulemaking), consumer groups, other government
agencies (including a foreign government), and academia. Most comments
supporting this alternative explained that it would provide the same or
more protection than the proposed rule, would be both practical and
enforceable, would give greater assurance of industry compliance, and
would be consistent with international initiatives. However, some
comments acknowledged that the current scientific evidence provides
more support for a specified tissue prohibition or ruminant-to-ruminant
prohibition rather than a mammalian-to-ruminant prohibition.
    FDA has revised the rule to prohibit the use of protein derived
from mammalian (rather than ruminant) tissues, with certain exclusions.
Numerous comments from the rendering and feed industries advocated a
mammalian-to-ruminant prohibition. These industries indicated that a
mammalian-to-ruminant prohibition would result in easier and greater
compliance (because the usual industry practice is to commingle
ruminant and nonruminant material rather than separate ruminant from
nonruminant material) and provide a higher degree of confidence in the
feed or feed ingredients produced and sold. Given this practice of
commingling tissues, the possibility of cross-contamination of
nonruminant mammalian tissues through contact with ruminant tissues,
and reasons explained elsewhere in this document, FDA has determined
that protein derived from mammalian tissues (as defined in the rule) is
not GRAS for use in ruminant feed and has revised the final rule
accordingly. The agency recognizes that, under current industry
practices, pigs and horses may be slaughtered at dedicated slaughtering
facilities which produce either pure porcine or pure equine material.
The exclusion of equine material in addition to porcine material in the
final rule is a change from the proposed codified

[[Page 30944]]

material. This change was made in response to comments (see comment 44
response) that for mammals which are considered to be major food
animals, neither porcine nor equine species have ever been diagnosed
with a naturally occurring TSE. For porcine and equine materials,
persons may continue to self determine whether their use in ruminant
feed is GRAS.
    FDA also considered various exclusions to the rule. These
exclusions are discussed elsewhere in this document.
    (Comment 32). Several comments offered alternatives to a mammalian-
to-ruminant prohibition, such as the exclusion of sheep under 12 months
of age and cattle under 30 months of age. The comments claimed that
animals in these age groups seldom exhibit clinical signs of TSE.
    FDA declines to revise the rule as suggested by the comments.
Because of the long incubation period for TSE's, an infected animal may
not exhibit any clinical signs. Scrapie has been detected in 7-month-
old sheep (discussed fully in the preamble to the proposed rule) and
results of a BSE maternal transmission study conducted in the United
Kingdom suggest that the risk of maternal transmission is approximately
10 percent for BSE infected cows. Additionally, there is little
specific knowledge about the infectivity of tissues and organs during
this period.
    d. The prohibition of materials from U.S. species diagnosed with
TSE's.
    The fourth alternative was to prohibit the use of materials from
species in which TSE's have been diagnosed in the United States (sheep,
goats, mink, deer, and elk) in ruminant feed. The preamble to the
proposed rule noted that this alternative would eliminate the scrapie
agent, TME, and CWD from ruminant feed, and thereby reduce the risk of
BSE in cattle by TSE transmission from other animal species (62 FR 552
at 568). However, it also noted that this alternative would not prevent
the spread of BSE in the United States if BSE occurred for another
reason, such as spontaneous mutation in cattle or the importation of
animals infected with BSE (when such imported animals are subsequently
processed and used in ruminant feed).
    (Comment 33). FDA received several comments supporting this
alternative and a smaller number opposing it. The comments supporting
this alternative stated that it was the most prudent and pragmatic
alternative and is supported by current scientific evidence. Comments
opposed to this alternative stated that it would not prevent
amplification of BSE, would not exclude cattle (because no U.S. cattle
have been diagnosed as having BSE or a TSE), and would make it more
difficult to exclude potentially infective tissues from ruminant feed.
One comment questioned whether this alternative would extend to
prohibiting any feed materials to any animal, including nonruminants.
    After considering the comments, FDA declines to adopt this
alternative. As stated in the preamble to the proposed rule and
elsewhere throughout this document, the rule is intended to prevent the
establishment and amplification of BSE in the United States through
feed. This alternative would restrict some, but not all, routes for the
BSE agent to enter ruminant feed. Consequently, FDA is not adopting
this alternative.
    e. The sheep-specified offal prohibition.
    The fifth alternative was to prohibit the feeding of specified
sheep and goat offal to ruminants. This alternative would eliminate
scrapie from ruminant feed, but would not prevent the spread of BSE
among cattle if BSE occurred spontaneously or entered the United States
(62 FR 552 at 568 and 569).
    (Comment 34). Very few comments addressed this alternative. Two
comments supported this alternative, stating that no TSE's have been
found in the United States or that this alternative would remove much
unsafe protein from ruminant feed.
    Three comments opposed this alternative. One comment stated that,
if BSE is already present in the United States, this alternative would
not prevent it from spreading to other cattle. Another comment
expressed similar views, but added that the long incubation period for
TSE's and the infectivity of tissues from preclinical or asymptomatic
animals increased the risk of BSE amplification. Another comment stated
that this alternative had limited effectiveness because it did not
protect against other known TSE's in other species.
    The agency agrees with those comments opposing this alternative.
Although it would remove scrapie from ruminant feed, this alternative
would be ineffective against BSE and other TSE's. As a result, FDA is
not adopting this alternative.
    f. The ``no action'' alternative.
    The sixth alternative was to take no action. The preamble to the
proposed rule explained that this alternative is arguably supported by
the fact that data and information do not document a recognized
immediate threat to the public health in the United States and that any
threat may be minimal. Other arguments supporting this alternative
included: (1) BSE has not been detected in the United States; (2)
surveillance efforts are in place and have not detected BSE; and (3)
there is no empirical evidence available to establish that BSE will be
transmitted to cattle from another species, will occur spontaneously in
cattle, or will be transmitted from imported animals or animal feed (62
FR 552 at 553). The preamble to the proposed rule further noted that:
There is no conclusive scientific evidence that BSE would be spread
through animal feed (although there is strong epidemiological evidence
suggesting that widespread BSE infections in the United Kingdom
occurred through contaminated animal feed and that enforced feed
control regulations appear to be the reason for BSE's decline in the
United Kingdom); the industrial practices in the United Kingdom
believed to be associated with the BSE epidemic in the United Kingdom
differ from those in the United States; transfer of TSE's from sheep to
cattle is suggested by epidemiological evidence, but has not been
confirmed by direct scientific data; and while there is an
epidemiological association between BSE and the nv-CJD cases in the
United Kingdom, the available evidence has not established that BSE
causes nv-CJD.
    Arguments against a ``no action'' alternative focused on the
potentially high cost, in animal and human lives and economics, if BSE
appeared in the United States and was transmitted and amplified through
the feeding of ruminant protein to cattle. The preamble to the proposed
rule noted that TSE transmission from other species, spontaneous
occurrence, and transmission from imported animals or animal products
was possible. Experimental evidence also indicated that the BSE agent
may be more susceptible to oral transmission (such as through animal
feed) than other TSE's, thereby increasing the chances that BSE could
spread through the United States whether or not the BSE agent developed
spontaneously, was transmitted by another species, or was introduced by
some other means. Yet the greatest risk factor identified in the
preamble to the proposed rule was the potential for unrecognized
amplification of the BSE agent given the long incubation period for BSE
and the absence of methods for detecting the agent (62 FR 552 at 555).
    (Comment 35). Very few comments expressly addressed the ``no
action'' alternative. One comment, without any explanation, supported
the no action alternative, while another comment claimed that the
proposed rule was essentially a ``no action'' alternative

[[Page 30945]]

because it would permit the use of tallow and fat in ruminant feed, and
the comment opposed the use of tallow. Six comments opposed this
alternative, declaring that the Federal Government must act to protect
animal and human health and food safety now, that TSE's are known to
exist in the United States, and that if TSE's exist in cattle, steps
need to be taken to prevent amplification. Other comments opposing a
``no action'' alternative claimed that an undiagnosed TSE may already
exist in the United States cattle population (arguing that TME may have
originated as an undiagnosed TSE in cattle that was transferred to mink
through contaminated feed), that this alternative would not protect
against asymptomatic animals infected with a TSE, and that this
alternative is not acceptable for purposes of international trade
(because other countries will reject U.S. products if they cannot be
assured that the products are not infected with BSE or a TSE).
    FDA agrees with the comments that oppose a ``no action''
alternative. The most appropriate course of action is to take steps to
prevent the establishment and amplification of BSE in the United States
through feed before BSE is manifested in the United States. FDA will,
as it does for all regulations, amend or modify its regulations to
reflect any advances in scientific or industry technology, but the
potential consequences to human and animal health are simply too great
to justify a ``no action'' alternative at this time.
5. Miscellaneous Alternatives Suggested by the Comments
    Many comments suggested other regulatory approaches, ranging from
more comprehensive prohibitions on the use of animal proteins in feed
to less restrictive alternatives that would focus solely on sheep or
cattle or certain types of cattle. Other comments suggested
alternatives to the nonGRAS status (e.g., issuing a compliance policy
guide (CPG), an interim food additive regulation, a GRAS listing with
restrictions, temporary ban to suspend the use of ruminant protein in
ruminant feed, and HACCP programs). The discussion of these
alternatives and the agency's response appears in section I.B.1.b of
this document, comments 56 through 60. Few comments offered any
detailed rationale or explanation supporting their alternatives.
    a. Alternatives involving ``downer'' animals.
    (Comment 36). FDA received hundreds of comments (in response to
write-in campaigns) requesting that ``downer'' (nonambulatory) animals
not be used for human food and not processed as ingredients in animal
feed. Few comments offered any detailed rationale (scientific or
otherwise) for their request, although some comments suggested that
downed animals may be unable to walk because they have a TSE agent or
suffer from some central nervous system (CNS) disease.
    FDA declines to revise the rule as suggested by the comments. The
final rule is limited to the use of proteins derived from mammalian
tissues in ruminant feed. The rule is intended to prevent the
establishment and amplification of BSE in the United States through
feed. Because BSE has never been detected in the United States, the
agency believes that the actions it has taken in this final rule will
accomplish this regulatory objective.
    FDA notes that issues involving downer animals actually have two
components: (1) Animals that are ``down'' and are condemned on
antemortem examination, such as those with clinical signs of CNS
disorders; and (2) animals that are ``down'' but which are passed as
``suspects'' pending post-mortem examination, such as those with broken
legs, mastitis, paralysis, etc. This final rule will prevent any downed
(including CNS-condemned) ruminants from being used in ruminant feed.
This final rule does not address issues related to nonruminant feed
uses. The agency does not have any information that such uses for
nonruminants at this time, present a risk of TSE infection to
ruminants. The use of carcasses of downer animals and the offal of
animals that are slaughtered as suspect for a CNS disorder in the
manufacture of meat and bone meal for use in swine, poultry, and pet
rations presents no known risk to humans. The risk to nonruminants
other than ruminants appears to be limited to felids and mink and is
considered to be extremely small.
    Additionally, revising the rule to prohibit the use of all downers
in nonruminant feeds would create significant environmental and
economic problems. Issues further related to use of meat and poultry
for human consumption are outside the scope of this rulemaking since
they are regulated by USDA.
    b. Alternatives covering other animals.
    (Comment 37). Several comments advocated more inclusive
alternatives, such as prohibiting the use of animals or mammals in
mammalian feed, prohibiting the use of animal byproducts in feed for
all animals or all farm animals, or prohibiting the use, in any
livestock feed, of any potentially infectious tissue from any species
known to have a TSE. Few explained their reasons for such alternatives
other than to declare that a broader alternative would be more
protective, to argue that noncarnivorous animals should eat only
plants, or to argue that the practice of feeding animal protein to
animals was ``cannibalism'' or ``unnatural.''
    In developing this rule, the agency sought to create regulatory
requirements that would prevent the establishment and amplification of
BSE in the United States through feed while simultaneously considering
the impact on the affected industries. The comments did not provide
sufficient information to determine that the alternatives suggested by
the comments would be equally or more effective in preventing the
establishment and amplification of BSE in the United States through
feed, and so FDA declines to revise the rule as suggested by the
comments.
    (Comment 38). Several comments advocated less restrictive
alternatives to the rule, such as prohibiting cattle-derived protein
from being fed to other cattle, or to sheep and cattle, or to other
animals, prohibiting the use of sick and dying animals in human and
animal food, or prohibiting the use of spinal cords and heads in animal
feed.
    FDA declines to revise the rule as suggested by the comments. These
less restrictive alternatives would not meet the agency's goals. The
comments did not offer any explanation as to how these alternatives
would prevent the establishment and amplification of BSE in the United
States through feed.
    c. Alternatives covering other subjects.
    (Comment 39). One comment requested that FDA revise the rule to
address all food hazards (rather than focus on BSE in ruminants),
prohibit the use of all meat protein supplements in all animal feed,
prohibit the use of antibiotics in food-producing animals, and
concentrate on possible causes of disease.
    The agency declines to revise the rule as requested by the comment.
The comment does not explain how the suggested change would prevent BSE
from being established and amplified in the United States through feed.
The comment's requests appear to address issues which are outside the
scope of this rulemaking.

B. Comments on Specific Sections in the Proposed Rule

1. Section 589.2000(a)--Definitions
    Proposed Sec. 589.2000(a) would define various terms, such as
``protein derived from ruminant and mink tissues,'' ``renderer,''
``blender,'' ``feed

[[Page 30946]]

manufacturer and distributor,'' and ``nonruminant protein.''
    All comments addressing proposed Sec. 589.2000(a) focused on the
terms ``protein derived from ruminant and mink tissues.'' Proposed
Sec. 589.2000(a)(1) would define such proteins as ``any protein-
containing portion of ruminant animals or mink, excluding blood from
bovines, milk proteins and gelatin.''
    As noted earlier in this document, the agency has revised
Sec. 589.2000(a)(1) to refer to protein derived from mammalian tissues
and has excluded specific items from that definition. In general, the
exclusions represent tissues that the available data suggests do not
transmit the TSE agent or were, at one time, inspected by FSIS and
found fit for human consumption and further heat processed for feed use
or tissues from species without TSE's that, under current industry
practice, are slaughtered in single species slaughter facilities.
Comments on specific tissues are as follows:
    (Comment 40). Several comments would exclude plate waste (food that
has been inspected, prepared, and/or served to humans) from the rule.
Some comments explained that all food products which compose plate
waste have already been cooked and inspected several times before being
offered for human consumption and later thrown away and that commercial
processors of plate waste dehydrate the product at temperatures
reaching 290 to 400  deg.F when converting it to an animal feed
ingredient. The comments also asserted that the plate waste comes from
institutions (universities, retirement homes, hospitals, prisons,
etc.), fast-food establishments, and large restaurants/cafeterias, and
does not consist of tissues that have demonstrated infectivity in
cattle, e.g., brain, spinal column, eye and distal ileum of cattle.
Furthermore, some comments stated that plate waste consists mostly
(approximately 98 percent) of nonmeat products and is high in moisture.
The high moisture content requires the addition of 50 to 60 percent
corn, soybeans, or similar products to aid in the dehydration and the
extrusion process. The comments also noted that the feeding of plate
waste remains a common practice in many parts of the United States and
around the world and that plate waste comprises approximately 8.9
percent of the Municipal Solid Waste stream in the United States.
    The draft codified provisions that appeared in the Federal Register
of April 17, 1997, included as an exclusion from the definition protein
derived from mammalian tissue, ``inspected and processed meat products
which have been cooked and offered for human consumption (plate waste
and used cellulosic food casings).'' The initial decision to exclude
plate waste was based on the fact that a small proportion of meat is
included in plate waste and that plate waste represents a small
proportion of ruminant feed. Additionally, the heat and pressure used
to process plate waste should further reduce the risk of transmitting
the TSE agent through feed in a product that is of minimal risk prior
to the processing as plate waste.
    Several comments addressed the reference to ``plate waste,'' and
the majority of the comments supported the exclusion of plate waste
from the definition of ``protein derived from mammalian tissues.''
However, many of these comments also sought a broader exemption by
expanding the rule to include ruminant meat which had passed Federal or
state inspection for human consumption. In contrast, one comment, from
the USDA/APHIS, opposed an exclusion for plate waste, stating that the
exclusion was too broad and could be interpreted to be similar to the
USDA definition for garbage at 9 CFR 166.9 and that trimmings (bone and
nervous tissue) from TSE-susceptible species might be included under
the exclusion.
    FDA agrees with the USDA/APHIS that the inclusion of trimmings or
high-risk tissue, such as brain and eyes, is inappropriate for use in
ruminant feed. FDA declines to expand the exclusion to include all
ruminant meat that has passed Federal or state inspection for human
consumption. FDA's approach to eliminating trimmings was to describe an
acceptable product as one which was ``cooked and offered for human
consumption.'' After further consideration FDA has revised the
definition of protein derived from mammalian tissues to exclude
``inspected meat products which have been cooked and offered for human
food and further heat processed for feed (plate waste and used
cellulosic food casings).'' This is to clarify that the high risk
tissues USDA/APHIS described in their comment are not covered by this
exclusion.
    FDA declines to expand the exclusion to include all ruminant meat
that has passed Federal or state inspection for human consumption
because this would require FDA to remove the safeguard against
trimmings and also would allow brains and eyes which have passed
inspection to be fed to ruminants.
    The agency acknowledges that accurately describing products which
are acceptable under this exclusion is difficult. In general, FDA
interprets this exclusion as being restricted to food prepared in
restaurants or restaurant-like establishments, offered to consumers for
consumption on the premises, and then discarded by the consumer.
Precooked food items, such as hot dogs, casings from cooked hot dogs,
and cooked deli items, would be excluded from regulation under this
rule by this exclusion. FDA has revised the definition to better
reflect its position that the product must be cooked, offered to the
consumer for human food, and then further heat processed before it can
be fed to animals.
    The Association of American Feed Control Officials, Inc. (AAFCO) is
in the process of developing definitions for products described in this
section. In general, the ``plate waste'' exclusion is similar to the
AAFCO definition of ``restaurant waste.''
    (Comment 41). A few comments questioned why meat and meat products
inspected by the USDA and found acceptable for human consumption are
not acceptable for ruminant consumption.
    The risks posed to humans and those posed to animals are different.
The significant steps advanced by this rule are supported by public
health experts as an effective means to decrease the risk of TSE's in
ruminants through feed and the potential risk to humans. To date, the
occurrence of nv-CJD in Europe has not been definitively linked to
human consumption of meat, and no cases of nv-CJD have been detected in
the United States.
    (Comment 42). One comment objected to the exclusion of gelatin and
blood from the definition of ``protein derived from ruminant and mink
tissues.'' The comment argued that gelatin and blood meal may be
infectious and that blood meal may not be used as a feed ingredient or
a fertilizer in the United Kingdom. The comment further noted that the
USDA prohibits the importation of ruminant protein and blood meal from
countries with documented BSE cases; the comment stated that if the
USDA prohibits such imports because they may be infective, then FDA
should not permit the use of domestic gelatin and blood meal.
    The agency disagrees with the comment. As the agency discussed in
the preamble to the proposed rule (62 FR 552 at 572) available data
suggests that gelatin and blood do not transmit the TSE agent and USDA
surveillance has not detected BSE in the United States. However, to
minimize the risk of infected material being imported into

[[Page 30947]]

the United States, USDA has prohibited the importation of such
products.
    (Comment 43). Several comments addressed the reduction in TSE titer
that results from the process that is used to make gelatin. Two
comments added that dicalcium phosphate, which is derived from the
gelatin manufacturing process, should be excluded from the rule; one
described the processes for obtaining dicalcium phosphate. Another
comment sought clarification whether amino acids derived from gelatin
would be exempt from the rule.
    Amino acids and dicalcium phosphate are excluded from the final
rule because both products are by-products or the result of further
processing of gelatin and do not contain proteins. Dicalcium phosphate
is an inorganic mineral source that does not contain protein, and
individual amino acids are not proteins. (Instead, proteins consist of
amino acids.) Although the codified provision to the draft rule that
was published in the Federal Register of April 17, 1997, expressly
exempted amino acids and dicalcium phosphate derived from gelatin, and
one comment sought to revise that language regarding dicalcium
phosphate, the agency has reconsidered the need for this express
language and decided that, because amino acids and dicalcium phosphate
are not proteins, the express language is unnecessary.
    (Comment 44). Several comments requested that FDA revise the rule
to exclude pure porcine (swine) products. These comments argued that
swine are not known to have TSE's and are often slaughtered in
dedicated swine slaughter facilities so that pure porcine products can
be easily separated from other mammalian products.
    Other comments, submitted after the publication of the draft
codified provisions in the Federal Register of April 17, 1997,
suggested that FDA revise the rule to exclude pure equine products.
FSIS commented that the rationale for the change from a ruminant-to-
mink prohibition in the proposed rule to a mammalian prohibition, with
porcine exclusion, is insufficiently supported by scientific fact and
suggested that FDA consider an alternative to the draft final.
    The agency agrees with the comments and has excluded products whose
only mammalian protein consists entirely of porcine or equine protein
from the definition of ``protein derived from mammalian tissues.'' This
exclusion is scientifically defensible because swine and horses have
not been shown or reported to have a condition that can be linked to a
TSE and can be accomplished within the current industry structure and
practice. Because most swine and horses are slaughtered in dedicated
facilities, and the ease of verifying compliance at the source, FDA has
excluded products containing pure porcine or pure equine protein from
the rule and, where appropriate, revised other provisions in the final
rule to reflect an exclusion for pure porcine or equine protein. FSIS
is in agreement with these changes.
    (Comment 45). A few comments asked the agency to provide a
mechanism for exempting animals from flocks or herds that are
designated by a Federal agency to be absent from TSE's, such as the
USDA's Voluntary Scrapie Flock Certification Program.
    The agency supports any initiative such as this which is designed
to reduce or eliminate a naturally occurring TSE. However, there
appears to be little assurance that the proteins derived from these
flocks or herds could be kept separate as pure single-species proteins,
and therefore, FDA declines to revise the rule as suggested by the
comments.
    (Comment 46). Proposed Sec. 589.2000(a)(2) would define
``renderer,'' in part, as ``any firm or individual that processes
slaughter byproducts, animals unfit for human consumption, meat scraps
or food waste.''
    The agency has removed ``food waste'' from the definition. This
change is necessary because, as explained above, the agency has
excluded plate waste from the definition of ``protein derived from
mammalian tissues.'' The agency does note, however, that it interprets
the term ``animals unfit for human consumption'' as including parts of
animals that are unfit for human consumption.
    (Comment 47). Proposed Sec. 589.2000(a)(3) would define the term
``blender.''
    The agency received no comments on this definition and has
finalized it without change.
    (Comment 48). Proposed Sec. 589.2000(a)(4) would define ``feed
manufacturer and distributor'' as including manufacturers and
distributors of complete and intermediate feeds intended for animals,
including on-farm and off-farm feed manufacturing and mixing
operations.
    FDA has revised the definition to separate ``feed manufacturer''
from ``distributor.'' The agency made this change to clarify that both
feed manufacturers and distributors are subject to the rule rather than
persons who perform both functions (manufacturing and distributing).
Thus, Sec. 589.2000(a)(4) defines ``feed manufacturer'' as including
manufacturers of complete and intermediate feeds intended for animals
and including on-farm in addition to off-farm feed manufacturing and
mixing operations. Section 589.2000(a)(6) defines ``distributor'' as
including persons who distribute or transport feeds or feed ingredients
intended for animals. The substance of these definitions are similar to
the definition in the draft codified provisions that appeared in the
Federal Register of April 17, 1997. The agency has also made
corresponding changes throughout the rule to clarify that feed
manufacturers are distinct from distributors and deleted the reference
to ``haulers'' from proposed Sec. 589.2000(e) because the definition of
``distributor'' includes persons who transport feed and feed
ingredients.
    (Comment 49). Proposed Sec. 589.2000(a)(5) would define
``nonruminant protein'' as including protein from nonruminant animals
and vegetable sources.
    The agency has revised Sec. 589.2000(a)(5) to define ``nonmammalian
protein'' as including protein from nonmammalian animals and vegetable
sources. This corresponds to the final rule's change to a mammalian-to-
ruminant prohibition.
    (Comment 50). As stated earlier, FDA has revised the rule to create
a new Sec. 589.2000(a)(6) to define ``distributor.'' While the codified
provisions of the draft rule that appeared in the Federal Register of
April 17, 1997, initially defined ``distributor'' as including
distributors of complete and intermediate feeds intended for animals,
FDA, on its own initiative, has revised the definition further to
clarify that persons who transport feed or feed ingredients intended
for animals are distributors.
    (Comment 51). The agency has also revised the rule to create a new
Sec. 589.2000(a)(7) to define ``ruminant'' as including ``any member of
the order of animals which has a stomach with four chambers (rumen,
reticulum, omasum, and abomasum) through which feed passes in
digestion. The order includes, but is not limited to, cattle, buffalo,
sheep, goats, deer, elk, and antelopes.'' FDA elected to define the
word ``ruminant'' because several comments noted that some people might
not know what animals are ``ruminants.''
2. Section 589.2000(b)--Food Additive Status
    Proposed Sec. 589.2000(b) would state that protein derived from
ruminant and mink tissues is not generally recognized as safe for use
in ruminant feed because it may contain TSE's and is a food

[[Page 30948]]

additive subject to section 409 of the act (21 U.S.C. 348). Thus, under
the proposed rule, the use or intended use of any ruminant or mink-
derived protein in ruminant feed would cause the feed to be adulterated
and in violation of the act (unless it was the subject of an effective
notice of claimed investigational exemption for a food additive or was
the subject of a food additive regulation). Proposed Sec. 589.2000(b)
would also state that FDA has determined that ruminant and mink-derived
protein is not prior sanctioned for use in ruminant feeds.
    a. NonGRAS status.
    At the outset, FDA notes that no comments provided FDA with any
published studies, data, or other information or expert opinions upon
which FDA could conclude that the material is safe or that there is a
reasonable certainty that the material is not harmful under the
intended conditions of use. FDA received no scientifically valid
information, or expert opinion based on that information, that
addressed: (1) Whether it is reasonably certain that BSE does not, or
will not, occur in the United States; (2) whether the BSE agent can be
detected; (3) whether it is reasonably certain that the BSE agent will
not be transmitted to ruminants through animal feed, i.e., that the
processed tissues are not infected by the agent, are deactivated by the
rendering process or are not transmitted orally; or (4) whether it is
reasonably certain that the agent will not be transmitted to humans
through consumption of ruminant products. As discussed extensively in
the preamble to the proposed rule (see 62 FR 552 at 553 and 564) and
herein, these significant safety questions have been raised by credible
currently available information about the transmission of BSE and TSE's
to ruminants through feed. As a result of these questions, as provided
in this final rule, FDA has determined that protein derived from
mammalian tissues in ruminant feed is not GRAS.
    (Comment 52). Many comments stated that ruminant protein had been
safely used as components of animal feed for 100 years as well as
before the enactment of the Food Additive Amendments of 1958. These
comments seemed to assert that ruminant protein for use in ruminant
feed is GRAS based on common use in food prior to 1958, and based on
this history of safe use, FDA cannot now declare it to be a food
additive.
    FDA disagrees. As noted in the preamble to the proposed rule, if a
substance was used in food before 1958, general recognition that the
use of a feed ingredient is safe can be based on scientific procedures
or experience based on common use in food (see 62 FR 552 at 566;
section 201(s) of the act (21 U.S.C. 321(s)); and 21 CFR 570.30(a)).
General recognition of safety through experience based on common use in
food prior to January 1, 1958, may be determined without the quantity
or quality of scientific procedures required for approval of a food
additive regulation, but it nonetheless requires a demonstration of:
(1) Safe use based on common use, and (2) an expert consensus of
safety, based on that common use (see 21 CFR 570.30). The simple
assertion of this safe use thus does not satisfy the burden the
proponents of the use bear to establish general recognition. Although
FDA agrees that, until recently, this material appears to have had a
long history of use without known adverse effects (see 62 FR 552 at
566), FDA has never affirmatively declared the material to be GRAS
based on common use in food.
    Moreover, even if a substance is GRAS based on common use in food
or GRAS based on scientific procedures, FDA may reassess the GRAS
status of a food ingredient based on new information (see 21 CFR
530.30(g); see also, e.g., 51 FR 25021, July 9, 1986 (Sulfiting Agents;
Revocation of GRAS Status for Use on Fruits and Vegetables to be Served
or Sold Raw to Consumers)). Thus, even if ruminant protein for use in
ruminant feed were GRAS based on common use in feed prior to 1958, that
does not preclude FDA from reassessing it now that there exist new
studies, data, or other information that show that the substance is, or
may be, no longer safe (this is true whether the studies or data are
published or unpublished (see 50 FR 27294 at 27296 (July 2, 1985))) or
that there is no longer the basis for an expert consensus that it is
safe.
    Expert opinion that the substance for use in ruminant feed is GRAS
would need to be supported by scientific literature, and other sources
of data and information. ``General recognition'' cannot be based on an
absence of studies that demonstrate that a substance is unsafe; there
must be studies or other information to establish that the substance is
safe (see U.S. v. An Article of Food * * * Coco Rico, 752 F.2d 11 (1st
Cir. 1985)). Furthermore, if there are studies and other data or
information that raise questions about the safety of the use of the
material, this conflict--just like a conflict in expert opinion--may
prevent general recognition of the substance.
    As the agency explained in the preamble to the proposed rule,
research and other information have raised questions regarding the safe
use of protein derived from certain animal tissue in ruminant feeds.
The agency stated that ``the evidence as discussed in sections I and
II.A through II.D of this document, for the development of a new
pattern of disease transmission, now indicates that these ingredients
can no longer be categorically regarded as safe'' (see 62 FR 552 at
566).
    Because the expert opinion must be ``general,'' a substance is not
GRAS if there is no recognition among experts, or there is a genuine
dispute among the experts, as to whether it is safe. Although there
need not be unanimity among qualified experts that a substance is safe
for ``general recognition'' of its safety to exist, an ``expert
consensus'' is required (see Weinberger v. Hynson, Wescott & Dunning,
Inc., 412 U.S. 606, 632 (1073)).
    Accordingly, there must be no genuine difference of opinion among
qualified experts as to the substance's safety (see Coco Rico, 752 F.2d
at 15 n.6; United States v. Articles of Drug * * * 5,906 Boxes, 745
F.2d 105, 119 n.22 (1st Cir. 1984)). As the Court of Appeals for the
Second Circuit explained in Premo Pharmaceutical Laboratories, Inc. v.
United States, 629 F.2d 795, 803 (2d Cir. 1980), when there is a
dispute among experts as to ``general recognition,''

    The * * * issue (of actual safety) is to be determined by the
FDA which, as distinguished from a court, possesses superior
expertise, usually of a complex scientific nature, for resolving
that issue.

See also 5,906 Boxes, 745 F.2d at 119 n.22; United States v. 50 Boxes *
* * Cafergot P-B Suppositories, 721 F.Supp. 1462, 1465 (D. Mass. 1989),
aff'd, 909 F.2d 24 (1st Cir. 1990); An Article of Drug * * * Furestrol
Vaginal Suppositories, 251 F.Supp. 1307 (N.D. Ga. 1968), aff'd, 415
F.2d 390 (5th Cir. 1969).
    The World Health Organization (WHO), in an April 1996 consultation
on public health issues related to TSE, recommended that all countries
ban the use of ruminant tissues in ruminant feed. This recommendation
was intended to minimize the risk associated with exposure to BSE from
beef and beef products. The background for WHO recommendation pointed
out that the BSE epidemic in the United Kingdom appeared to have been
due mainly to the recycling of infected bovine material back to cattle.
    In response to the agency's request in the preamble to the proposed
rule for comments on a ruminant-to-ruminant prohibition as well as
other alternatives including a full mammalian to ruminant

[[Page 30949]]

ban, no one submitted or cited published studies to support the
contention that the use of protein derived from ruminant tissue or from
mammalian tissue in ruminant feed is GRAS. Furthermore, no comments
refuted the agency's basis for determining protein derived from
ruminant tissue for use in ruminant feed to be nonGRAS as set out in
the preamble to the proposed rule. In addition, no one submitted or
cited published studies to support a finding that the use of mammalian
tissue in ruminant feed is GRAS either in response to the request for
comments on the alternative set out in the preamble to the proposed
rule or the request for comments on the draft rule, which included the
mammalian (with certain exclusions) to ruminant ban. FDA believes that
the same research and information set out in the proposed rule and the
industry practice of commingling mammalian, including ruminant and
mink, tissues, demonstrate that the use of protein derived from
mammalian tissues can no longer be categorically regarded as safe.
Therefore, this final rule provides that such protein for use in
ruminant feed is a food additive subject to section 409 of the act.
    (Comment 53). Numerous comments appeared to argue that the agency
could not promulgate a rule declaring ruminant protein to be a food
additive when intended for ruminant feed because there is no BSE in the
United States.
    Because these comments did not provide any legal or scientific
explanation to support this argument, it is unclear to FDA whether they
are arguing: (1) That FDA cannot rely on new information from foreign
sources to reassess the GRAS status of a food ingredient, or (2) that
FDA cannot take action until BSE actually occurs on United States soil.
Whichever argument is meant, FDA disagrees. First, the act does not
require evidence of actual harm to exist before a substance can be
declared to be not GRAS by FDA; all that is required is information--
which exists here--that the use of certain protein in ruminant feed may
not be safe or that there is no expert consensus that the use of the
substance is safe.
    In addition, in response to comments that point out that there is
no evidence of BSE in the United States, FDA notes that nothing in the
act would support a blanket conclusion that FDA should only rely on
data generated or conditions present in the United States when making
this reassessment. Indeed, since, under the act, FDA must take into
account relevant evidence of foreign use when assessing a claim that a
food ingredient is GRAS based on common use in food prior to 1958 (see
Fmali Herb, Inc. v. Heckler, 715 F.2d 1385 (9th Cir. 1985)), FDA
believes it should likewise take relevant foreign data and expertise
into account when reassessing safety and general recognition. Here,
while there have been no reported cases of BSE in the United States,
other conditions exist that make the foreign experience relevant, such
as the fact that, in the United Kingdom, BSE was spread by the practice
of feeding ingredients from processed BSE-infected cattle to other
cattle, and the processes that were used failed to inactivate the BSE
agent.
    Moreover, the act as a whole and the 1958 Food Additives Amendment
in particular were intended to give FDA the tools to prevent harm to
the public health before it occurs (see, e.g., United States v. Ewig
Bros Co., 502 F.2d 715, 721 & n.24 (7th Cir. 1974), cert. denied, 420
U.S. 945 (1975); see also S. Rep. No. 2422, 85th Cong., 2d Sess. 1-3
(1958); H.R. Rep. No. 2284, 85th Cong., 2d Sess. 1 (1958)). As a result
of the 1958 amendment, the burden of proof shifted to manufacturers,
and the 1958 amendment ``permit(s) FDA to regulate the use of
substances affecting foods without first determining that they are in
fact dangerous; the method is to require that such substances be
established as safe before being used'' (see Natick Paperboard Corp. v.
Weinberger, 525 F.2d 1103, 1106 (1st Cir. 1975), cert. denied, 429 U.S.
819 (1976); see also Ewig Bros., 502 F.2d at 721).
    Thus, to claim that FDA cannot declare a substance to be a food
additive until it has actually done damage in the United States and FDA
can prove that actual harm has occurred would eviscerate the act. It
would be contrary to the public health if FDA could not use this
authority--based data and other relevant information from other
countries--to prevent harm from occurring through the use of certain
ingredients in feed.
    FDA notes that section 801 of the act (21 U.S.C. 381), which gives
the agency the authority to prevent the import into the United States
of food that violate the act unless such items are intended for export
rather than domestic distribution, underscores the weakness of the
comments' arguments. If the act did not allow FDA to consider
conditions that exist in, or evidence from, other countries when
determining whether an article violates the provisions of the act, FDA
would not be able to implement section 801 of the act and keep
violative food from entering the country. Furthermore, if the comments'
interpretation of the act is correct--that FDA can only look at
conditions in this country--then FDA would not be able to declare
animal protein from other countries to be an unsafe food additive, even
if there had been cases of BSE reported in the country in which the
animal protein originated.
    (Comment 54). Several comments argued that more research is needed
before FDA can take action and that the agency must establish that all
feed components affected by this rulemaking may transmit TSE's.
    These comments misunderstand the structure of the food safety
provisions of the act. As noted above and in the preamble to the
proposed rule (62 FR 552 at 566), the act places the burden to
establish safety of a feed component on the proponent of the substance,
not on the government to prove actual harm. Research of the type
suggested by the comments could take years to complete. The agency
believes that it is neither required nor appropriate to delay
regulatory action to prevent transmission of BSE pending the completion
of research.
    The information presented in the preamble to the proposed rule set
out the basis for the agency's nonGRAS determination for the use of
protein derived from ruminant and mink tissue in ruminant feed. As
discussed earlier in this preamble to the final rule, after evaluating
the issues and information presented in the comments on the proposal
and all other evidence, the agency has determined that a consensus does
not exist that the use of protein derived from mammalian tissues is
safe for use in ruminant feed. The agency finds that the potential
remains for ruminants to be exposed to TSE agents in ruminant feed.
When a ruminant is fed protein derived from mammalian tissues, TSE's
may be transmitted. Therefore, FDA concludes that the use of protein
derived from mammalian tissues in ruminant feed can no longer be
considered GRAS.
    (Comment 55). The draft rule that appeared in the Federal Register
of April 17, 1997, revised Sec. 589.2000(b) to eliminate unnecessary
phrases that were included in proposed Sec. 589.2000(b). These phrases
were statements referring to FDA's determination that these proteins
are nonGRAS, the absence of a regulation providing for safe use, and
FDA's determination that these proteins are not prior sanctioned for
use in ruminant feeds. A small number of comments questioned why the
language was removed (because it did not alter the fact that proteins
derived from

[[Page 30950]]

mammalian tissues for use in ruminant feed are food additives subject
to section 409 of the act), and one comment asked FDA to restore the
nonGRAS language.
    FDA eliminated the text described above from Sec. 589.2000(b)
because the language was unnecessary. These revisions are solely
editorial in nature and do not affect the substance of the agency's
rulemaking or its determination that protein derived from mammalian
tissues is not GRAS for use in ruminant feed and is not prior
sanctioned for use in ruminant feeds.
    b. Alternatives to nonGRAS status and other legal comments.
    Several comments advocated alternatives to declaring proteins
derived from ruminant tissues to be nonGRAS.
    (Comment 56). Several comments suggested that FDA refrain from
issuing the rule and instead issue a CPG. Some comments stated that a
CPG could be used to determine that certain proteins are adulterants
when added to ruminant feed and that use of a CPG would meet FDA's goal
of increasing prevention of BSE. Some comments stated that a CPG would
prevent the loss of GRAS status for the protein products and claimed
that this loss will have serious ramifications, such as stigmatizing
the protein products, as well as affecting the companies' ability to
compete in the global market. One comment advocated the use of a CPG
because it would allow the agency additional time to do a reasoned
analysis of the scientific information before taking a final action.
Some comments stated that use of a CPG would allow the agency to
respond more quickly to scientific and technical changes than the use
of notice and comment rulemaking.
    FDA disagrees with these comments. Contrary to the arguments
presented in the comments, FDA cannot use CPG's to impose any
requirement. CPG's are guidance documents issued by the agency. These
documents are not binding on the agency or any person. As the agency
explained in its ``Good Guidance Practice'' document published in the
Federal Register of February 27, 1997 (62 FR 8961), guidance documents
``represent the agency's current thinking on (a) subject'' and ``do not
themselves establish legally enforceable rights or responsibilities and
are not legally binding on the public or the agency.'' To issue a
binding prohibition, the agency must follow an appropriate rulemaking
procedure (see Community Nutrition Institute v. Young, 818 F.2d 943
(D.C. Cir. 1987)). Therefore, if the agency issues a CPG, it would not
be binding and, as such, would be an ineffective means of banning the
use of protein derived from certain tissues in ruminant feed.
Furthermore, a CPG that states that certain proteins used in ruminant
feed are adulterants under the act would require the agency, on a case-
by-case basis, to bring enforcement actions for violations of section
402(a)(1) or section 402(a)(2)(C) of the act. Again, the agency does
not believe this is an effective approach to preventing the
establishment and amplification of BSE through feed. The agency
believes it has made a reasoned analysis of the scientific information
available and based on this analysis, the agency is taking the approach
set out in this final rule.
    (Comment 57). Several comments urged FDA to use an interim food
additive regulation rather than declare certain proteins for use in
ruminant feed are not GRAS. These comments explained that an interim
food additive regulation would prevent their products from being
stigmatized by a not GRAS determination. These comments also explained
that the interim food additive regulation would keep the administrative
record open to new evidence, permit FDA and the industry to react to
new research findings, and permit FDA to require the industry to
conduct planned research. Some comments cited the regulations in part
180 (21 CFR part 180) and the interim selenium rule as precedent for
FDA issuing an interim food additive regulation.
    FDA disagrees with these comments. The regulations in part 180,
issued under section 409 of the act, apply to ``substances having a
history of use in food for human consumption or in food contact
surfaces'' (see Sec. 180.1(a)). The definition of ``food'' for the
subchapter (which includes part 180) includes ``human food, substances
migrating to food from food-contact articles, pet food, and animal
feed'' (see 21 CFR 170.3(m)). The language of Sec. 180.1, however, only
refers to human food and substances migrating to food from food contact
surfaces. The limiting language in Sec. 180.1 makes it clear that it
does not apply to pet food or animal feed. The agency recognizes that
Sec. 570.38(c)(2) (21 CFR 570.38(e)(2)), applicable to animal feeds,
provides that an interim food additive regulation may be issued. This
provision was carried over when the rules at part 121 (21 CFR part 121
(1976)), which addressed both human food and animal feed additives,
were reorganized to separate the human food and animal feed provisions.
Section 121.41 of FDA's regulations, which included the reference to
interim food additive regulations, was republished as Sec. 570.38. The
provisions governing promulgation of interim food additive regulations
at Sec. 121.4000 (now Sec. 180.1) were not republished in part 570 (21
CFR part 570) governing animal feed (41 FR 38618, September 10, 1976).
A decision to extend the use of interim food additive regulations to
animal feeds and the creation of a procedure for doing so would likely
require rulemaking under the Administrative Procedure Act (5 U.S.C. 501
et seq.)
    Furthermore, even if this procedure were available to the agency
here, it would not prevent the stigma that the comments state is
created by the agency's determination that protein derived from certain
tissues for use in ruminant feed is not GRAS since the same
determination must be made to issue an interim food additive regulation
(see, e.g., 61 FR 7990 March 1, 1996) (interim food additive for
mannitol). Any determination by the agency that a substance is a food
additive is also a determination that the substance is not GRAS. This
is true regardless of whether the agency takes an action as in this
final rule or the agency issues an interim food additive regulation.
    With regard to the interim rule on selenium cited by some comments
as an interim food additive regulation, the agency disagrees that the
interim rule on selenium is an interim food additive regulation like
those for human food issued under part 180. The selenium regulation at
21 CFR 573.920 was initially based on an approved food additive
petition submitted under section 409 of the act. The interim final rule
on selenium that appeared in the Federal Register of October 17, 1995
(60 FR 53702) was issued as an interim rule under the Administrative
Procedure Act (5 U.S.C. 501 et seq.), not as an interim food additive
regulation under section 409 of the act. The interim selenium rule
implements Pub. L. 103-354 regarding the allowable levels of selenium
in certain animal feeds. The rule is designated as an interim rule
because it was issued under an exception in the Administrative
Procedure Act (5 U.S.C. 553(b)(B)). This exception allows a final rule
to be issued without prior notice and public comment if use of the
procedures is impracticable, unnecessary, or contrary to the public
interest. As stated in the preamble to the selenium rule, the agency
determined that prior notice and public comment was unnecessary because
the rule merely repeated the terms of Pub. L. 103-354 (see 60 FR 53702
and 53703). As stated above, an interim food additive regulation would
be issued under section 409 of the act. Therefore, the interim selenium
rule is

[[Page 30951]]

not precedent for the agency to issue an interim food additive
regulation in this case.
    (Comment 58). One comment stated that, instead of publishing a
regulation under part 589 (21 CFR part 589) which lists substances
prohibited in animal feed, the agency should do a GRAS listing with
restrictions similar to the action taken in the propylene glycol rule
that was published in the Federal Register of May 10, 1995 (60 FR
24808). The comment asserted that the GRAS listing (which is referred
to as a ``GRAS affirmation'') would reduce the possible taint from
listing the protein in part 589 as a prohibited substance. The comment
explained that the GRAS listing could limit the animal feed that could
contain the protein as it is listed in the proposed rule and include an
exemption for use of approved deactivation and detection methods. The
comment stated that the preamble to the rule should state the agency's
view that all uses excepted from GRAS status must be subject to a food
additive provision.
    FDA does not agree with this comment. The action on propylene
glycol that the comment cites was a proposed rule that would exclude
from GRAS status propylene glycol used in or on cat food. The final
rule was published in the Federal Register of May 2, 1996 (61 FR
19542). The proposed rule cited by the comment, as well as the final
rule, included two provisions. One provision amended Sec. 582.1666 (21
CFR 582.1666), which sets out the GRAS status of propylene glycol, to
except its use in cat food. The second provision was a new
Sec. 589.1001 which lists propylene glycol in or on cat food as a
substance prohibited from use in animal food or feed. In this case, no
regulation exists that sets out a FDA determination of GRAS for protein
derived from certain tissues for use in animal feed. Therefore, there
is no GRAS regulation to amend as in the case with propylene glycol.
Furthermore, this final rule, like the propylene glycol regulation,
will list the substances as prohibited from use in animal feed in part
589.
    The current regulations at Secs. 570.30 and 570.35 (21 CFR 570.30
and 570.35) describe the information necessary to determine a substance
as GRAS or to affirm GRAS status. The comment did not include or cite
any information that would provide a basis for the agency to determine
that the other feed uses of protein derived from certain tissues is
GRAS or to affirm it as GRAS. FDA notes, however, that the act does not
preclude manufacturers from making their own decisions on the GRAS
status of uses not covered by this final rule. If FDA disagrees with
this self-determination, FDA may take action, as it has done in this
final rule or by enforcement action, to end that self-determined GRAS
status (see FDA's proposed rule, Substances Generally Recognized as
Safe, published on April 17, 1997 (62 FR 18938), for proposed revisions
to the GRAS affirmation process.
    (Comment 59). Several comments suggested that FDA adopt a
``temporary ban'' or a ``temporary moratorium'' to suspend the use of
the ruminant protein in ruminant feed. The comments claimed that such
temporary measures, unlike a formal rule, would be quickly modified or
rescinded based on new information. The comments also stated that FDA
should consider other alternative, yet effective, approaches and that
FDA has the ability to use other available regulatory options.
    The agency declines to adopt the comments' suggestions. The
comments did not indicate what legal authority FDA should use or how
``temporary'' a ban or moratorium should be. While the agency has
several authorities related to the regulation of animal feed, they are
not applicable or would not be the most effective means of
accomplishing the rule's goals. The agency believes that the approach
used in this final rule is the most effective approach to accomplish
the agency's objective of preventing the establishment and
amplification of BSE in the United States through feed.
    As stated in a response to an earlier comment, the agency could
bring adulteration charges under section 402(a)(1) of the act (21
U.S.C. 342(a)(1)) or section 402(a)(2)(C) on a case-by-case basis. The
agency does not believe this is a viable, efficient solution to
preventing BSE because it would require FDA to prove, on a case-by-case
basis, that mammalian protein is not GRAS when intended for use in
ruminant feed. In addition, the burden of proof would be on the agency
in such enforcement actions.
    Under section 404 of the act (21 U.S.C. 344), the agency may issue
regulations providing for the issuance of permits governing the
manufacture, processing, or packaging of any class of food which the
agency has found may be injurious to health due to contamination with
micro-organism during such manufacture, processing, or packing.
However, in this case, the agency may be unable to determine adequately
whether a food may be injurious after the food has entered interstate
commerce. The lack of information required to establish necessary
conditions, coupled with the fact that the incubation period for BSE
may range from 2 to 8 years, effectively precludes use of section 404
of the act.
    Section 406 of the act (21 U.S.C. 346) authorizes the agency to set
tolerances for food additives that are required for the production of a
food or cannot be avoided by good manufacturing practice. However, in
this case, section 406 of the act is inapplicable because protein
derived from certain tissues is not required to produce ruminant feed
nor is the protein an unavoidable contaminant. Even if section 406 of
the act were applicable, FDA does not have sufficient information to
set a tolerance because the quantity of the BSE agent necessary to
product infection is currently unknown.
    Finally, the agency has the authority to make and enforce
regulations to prevent the spread of communicable diseases under
section 361 of the Public Health Service Act (42 U.S.C. 264). This
authority is available to the agency to address issues related to
TSE's. FDA, however, has determined that, at this time, use of its
authority under the food additive provisions of the act is appropriate.
    (Comment 60). Comments from several individuals and organizations
strongly opposed the agency's proposal to declare certain animal-
derived feedstuffs as nonGRAS. As an alternative, the comments
suggested that adequate methods could be instituted which would reduce
to an acceptable level the risk that these feeds could transmit TSE's
to ruminants. Such methods included, inter alia, eliminating high risk
sources of raw materials (e.g., downer animals, specified ovine
tissues) from processing into feedstuffs intended for ruminant rations,
processing (rendering) conditions specifically designed to reduce the
infectivity of the raw materials if TSE agents were present in such
materials, and adequate clean-out, transport, and storage practices
which would minimize the risk from carryover or contamination of feeds
or feedstuffs with potentially infective materials.
    Many comments, including some from the industries directly affected
by this rule, suggested that the agency issue regulations to require
risk reduction processes. These comments suggested that regulatory
oversight would be facilitated through GMP's, HACCP programs, or
similar instruments, and commercial firms determined by the agency to
be in compliance with such regulations would be permitted to label
feedstuffs produced under those conditions as ``Certified Ruminant
Derived Protein.'' Feed bearing such labeling would be permitted for
use in

[[Page 30952]]

all animal feed, including ruminant feed. One comment even provided a
detailed example of an HACCP program applicable to rendering
facilities, including a quantitative risk analysis specifying the
reduction in BSE infectivity at each critical control point. A comment
from the rendering trade association provided a detailed generic HACCP
plan which could be adapted by individual rendering establishments to
their specific operation. This comment also contained proposed codified
language for implementing HACCP. Several other comments provided
examples of practices intended to prevent high risk animals from
entering rendering channels.
    In the preamble to the proposed rule, the agency agreed that the
need for mandatory HACCP, supported by GMP's for animal-derived
proteins, could be considered in future rulemaking (62 FR 552 at 567).
The agency continues to encourage the voluntary adoption of HACCP on a
plant-by-plant basis in both the rendering and feed industries. To the
extent that HACCP is adopted, FDA will be able to examine whether safe
conditions of use for some or all of the prohibited protein in ruminant
feed, using an HACCP plan, can be established under a food additive
regulation or whether such uses using an HACCP plan are GRAS. However,
a regulatory action to make HACCP mandatory for all manufacturers in
these industries is outside the scope of this final rule.
    The agency agrees, in concept, that procedures which inactivate TSE
agents in feedstuffs or methods that detect the presence of TSE agents
in feedstuffs could form the basis for determining whether HACCP, GMP,
or similar process validation programs were sufficient to ensure that
TSE's could not be transmitted to ruminants through consumption of
feedstuffs produced under those programs. Additionally, under the final
rule, renderers are exempt from labeling and certain recordkeeping
requirements under this rule if they use routinely a test method that
FDA has validated to detect the presence of the agent that causes TSE's
and whose design has been made available to the public; or use
exclusively a method for controlling the manufacturing process that
minimizes the risk of the TSE entering the product and whose design has
been made available to the public and validated by FDA.
    Presently, the agency has not validated any methods to detect the
TSE agent or any methods for controlling the manufacturing process that
would minimize the risk of the TSE agent entering the product. Although
some comments argued that rendering systems used widely in the United
States have been shown by European researchers to inactivate BSE under
specific parameters, such that products produced using these rendering
systems should be exempted from the rule, it should be noted that
mammalian meat and bone meal produced under the European system is not
permitted to be fed to ruminants in the European Union (Ref. 11).
    The agency believes that the information provided is insufficient
to validate specific rendering processes. Although these rendering
processes appear to reduce the infectivity of materials in the mouse
model, the infective dose of a TSE agent remains unknown. The assay
method used to measure reduction of infectivity has been questioned as
to whether it is the appropriate assay for determining the infectivity
of tissues under natural conditions. When the mouse bioassay has been
used, there remain questions whether the test materials (tissues from
BSE-infected cattle) contained sufficient titres of the TSE agent to
ensure that materials produced under these rendering systems will not
transmit TSE's to ruminants (see comment 41 of this document and the
agency response). When sufficient data are available for the agency to
validate a process for inactivating TSE agents in processed feedstuffs,
a method for controlling the manufacturing process, or a test for
detecting the TSE agent in feed, FDA will be able to examine whether
safe conditions of use for mammalian protein in ruminant feed, using
such validated processes or tests, can be established under a food
additive regulation or whether such uses using the validated process or
test are GRAS.
3. Section 589.2000(c)--Requirements for Renderers That Are Not
Included in Paragraph (e) of This Section
    Proposed Sec. 589.2000(c) would set forth the requirements for most
renderers. Proposed Sec. 589.2000(c)(1)(i) would require renderers
whose products contain or may contain protein derived from ruminant and
mink tissues and intended for use in animal feed to label the materials
as follows: Contains (or may contain) protein derived from ruminant and
mink tissues. Do not feed to ruminant animals, and do not use to
manufacture feed intended for ruminant animals. Proposed
Sec. 589.2000(c)(1)(ii) would require renderers to maintain copies of
sales invoices and to make them available to FDA for inspection and
copying. Proposed Sec. 589.2000(c)(2) would exempt renderers from the
labeling and recordkeeping requirements if they use exclusively a
manufacturing method that FDA has validated to deactivate the TSE agent
and make that method available to the public or routinely use a test
method, also validated by FDA, for detecting the TSE agent, under
proposed Sec. 589.2000(c)(2)(ii), would be labeled ``Not for Use in
Animal Feed,'' and records of test results would be made available for
FDA inspection. Proposed Sec. 589.2000(c)(3) would exempt renderers
from recordkeeping requirements if they use a permanent method,
approved by FDA, to mark the presence of protein derived from ruminant
and mink tissues. If the marking method could not be seen on visual
inspection, the proposed rule would require the method to be validated
by FDA and made available to the public.
    a. Cautionary statement.
    Several comments addressed the statement in proposed
Sec. 589.2000(c)(1)(i).
    (Comment 61). Several comments requested that FDA revise the rule
to make the labeling statement simpler and more concise. Many suggested
that the statement simply say, ``Do Not Feed to Ruminants.''
    FDA agrees and has revised the cautionary statement in
Sec. 589.2000(c)(1)(i) to read, ``Do not feed to cattle or other
ruminants.'' This statement has the advantages of being simple and
concise, and it refers to cattle as an example of a ruminant animal.
    (Comment 62). In contrast, some comments asked FDA to revise
Sec. 589.2000(c)(1)(i) by placing the word ``warning'' or ``caution''
in the heading; requiring the use of bold type; referring to FDA
regulations or some other statement to indicate a legal prohibition;
and specifying the type, size, color or location of the label to ensure
it is noticeable.
    The agency agrees in part and disagrees in part with the comments.
Section 403(f) of the act (21 U.S.C. 343(f)) requires that any word,
statement, or other information required to appear on food labels or
labeling to be ``prominently placed thereon with such conspicuousness
(as compared with other words, statements, designs, or devices, in the
labeling) and in such terms as to render it likely to be read and
understood by the ordinary individual under customary conditions of
purchase and use.'' Here, the essential point of the cautionary
statement is that the product should not be fed to cattle and other
ruminants; thus, citing FDA regulations to indicate

[[Page 30953]]

a legal prohibition would provide little useful information to the vast
majority of consumers and would be contrary to keeping the statement
simple and concise.
    The agency does agree that the cautionary statement should be
noticeable. The statement should appear on product labels (such as
those attached to or are part of a bag or other container) and other
labeling for the product. For bulk products, the statement should
appear on the placard and invoice that accompany the shipment and on
any other labeling for the product. The agency does not have a
regulation that provides additional direction, beyond the statutory
language quoted above, regarding the prominence of the cautionary
statement and does not believe it is necessary to do so in this final
rule. However, the agency suggests that the statement be distinguished
by different type size or color or other means of highlighting the
statement so that it is easily noticed by a purchaser. Additional
information on animal food labeling may be found at part 501 (21 CFR
part 501).
    (Comment 63). One comment indicated a need for clear end user
labeling of any and all human foods containing the specified offal
(eye, spinal column, tonsil, thymus, spleen, and intestine) and/or
mechanically recovered meat.
    The USDA is responsible for labeling most meat products destined
for human consumption as food. Thus, the comment's suggestion is
outside the scope of this rule.
    b. Records.
    Proposed Sec. 589.2000(c)(1)(ii) would require renderers to
maintain copies of sales invoices and to make copies available for
inspection and copying by FDA. The preamble to the proposed rule
indicated that such records are a usual and customary part of normal
business activities (see 62 FR 552 at 570 and 579) and that FDA would
use such records to verify compliance with the rule.
    (Comment 64). FDA received several comments concerning records.
Several comments supported the use of such records for compliance
purposes. However, a few comments suggested that sales invoices may not
always accompany products, that persons may not retain sales invoices
or records, or that sales invoices may not contain sufficient
information for enforcing the regulation.
    In considering these comments, the agency reviewed several
Establishment Inspection Reports (EIR's) and supporting material that
had been collected as part of routine inspections or surveys of feed
ingredient manufacturers and feedmills. The supporting material for the
EIR's confirmed that some invoices contained detailed information
(regarding the items being sold and the identities of the seller and
purchaser) while others contained only a vague description of the
product and the name (without any address) of the company or person
receiving the product. Given the diversity in the sales invoices, and
the concerns expressed in some comments, FDA revised
Sec. 589.2000(c)(1)(ii) to require renderers to maintain records
sufficient to track the materials throughout their receipt, processing,
and distribution (rather than refer to sales invoices only), and to
make the copies available for inspection and copying by FDA. The final
rule enables renderers (and other parties that must comply with the
record requirement in Sec. 589.2000(c)(1)(ii)) to use sales invoices or
other records or a combination of such information so long as they
provide sufficient information to enable FDA to determine the receipt,
processing, and distribution of materials.
    The recordkeeping requirement can be satisfied by an invoice or
other similar document reflecting receipt or purchase, and sale or
delivery of the product by the renderer. The information normally
expected to be included in these documents includes: (1) Date of the
receipt or purchase, or sale or delivery; (2) seller's name and
address; (3) consignee's name and address; (4) identification of the
product; and (5) quantity. Regarding an identification of the product,
FDA notes that invoices or similar sales documents may serve as labels
for bulk rendered products.
    The act generally requires that the label of a regulated product
contain the product's customary or usual name. The common or usual
names of rendered products typically are those included in the
definitions published by AAFCO, such as ``meat and bone meal.'' Thus,
the use of the common or usual name on the invoice or similar sales
document will satisfy, in part, the ``records'' requirement in
Sec. 589.2000(c)(1)(ii) as well as the ``common or usual name''
requirement in the act. As discussed later in this document, the
records must be made available for FDA inspection and copying. They
should be kept so they are legible and readily retrievable.
    c. Exemptions for manufacturing and test methods.
    As stated earlier, proposed Sec. 589.2000(c)(2)(i) would exempt
renderers from the labeling and recordkeeping requirements if they use
exclusively a manufacturing method for deactivating the TSE agent that
has been validated by FDA and made available to the public. Proposed
Sec. 589.2000(c)(1)(ii) would exempt renderers from the label and
recordkeeping requirements if they routinely use a test method,
validated by FDA, for detecting the TSE agent and make that method
available to the public. Products found to contain a TSE agent would be
labeled ``Not for Use in Animal Feed,'' and records of test results
would be made available for FDA inspection.
    Several comments strongly supported this provision because it would
provide flexibility to the industry or would make methods available to
the public where they could be discussed and analyzed. Other comments
suggested amendments or clarification.
    (Comment 65). One comment concerning proposed
Sec. 589.2000(c)(2)(i) suggested that ruminant protein rendered by an
FDA-validated procedure should be labeled as ``Contains inactivated
bovine protein.''
    FDA declines to revise the rule as suggested by the comment. The
agency will make any necessary changes to the labeling requirements by
rulemaking when it validates the first rendering process.
    (Comment 66). One comment claimed that, in proposed
Sec. 589.2000(c)(2)(ii), the label statement for products found to
contain the TSE agent did not go far enough. The comment stated that
such products should be destroyed and positive tests reported to FDA.
    FDA declines to revise the rule as suggested by the comment at this
time. However, as explained below, FDA has revised the labeling
requirement so that products that are found to have a TSE agent must be
labeled ``Do not feed to cattle or other ruminants.'' Products intended
for use in ruminant feed that are found to contain a TSE agent are
violative under the act, and the agency has guidance documents
pertaining to the disposition of violative products.
    (Comment 67). Several comments raised issues related to the concept
of acceptable risk. One comment stressed that a definition of
``acceptable risk'' was necessary in order to develop a regulatory
program with a targeted end point. Other comments indicated that
regulatory programs should be based on some acceptable level of risk
reduction rather than defining a finite level of acceptable risk. One
comment suggested that FDA establish working groups comprised of
members from industry and consumer organizations to establish the
necessary level of risk reduction. Several comments cautioned that
establishing a zero level of risk could unnecessarily destroy certain
industries

[[Page 30954]]

and adversely impact the environment through the disposal of dead
animals and animal tissues by means other than rendering.
    The agency determines the safety of substances intended to become a
part of food by approval of a food additive petition or by general
recognition of safety. In either case, it must be established that
there is a reasonable certainty in the minds of competent scientists
that the substance is not harmful under the intended conditions of use.
Reasonable certainty of no harm does not imply a zero level of risk
(see 21 CFR 570.3(i)). Congress, when enacting the Food Additive
Amendments of 1958, recognized that it is impossible to establish with
complete certainty that any substance is absolutely safe for use.
    For the agency to determine that protein derived from mammalian
tissue would be safe for use in ruminant rations, it must be
demonstrated by scientific procedures that there is a reasonable
certainty that such feedstuffs could not transmit TSE's to ruminants.
The agency has determined that there is insufficient research on TSE
diseases to determine a minimum infective dose of the TSE agents in
ruminant rations, dose and age-related susceptibility factors, methods
for inactivation of the TSE agents, or methods for reliably detecting
the TSE agent in animal feeds. Such information is fundamental to the
establishment of any safe use of protein derived from mammalian tissue
in ruminant feed, and, under FDA's current statutory and regulatory
requirements, questions regarding the safe use of the tissues are to be
answered and presented to the agency in a food additive petition
submitted under section 409 of the act. Alternatively, consistent with
section 201(s) of the act (21 U.S.C. 321(s)) and Sec. 570.30, the
agency may be able to determine that the tissues are generally
recognized as safe based on scientific procedure. The provisions of
Sec. 589.2000(c)(2)(i), (c)(2)(ii), and (c)(2)(iii) of this final rule
provide that products containing protein derived from mammalian tissues
are exempt from the labeling and recordkeeping requirements if a method
for inactivation of the TSE agents is presented to and validated by the
agency, a test method to detect the presence of the agent that causes
TSE's is presented to and validated by the agency, or if validated
methods for controlling the manufacturing process that minimizes the
risk of the TSE entering the product are presented to and validated by
the agency. These developments and their validation by FDA should
provide relevant information on the establishment of safe conditions of
use for protein derived from mammalian tissues.
    (Comment 68). Proposed Sec. 589.2000(c)(2)(ii) would require, in
part, products that are found, through the use of validated test method
to detect the presence of a TSE agent, to be labeled, ``Not for Use in
Animal Feed.''
    Upon further reflection, FDA realized that the proposed labeling in
Sec. 589.2000(c)(2)(ii) was not consistent with the agency's objective
to prevent the establishment and amplification of BSE in the United
States through ruminant feed. Because products found to contain the TSE
agent are high risk FDA has revised the regulation to provide that for
renders using validated test methods, such renders must continue to
comply with the labeling and recordkeeping requirements in
Sec. 589.2000(c)(1) for products that test positive for the TSE agents.
    (Comment 69). FDA, on its own initiative, has created a new
Sec. 589.2000(c)(2)(iii) to provide an exemption from the rule's
labeling and recordkeeping requirements if a renderer uses exclusively
a validated method for controlling the manufacturing process that
minimizes the risk of the TSE entering the product. Under
Sec. 589.2000(c)(2)(iii), the method must be made available to the
public and validated by the agency. The agency added this provision to
complement Sec. 589.2000 (c)(2)(i) and (c)(2)(ii) and because an
exemption from the labeling and recordkeeping requirements would be
appropriate if such a method were developed, validated, and used.
    d. Exemptions for marking methods.
    Proposed Sec. 589.2000(c)(3) would exempt renderers from the
recordkeeping requirement if they use a permanent method, approved by
FDA, to mark the presence of protein derived from ruminant and mink
tissues.
    (Comment 70). FDA received very few comments on this provision. Two
comments supported the provision, although one comment conceded that it
was unaware of any permanent marking methods. Another comment suggested
that, for used cellulosic food casings, the casings themselves act as a
marker for ruminant proteins inside the casing.
    As stated elsewhere in this document, FDA has revised the
definition of ``protein derived from mammalian tissues'' to exclude
used cellulosic food casings. As a result, it is unnecessary to
consider whether used cellulosic food casings are a permanent method of
marking.
    FDA has made minor changes to this provision. The final rule omits
the reference to renderers ``who are not exempted under paragraph
(c)(2)(i) or paragraph (c)(2)(ii) of this section.'' FDA deleted this
language because it is unnecessary. A second minor change consists of
revising the phrase ``to mark the presence of the materials'' to ``to
make a mark indicating the presence of the materials.'' This change
reflects the fact that the presence of a material cannot be marked, but
that the product can be marked to show that it contains or may contain
protein derived from mammalian tissues.
4. Section 589.2000(d)--Requirements for Protein Blenders, Feed
Manufacturers, and Distributors That Are Not Included in Paragraph (e)
of This Section
    Proposed Sec. 589.2000(d)(1) would require protein blenders and
feed manufacturers and distributors to comply with labeling and
recordkeeping requirements. Proposed Sec. 589.2000(d)(2) would provide
exemptions if a protein blender or feed manufacturer and distributor
purchased animal protein products from renderers that certified
compliance with the requirements for deactivating or detecting the TSE
agent or complied with such requirements itself. Proposed
Sec. 589.2000(d)(3) would exempt a protein blender or feed manufacturer
and distributor from the recordkeeping requirement if it purchased
animal protein products that had been marked or complied with the
marking requirement itself. Proposed Sec. 589.2000(d)(4) would require
copies of the certified compliance statements to be made available to
FDA for inspection and copying.
    a. Cautionary statement.
    Under proposed Sec. 589.2000(d)(1)(i), protein blenders and feed
manufacturers and distributors that manufacture, blend, process, and
distribute products containing protein derived from ruminant and mink
tissue would have to label the product to state, ``Contains (or may
contain) protein derived from ruminant and mink tissues. Do not feed to
ruminant animals, and do not use to manufacture feed intended for
ruminant animals.''
    (Comment 71). Several comments would exempt pet food from the
rule's labeling requirement. One comment provided results from
interviews of 350 pet owners in 5 cities. These interviews examined
consumer reaction to the proposed rule's statement ``Contains (or may
contain) protein derived from ruminant and mink tissues. Do not feed to
ruminant animals, and do not use to manufacture feed intended for
ruminant animals.'' Sixty-eight percent of pet owners said they would
be concerned

[[Page 30955]]

about the safety of feeding any food to their pets with the proposed
statement, and more than 71 percent said that they would buy some other
pet food the first time they encountered the proposed statement on the
label of the pet food they generally buy. Other comments argued that
the statement was unnecessary on pet food because pet food is not used
for ruminant feed (due to its smaller quantity and higher price when
compared to ruminant feed). These comments did, however, suggest that
the cautionary statement would be appropriate for pet food products
that are salvaged or distressed and sold for possible use in animal
feed.
    Another comment, submitted in response to the draft codified
provisions that appeared in the Federal Register of April 17, 1997,
suggested that FDA also exempt feeds for nonruminant laboratory animals
from the labeling requirement.
    FDA agrees that the cautionary statement serves no useful purpose
on pet food and feed for nonruminant laboratory animals and has amended
the rule by creating a new Sec. 589.2000(d)(4) to exclude pet food
products that are sold or intended for sale at retail to non-food-
producing animals and feeds for nonruminant laboratory animals. These
products typically cost substantially more per ton than most complete
feeds intended for food-producing animals. Therefore, there is little,
if any, risk that pet foods or feeds for nonruminant laboratory animals
will be purchased at full price for use in ruminant rations. However,
if the pet food products are sold or are intended for sale as
distressed or salvage items, then, under Sec. 589.2000(d)(4), such
products must state, ``Do not feed to cattle or other ruminants.''
    In addressing the labeling requirement for salvaged or distressed
pet food, the draft codified provisions that were published in the
Federal Register of April 17, 1997, initially included the phrase ``for
possible use'' in ruminant feed. FDA has deleted the phrase ``for
possible use'' because it is unnecessary.
    (Comment 72). One comment, responding to the draft rule that
appeared in the Federal Register of April 17, 1997, sought
clarification as to what ``pet food'' meant.
    FDA interprets pet food as the food product fed to pet animals. A
pet animal is any domesticated animal normally maintained in or near
the household(s) of the owner(s) thereof. Examples include dogs, cats,
rats, mice, hamsters, gerbils, rabbits, ferrets, nonhuman primates,
canaries, psittacine birds, mynahs, finches, tropical fish, goldfish,
snakes, and turtles. FDA does not consider horses or other equids to be
pets because they are routinely slaughtered for human food.
Furthermore, FDA believes that, since feed for horses can be readily
utilized in ruminant rations and is often priced comparably to ruminant
feed, horse feed must be labeled ``Do not feed to cattle or other
ruminants.''
    (Comment 73). Some comments suggested revising the rule to require
feeds destined for use in nonruminant livestock to carry the cautionary
statement. In contrast, other comments argued that the cautionary
statement was unnecessary for nonruminant livestock feed.
    FDA acknowledges the possibility that very little feed labeled for
use in nonruminant livestock is diverted to ruminant rations and that
which is diverted would likely have to be markedly diluted to be
nutritionally balanced for maximum benefit by the ruminant.
Nevertheless, FDA agrees that a cautionary statement should be
required. Complete feeds for nonruminant livestock typically cost only
slightly more per ton and often contain more protein than complete
ruminant feeds. Therefore, because nonruminant livestock feed may be
diverted to ruminant feed, the final rule requires the cautionary
statement on all animal feed, including nonruminant livestock feeds
(with the exception for pet food products).
    (Comment 74). Other comments suggested that the agency revise the
collective terms in Sec. 501.110 (21 CFR 501.110) because, as a result
of the final rule, some feed ingredients would be prohibited in
ruminant rations.
    The agency disagrees with the comments. At this time, no revision
to Sec. 501.110 is necessary because there will still be a collective
name/term known as animal protein products and this collective name/
term will include animal products, marine products, and milk products.
The final rule merely prohibits animal protein products containing
protein derived from mammalian tissues from being used in ruminant
feeds. Because of the final rule, however, AAFCO may need to amend its
definition of the collective term ``animal protein products'' to
identify those feed ingredients that are prohibited from use in
ruminant rations. FDA intends to work with AAFCO to accomplish this
change. Although manufacturers of ruminant feeds that use this
collective term may need to reformulate their rations to exclude the
protein derived from mammalian tissue, the ingredients list on the
label for any ruminant feed can continue to use the ``animal protein
products'' collective term.
    (Comment 75). Several comments suggested that a mammalian to
ruminant ban would eliminate the need to change the AAFCO definitions.
    Except for some current AAFCO ingredients listed under animal
protein products in the collective terms section, FDA agrees with the
comments. AAFCO definitions currently allow the species of origin to be
listed in the name of the product (e.g., swine meat and bone meal).
These AAFCO definitions are flexible enough to allow positive
certification on invoices and convey adequate information to consumers
who are concerned about the presence of mammalian proteins in their
feeds.
    b. Records.
    Proposed Sec. 589.2000(d)(1)(ii) would require protein blenders and
feed manufacturers and distributors to maintain copies of invoices for
purchases of animal protein products or feeds containing such products
and to make those records available for inspection and copying by FDA.
    (Comment 76). One comment stated that this proposal was redundant
to the GMP recordkeeping requirements although, under the proposal, the
retention period would be 1 year longer than those required under the
GMP regulations.
    FDA disagrees, in part, with the comment. The GMP recordkeeping
requirement at Sec. 225.202 (21 CFR 225.202) requires records to be
maintained that identify ``the formulation, date of mixing, and if not
for own use, date of shipment'' and that the records be ``adequate to
facilitate the recall of specific batches of medicated feed that have
been distributed. Yet Sec. 225.202, and the regulations in part 225,
(21 CFR part 225) generally, only apply to persons manufacturing,
processing, packing, or holding medicated feed, and it is unlikely that
all protein blenders, feed manufacturers and distributors subject to
Sec. 589.2000 will be manufacturing, processing, packing, or holding
medicated feed. However, because most persons subject to
Sec. 589.2000(d)(1)(ii) may be subject to the GMP recordkeeping
requirement for medicated feed and because Sec. 225.202 only requires
records to be kept for 1-year after the date of last distribution, the
agency has evaluated the relative benefit of a 2-year recordkeeping
requirement and concluded that a 1-year recordkeeping requirement is
adequate. Thus, FDA has revised Sec. 589.2000(h) to adopt a 1-year
record retention period.
    FDA advises protein blenders, feed manufacturers, and distributors
that the recordkeeping requirement can be

[[Page 30956]]

satisfied by an invoice or other similar document reflecting receipt or
purchase, and sale or delivery of the product. The information normally
expected to be included in these documents includes: (1) Date of the
receipt or purchase, or sale or delivery; (2) seller's name and
address; (3) consignee's name and address; (4) identification of the
product; and (5) quantity. Regarding an identification of the product,
FDA notes that invoices or similar sales documents may serve as labels
for bulk rendered products, including blended protein products and
feeds. The act generally requires that the label of a regulated product
contain the product's customary or usual name. The common or usual
names of blended protein products and feed ingredients typically are
those included in the AAFCO definitions, such as ``meat and bone
meal.'' Thus, the use of the common or usual name on the invoice or
similar sales document will satisfy, in part, the ``records''
requirement in Sec. 589.2000(d)(1)(ii) as well as the ``common or usual
name'' requirement in the act. As discussed later in this document, the
records must be made available for FDA inspection and copying. They
should be kept so they are legible and readily retrievable.
    (Comment 77). One comment stated that the recordkeeping
requirement, as applied to feed containing ruminant tissue, places an
unnecessary burden on all manufacturers of nonruminant feeds and pet
foods.
    Because the final rule now prohibits the use of protein derived
from mammalian tissues in ruminant feed, FDA has revised
Sec. 589.2000(d)(1) to state that protein blenders, feed manufacturers,
and distributors that manufacture, blend, process, and distribute
products that contain or may contain protein derived from mammalian
tissues shall comply with the requirements in Sec. 589.2000(c)(1). This
means that the provision does not apply to protein blenders, feed
manufacturers, and distributors who do not manufacture, blend, process
or distribute products that contain or may contain proteins derived
from mammalian tissues.
    (Comment 78). A small number of comments would revise this
provision of the proposed rule so that commercial contract guarantees
could be used as evidence of compliance by feed manufacturers. These
comments explained that feed manufacturers should be able to rely on a
guarantee because FDA, itself, would rely on commercial records for
enforcement purposes.
    The agency declines to revise the rule as suggested by the
comments. Section 303 (c)(2) and (c)(3) of the act (21 U.S.C. 333
(c)(2) and (c)(3)) and FDA regulations at 21 CFR 7.12 and 7.13 already
establish the statutory and regulatory requirements for a guaranty.
Thus, the change suggested by the comments is unnecessary (see response
to comment 21).
    c. Exemptions for purchases from renderers certifying compliance.
    Proposed Sec. 589.2000(d)(2)(i) would exempt protein blenders, feed
manufacturers, and distributors from the requirements in Sec. 589.2000
(d)(1)(i) and (d)(1)(ii) if they purchased animal protein products from
renderers certifying that they used methods to deactivate or detect the
presence of the TSE agent. Alternatively, under proposed
Sec. 589.2000(d)(2)(ii), a protein blender, feed manufacturer, or
distributor could obtain the exemption if it complied with the
requirements regarding methods to deactivate or detect the presence of
the TSE agent.
    (Comment 79). One comment stated that, insofar as methods for
deactivating the BSE agent are concerned, FDA must examine the accuracy
of the infectivity assessment and the sensitivity and reliability of
the methods used and consider the relationship between the quantity of
material tested and the total quantity in a particular batch. The
comment stated that FDA must use or develop this expertise.
    The agency agrees with the comment and intends to carefully
examine, when a claimed method for inactivating a TSE agent is
presented to FDA for validation, whether the method is effective. At
this time, the agency is unaware of any such methods.
    (Comment 80). One comment, submitted in response to the draft
provision that appeared in the Federal Register of April 17, 1997,
requested clarification of the type of certification required under
Sec. 589.2000 (d)(2) and (d)(3) if the qualifications for exemption
identified in Sec. 589.2000(c)(2) were met.
    FDA has not validated any methods that would meet the requirements
for any of the exemptions in this rule. If and when the agency does so,
it will provide guidance as needed for the implementation of such
exemptions, including certification under Sec. 589.2000 (d)(2) and
(d)(3).
    d. Exemptions for purchases of marked protein products.
    Proposed Sec. 589.2000(d)(3) would exempt protein blenders, and
feed manufacturers and distributors from recordkeeping requirements if
they purchased animal protein products that had been marked to indicate
the presence of animal protein derived from ruminant or mink tissues
complied with the marking requirement itself.
    (Comment 81). One comment would revise this provision to include
products that are ``labeled'' as being in compliance. The comment
contemplated a system whereby persons could certify that their products
did not contain ruminant protein and complied with the rule.
    The agency declines to revise the rule as suggested by the comment.
The permanent mark described in Sec. 589.2000(c)(3) serves as a visual
cue or other detectable signal that protein derived from mammalian
tissue may be present. Labeling is not equivalent to a permanent mark
because it may be separated from the product.
    e. Copies of certifications.
    Proposed Sec. 589.2000(d)(4) would require copies of the
certifications described in Sec. 589.2000 (d)(2) and (d)(3) to be made
available for inspection and copying by FDA.
    (Comment 82). FDA received no comments on this provision. However,
because the agency has added a new paragraph (d)(4) to exempt pet food
products and feeds for nonruminant laboratory animals from the labeling
requirement, FDA has renumbered proposed paragraph (d)(4) as paragraph
(d)(5).
5. Section 589.2000(e)--Requirements for Persons That Intend To
Separate Mammalian From Nonmammalian Materials
    Proposed Sec. 589.2000(e) would require persons that intend to
separate ruminant and mink materials from nonruminant material to
comply with the labeling requirement for products derived from ruminant
and mink tissues or feeds containing such products, would require
renderers to obtain nonruminant (excluding mink) materials only from
single-species facilities, and would require these persons to provide
for measures to avoid commingling and cross-contamination.
Additionally, the proposal would exempt renderers, blenders, and feed
manufacturers and distributors from these requirements if they met
certain exemption criteria.
    a. Cautionary statement.
    Proposed Sec. 589.2000(e)(1)(i) would require persons who intend to
separate ruminant/mink and nonruminant/mink materials to comply with
the labeling requirement in Sec. 589.2000 (c)(1) or (d)(1) for products
derived from ruminant and mink tissues or feeds containing such
products.
    (Comment 83). One comment would revise this provision to add equine
materials.

[[Page 30957]]

    Because the final rule now pertains to protein derived from
mammalian tissues, the agency has revised Sec. 589.2000(e)(1)(i) so
that the labeling requirement only applies to products containing
protein derived from mammalian tissues or feeds containing such
products. Additionally, FDA, on its own initiative, has made two
revisions to this provision. The agency has deleted ``haulers'' from
the Sec. 589.2000(e)(1) because such persons are considered to be
``distributors'' as defined in Sec. 589.2000(a)(6). The final rule also
refers to ``products containing protein derived from mammalian
tissues'' rather than ``products derived from mammalian (other than
pure porcine)'' tissues as used in the codified (62 FR 18728), to be
consistent with the definition of ``protein derived from mammalian
tissues'' in Sec. 589.2000(a)(1).
    b. Nonmammalian or pure porcine or equine materials only from
single-species facilities.
    Proposed Sec. 589.2000(e)(1)(ii) would require renderers who intend
to separate ruminant/mink and nonruminant/mink materials to obtain
nonruminant (excluding mink) materials only from single-species
facilities.
    (Comment 84). FDA received no comments on this provision. However,
because the final rule now pertains to protein derived from mammalian
tissues, the agency has revised Sec. 589.2000(e)(1)(ii) so that the
renderer must obtain nonmammalian or pure porcine or equine materials
only from single-species slaughter facilities. The insertion of the
word ``slaughter'' is intended to clarify the type of facility involved
in this provision. Additionally, FDA interprets the term ``single-
species slaughter facilities'' to mean dedicated slaughter facilities
that only slaughter one type of animal; the term does not include
facilities that slaughter different types of animals on different days
or work shifts.
    c. Measures to avoid commingling and cross-contamination.
    Proposed Sec. 589.2000(e)(1)(iii) would require persons that intend
to separate ruminant/mink from nonruminant (excluding mink) materials
to provide for measures to avoid commingling or cross-contamination.
This could be achieved through separate equipment or facilities for the
manufacture, processing, or blending of such materials or through
``clean-out procedures or other means adequate to prevent carry-over''
of ruminant and mink derived protein into animal protein products or
feeds intended for use in ruminants.
    (Comment 85). No comments focused on the concept of maintaining
separate equipment or facilities for the manufacture, processing, or
blending of materials (although one comment presumed that separate
facilities and equipment could be costly). Nevertheless, FDA advises
interested persons that it interprets this provision as extending to
separate storage of such materials.
    (Comment 86). Most comments on proposed Sec. 589.2000(e)(1)(iii)
addressed issues concerning ``adequate'' clean-out and carry-over. Oral
comments from the public meetings and written comments to the proposed
rule requested that FDA define what constitutes ``adequate'' clean-out.
Comments from industry and consumer groups expressed concern that it
would be difficult to verify if adequate clean-out procedures were used
because there is no test that readily differentiates between ruminant
and nonruminant protein. Other comments suggested that firms handling
prohibited and nonprohibited products obtain prior approval from FDA,
that FDA consider the clean-out provisions of GMP's currently used by
the feed industry for medicated feeds to be ``adequate,'' that FDA
require clean-out procedures only where raw-product is co-mingled
(i.e., equipment is shared), and that the agency publish procedures for
``adequate'' clean-out and solicit public comment. Additionally, one
comment noted that much rendering equipment is not designed to be
readily opened, so washing the equipment is not a viable option, while
a comment from the rendering industry detailed clean-out procedures for
the various rendering systems. The procedures varied depending on the
system used and the point at which materials shared the same processing
steps or equipment.
    FDA agrees that only equipment and storage facilities that are
shared by proteins derived from mammalian and nonmammalian tissues are
subject to the clean-out requirement.
    With regard to the word ``adequate,'' the agency realizes that
equipment utilized by the feed and rendering industries has certain
limitations relating to cleanout. In the feed industry, the medicated
feed GMP's for sequencing and cleanout have proved to be effective in
preventing unsafe drug carry over into feed and thereby preventing
unsafe tissue residues in foods of animal origin intended for human
consumption. For renderers, blenders, feed manufacturers, and
distributors (including haulers), FDA will consider the use of clean-
out procedures described immediately below to be ``adequate'' for
purposes of Sec. 589.2000(e)(1)(iii)(B). The procedures for blenders,
feed manufacturers, and distributors are based on the equipment clean-
out procedures in Sec. 225.65 (21 CFR 225.65). The procedures for
renderers are based on comments from the rendering industry on the
proposed rule, suggesting clean-out procedures for the four types of
rendering systems currently used in the United States. FDA will
consider renderers who can document that they are using the clean-out
protocol applicable to their system to be using ``adequate'' clean-out
procedures under Sec. 589.2000(e)(1)(iii)(B). The clean-out procedures
for renderers appear in section II.B.5.c.i of this document.
    i. Separating and processing options for renderers.
    These options are based on what should work in most actual
operational conditions that renderers face day-to-day in their plants.
    (1). A single plant with two or more totally segregated processing
lines. This includes all process functions from raw material receiving
through and including finished product load-out

BILLING CODE 4160-01-P
[GRAPHIC] [TIFF OMITTED] TR05JN97.000

BILLING CODE 4160-01-C

Suggested Clean-out Procedures for Processing Option 1--No clean-out
procedures are necessary for this processing situation, as the lines
are completely separate. This type of plant should have the ability to
process prohibited and nonprohibited products from the same plant so
long as procedures are in place to assure total segregation. These
procedures may be part of the plant's written procedures specifying the
clean-out procedures utilized and would be available for inspection and
subject to FDA review for compliance purposes.
    (2). Single plant with two or more segregated raw material
receiving, grinding, cooking, and pressing lines but sharing finished
product conveying, grinding, and load-out systems

BILLING CODE 4160-01-P

[[Page 30958]]

[GRAPHIC] [TIFF OMITTED] TR05JN97.001

BILLING CODE 4160-01-C
    Suggested Clean-out Procedures for Processing Line Option 2--The
clean-out and flushing guidelines for this type of plant deal
specifically with the meal grinding (and screening), storage, and load-
out systems. It is assumed that this type of plant would have separate
storage facilities for prohibited versus nonprohibited product. It may
have separate or common load-out facilities.
    The first step in the clean-out and flushing procedure should be to
empty all transport and process equipment from the first point of
commonality of products to the final load-out device. The system should
then be flushed with a sufficient volume of nonprohibited product to
accomplish one complete change of operating volume of the entire system
(exclusive of separate meal storage facilities). The flush material
would be considered as prohibited meal and treated as such.
    Once the system has been flushed, all subsequent material processed
would be nonprohibited meal. Specific operating procedures would be
documented and verified and would be part of the plant's written
procedures specifying the clean-out procedures utilized and would be
available for inspection and subject to FDA review for compliance
purposes.
    (3). Single plant with separate raw material receiving and
grinding, common cooking and pressing, common or separate finished
product handling.

BILLING CODE 4160-01-P
[GRAPHIC] [TIFF OMITTED] TR05JN97.002

BILLING CODE 4160-01-C
    Suggested Clean-out Procedures for Processing Option 3--The clean-
out and flushing guidance for this type of plant deal specifically with
the cooking and pressing systems. The meal grinding, storage, and load-
out systems should be cleaned and flushed according to the guidance in
processing option 2 above. It is also assumed that this type of plant
would have separate storage facilities for prohibited versus
nonprohibited finished meal. It may have separate or common load-out
facilities.
    The first step in the clean-out and flushing procedure should be to
empty all transport and process equipment (including the cooker) from
the first point of commonality of raw material to the meal grinding
system. The system should then be flushed with sufficient prohibited
raw material to accomplish the following changes of the operating
volume of the cooker:
    In the case of a continuous cooker with a bottom discharge (to
provide positive cooker clean-out), raw material equal to at least one-
half the operating volume of the cooker;
    In the case of a continuous cooker without a bottom discharge, raw
material equal to at least the operating volume of the cooker; or
    In the case of a batch cooker system, raw material equal to at
least one half the operating volume of the cooker for each batch
cooker.
    In general, the volume of material required to flush the cooking
system should provide an adequate flush of the meal grinding, storage
and load-out system, as well. The flush material should be considered
prohibited product and treated as such. All subsequent material
processed should be considered nonprohibited product. Specific
operating procedures should be documented and verified, should be part
of the plant's written procedures specifying the clean-out procedures
utilized, and would be available for inspection and subject to FDA
review for compliance purposes.
    (4). A single plant with one processing line. This includes all
process functions from raw material receiving through and including
product load-out.

BILLING CODE 4160-01-P
[GRAPHIC] [TIFF OMITTED] TR05JN97.003

BILLING CODE 4160-01-C
    Suggested Clean-Out Procedures for Processing Option 4--The clean-
out and flushing guidelines for this type of plant deal with the
complete plant process. It is assumed that this type of plant would
have adequate storage facilities to separate prohibited from
nonprohibited finished product. It may have separate or common load-out
facilities.
    The first step in the clean-out and flushing procedure should be to
empty all transport and process equipment including the raw material
receiving hoppers, conveyors, grinders, and cooker from the first point
of commonality of raw material through the load-out system. As a
guideline, the volume of flushing material should be equal to the
operating volume of the process and transport equipment, including the
cookers.
    The flush material should be considered prohibited product and

[[Page 30959]]

treated as such. All subsequent material processed would be considered
nonprohibited product. Specific operating procedures should be
documented and verified, be part of the plant's written procedures
specifying the clean-out procedures utilized, and be available for
inspection and subject to FDA review for compliance purposes.
    (5). Summary for clean-out procedures.
    Due to the degree of variability among rendering systems, HACCP
would be helpful in implementing any of the above clean-out procedures
and could enable differences to be addressed on a site-specific basis.
Renderers could follow the above clean-out procedures by determining
their plant's individual characteristics and apply appropriate time and
volume requirements for flushing material to accomplish the intent of
the procedures. Individual clean-out procedures, including time and
volume calculations, should be part of the plant's written procedures
specifying the clean-out procedures utilized and would be available for
inspection and subject to FDA review for compliance purposes.
    ii. Separating and processing options for blenders, manufacturers,
and distributors.
    FDA is providing the following practical guidance based on what
should work in most actual operational conditions that blenders,
feedmills, distributors, and haulers face day-to-day in their
operations and for complying with Sec. 589.2000(e)(1)(iii)(B). This
guidance was adapted from the medicated feed GMP's in Sec. 225.65. The
medicated feed GMP's for clean-out were chosen as a model because they
have proved to be effective in preventing unsafe drug carry-over into
feed and thereby preventing tissue residue in products intended for
human food. The medicated feed GMP's are not an entirely appropriate
model for clean-out procedures for the rendering industry because of
the difference in equipment and operating procedures. The agency will
consider firms using the clean-out procedures at least as stringent as
those detailed below to be of ``adequate'' as used in
Sec. 589.2000(e)(1)(iii)(B).
    Adequate clean-out procedures for all equipment used in the
manufacture and distribution of feeds containing mammalian and
nonmammalian protein are essential to avoid unsafe contamination of
ruminant feeds. Such procedures may consist of cleaning by physical
means, e.g., vacuuming, sweeping, washing, etc. Alternatively, flushing
or sequencing or other equally effective techniques may be used whereby
the equipment is cleaned through use of a nonprohibited product. After
cleaning, the non-prohibited product used in the cleaning should be
handled and stored in an appropriate manner.
    FDA suggests that all equipment, including that used for storage,
processing, mixing, conveying, and distribution that comes in contact
with feeds containing mammalian and nonmammalian protein, follow all
reasonable and effective procedures to prevent contamination of
manufactured feed. The steps used to prevent contamination of feeds
often include one or more of the following, or other equally effective
procedures: (1) Physical means (vacuuming, sweeping, or washing),
flushing, and/or sequential production of feeds; (2) if flushing is
utilized, FDA recommends that the flush material be properly
identified, stored, and used in a manner to prevent contamination of
other feeds. The volume of the flushed material should be sufficient to
equal the operating volume of the shared equipment; (3) if sequential
production is utilized, FDA recommends that it be on a predetermined
basis designed to prevent unsafe contamination of ruminant feeds. An
example of appropriate sequencing would be producing a swine feed
containing mammalian protein, followed by a swine or poultry feed not
using mammalian protein, followed by a ruminant feed containing
nonmammalian protein.
    Due to the degree of variability among feedmill systems, an HACCP-
based approach of process controls would be helpful in implementing any
of the above clean-out procedures. This will enable differences to be
addressed on a site-specific basis. Feedmills could follow the clean-
out procedures by determining their plant's individual characteristics
and apply appropriate time and volume requirements for flushing
material to accomplish the intent of the procedures. Individual clean-
out procedures, including time and volume calculations, may be part of
the plant's written procedures specifying the clean-out procedures
utilized, and the written procedures are subject to FDA review for
compliance purposes.
    d. Written procedures.
    Proposed Sec. 589.2000(e)(1)(iv) would require persons to maintain
written procedures specifying the clean-out procedures or other means
for separating ruminant and mink materials from nonruminant (excluding
mink) materials from the time of receipt until the time of shipment.
    (Comment 87). One comment suggested that firms that intend to
separate ruminant from nonruminant protein be required to notify FDA of
their intent.
    As applied to the final rule, such a notification requirement could
result in a more efficient use of FDA enforcement resources. However,
because it would impose an additional burden on the regulated industry,
the agency has decided against imposing a notification requirement.
    (Comment 88). FDA, on its own initiative, has revised
Sec. 589.2000(e)(1)(iv) to replace ``ruminant and mink materials from
nonruminant (excluding mink) materials'' with ``mammalian (other than
pure porcine or equine) materials from nonmammalian materials.'' This
change was necessary because the final rule now prohibits the use of
protein derived from mammalian tissues in ruminant feed.
    FDA also advises persons subject to Sec. 589.2000(e)(1)(iv) to
draft their written procedures in sufficient detail to give an FDA
investigator a general understanding of the procedures being used to
satisfy the regulations. The written procedures should also enable the
investigator to take the written procedures into the plant and easily
identify operations and procedures stated in the written procedures. In
other words, the written procedures should correspond to the facility's
actual operations.
    e. Exemptions.
    Proposed Sec. 589.2000(e)(2) would, under certain conditions,
exempt renderers, blenders, feed manufacturers, and distributors that
intend to separate ruminant/mink from nonruminant/mink materials from
the requirements in Sec. 589.2000(e)(1).
    (Comment 89). One comment stated that an exemption should be
available for facilities using validated separation and clean-out
procedures.
    The agency believes that the comment misinterprets
Sec. 589.2000(e)(2). If a person separates materials and uses clean-out
procedures or other means adequate to prevent carry-over of protein
derived from mammalian tissues, then that person is, in effect,
complying with Sec. 589.2000(e)(1). Thus, no revision to
Sec. 589.2000(e)(2) is necessary.
6. Section 589.2000(f)--Requirements for Establishments and Individuals
That Are Responsible for Feeding Ruminant Animals
    Proposed Sec. 589.2000(f) would require establishments and
individuals that are responsible for feeding ruminants to

[[Page 30960]]

maintain copies of purchase invoices and labeling for all feeds
received and to make copies available for inspection and copying by
FDA.
    (Comment 90). One comment stated that it was neither practical nor
necessary to require establishments and individuals responsible for
feeding ruminant animals to maintain copies of purchase invoices and
labeling for all feed received. The comment stated that the
recordkeeping requirement should apply only to feed and feed
ingredients containing animal protein.
    FDA agrees with the comment and has revised the rule to clarify
that the recordkeeping requirement applies only to feed and feed
ingredients containing animal protein products. The recordkeeping
requirement does not apply to other feed and feed ingredients such as
roughage, feed grains, etc.
    The agency recognizes that bulk shipments of feed are commonplace,
and that labeling information typically is contained in the invoices
for bulk shipments. In those instances, maintenance of the invoice is
sufficient. If the only labeling for a bulk product is on a placard,
the placard for each shipment should be retained. Feed may also be
received in bags or other containers that have attached labeling. In
those instances, the labeling should be removed and retained. However,
maintenance of only one such labeling piece from each shipment that
represents a different product is necessary. Finally, if the labeling
cannot be removed from the bag or other container, maintenance of a
representative bag or a transposed copy of the labeling information
from a container that cannot feasibly be stored will suffice.
7. Section 589.2000(g)--Adulteration and Misbranding
    Proposed Sec. 589.2000(g) would declare that animal protein
products and feeds containing such products that do not comply with the
requirements in Sec. 589.2000 (c) through (f) may be deemed adulterated
under section 402 (a)(2)(C) or (a)(4) of the act. Products that do not
comply with the labeling requirements would be misbranded under section
403(a)(1) of the act.
    (Comment 91). FDA received no comments on this paragraph. However,
the agency, on its own initiative, has revised Sec. 589.2000(g) to
include a reference to section 403(f) of the act. Section 403(f) of the
act (21 U.S.C. 343(f)) considers a food to be misbranded if any word,
statement, or other information required by the act to appear on the
label or labeling ``is not prominently placed thereon with such
conspicuousness * * * and in such terms as to render it likely to be
read and understood by the ordinary individual under customary
conditions of purchase and use.'' Here, a reference to section 403(f)
of the act is appropriate because the final rule contains a required
cautionary statement.
8. Section 589.2000(h)--Inspection and Records Retention
    Proposed Sec. 589.2000(h)(1) would require records to be made
available for inspection and copying and to be kept for at least 2
years. Under proposed Sec. 589.2000(h)(2), written procedures required
by Sec. 589.2000 would have to be made available for FDA inspection and
copying.
    (Comment 92). A small number of comments would revise proposed
Sec. 589.2000(h)(1) to extend the time period. Some comments explained
that TSE's have a long incubation period so, in the event of a TSE
outbreak, the records may no longer exist. These comments suggested
lengthening the amount of time records would be retained.
    FDA declines to revise the rule as suggested by the comments. The
rule is intended to help prevent the establishment and amplification of
TSE's in ruminants through feed, and the records to be retained under
the rule are to help FDA determine compliance with the rule. FDA
acknowledges that TSE's may have long incubation periods exceeding 2
years, but, for purposes of determining whether a person is currently
complying with the rule and for reasons expressed earlier in this
document, the agency has revised Sec. 589.2000(h)(1) to adopt a 1 year
record retention period.
    Additionally, extending the record retention period would have
little practical value in determining the source of a TSE in an animal,
considering the potentially long time period from ingestion of the TSE
agent in feed to manifestation of clinical signs and lesions and the
lack of a reliable estimate for the latency period.
    FDA does suggest, however, that records be kept in a clean and
orderly manner to facilitate prompt retrieval and be legible.

C. Comments on the Effective Date

    (Comment 93). Two comments endorsed implementation of the final
rule 60 days after date of publication in the Federal Register.
However, one comment suggested that printed packaging materials,
labels, and labeling on hand or under production contract be exempt
from compliance with the implementation date. The other comment
requested an exemption for the finished products on hand or in channels
of distribution.
    Another comment, submitted in response to the codified provisions
(62 FR 18728), requested a 1-year effective date.
    FDA does not believe that an effective date of 1 year after
publication of this final rule is consistent with the agency's
objectives. Therefore, the final rule is effective on August 4, 1997.
With regard to printed packaging, labels, labeling, and finished
products manufactured before the publication of the rule, such
materials and products may continue to be used until those supplies are
exhausted, but such period should not exceed October 3, 1997. The
agency believes this is a reasonable period to exhaust existing
supplies during the 60 days before the rule takes effect and within 60
days after the rule becomes effective.

D. Miscellaneous Comments

    (Comment 94). One comment asserted that the absence of reported BSE
cases in the United States can only support the assumption of BSE-free
status with an acceptable level of uncertainty if there exists an
effective epidemiological surveillance program, and an acceptable
reduction in exposure of sensitive animals, based on supportable risk
assessment studies, has been achieved. The comment further described an
effective epidemiological surveillance system to include an information
network among veterinary practitioners, breeders, and the government
veterinary services. The comment would also require all suspect
animals, including downer cattle, to undergo an histological diagnostic
examination for TSE's.
    There is no evidence to date to show that BSE exists in the United
States. As stated in the preamble to the proposed rule, APHIS has a
comprehensive surveillance program in the United States to ensure
timely detection and swift response should BSE occur in the United
States (see 62 FR 552 at 562 and 563). The APHIS surveillance program
incorporates both the location of imports from the United Kingdom and
targeted active and general surveillance for either BSE or any other
TSE in cattle. APHIS has not found any evidence of BSE in any British
cattle imported into the United States between January 1, 1981, and
July 1989 (at which time the United States prohibited the importation
of ruminants from countries affected with BSE).
    In May 1990, a targeted active surveillance program for BSE began.
BSE is a notifiable disease, and more

[[Page 30961]]

than 250 Federal and State regulatory veterinarians are specially
trained to diagnose foreign animal diseases, including BSE. This
surveillance effort, which involves APHIS, FSIS, and the Centers for
Disease Control and Prevention, examines cases of cattle exhibiting
signs of neurological disease, cattle condemned at slaughter for
neurological reasons, neurological cases submitted to veterinary
diagnostic laboratories and teaching hospitals, and a random sampling
of cattle which are nonambulatory at slaughter. The targeted active
surveillance program focuses on these animals because they are the
highest risk population. As of March 31, 1997, 5,552 brains had been
examined for BSE or another TSE in cattle, and no evidence of either
condition has been found.
    Additionally, the USDA has a general surveillance program that uses
existing data sources, such as a database of diagnoses from 27
veterinary schools in the United States, CNS antemortem condemnation
data from FSIS, necropsies performed at zoos on various species, and a
veterinary diagnostic laboratory reporting system. Referrals of unusual
cases by private practitioners to veterinary schools and diagnostic
laboratories adds to this surveillance. Through these sources, there
has been no reported incidence of a new neurologic disease in cattle
and no increase in the number of neurologic diagnoses or referrals.
    Based on these programs, there is no evidence to date to show that
BSE exists in the United States. FDA's final rule adds to these
programs by preventing the establishment and amplification of BSE in
the United States through feed, thereby minimizing the health risk to
animals and humans.
    As for the comment that would require all suspect animals to
undergo a histological diagnostic examination for TSE's, such
examinations are conducted by the USDA and therefore are outside the
scope of this rule.
    (Comment 95). One comment objected to a sentence in the preamble to
the proposed rule which stated that there is ``no immediate threat to
the U.S. public health'' (62 FR 552 at 554). The comment argued that
the sentence should say that there is no ``recognized'' immediate
threat to public health and claimed that over 10,000 people would
eventually die from nv-CJD.
    FDA agrees that there is no recognized immediate threat of BSE or
nv-CJD in the United States because neither BSE nor nv-CJD have been
diagnosed in the United States. There is a very small probability that
undiagnosed cases of BSE and/or nv-CJD might exist.
    (Comment 96). One comment objected to a sentence in the preamble to
the proposed rule which stated that ``The agency recognizes that
processed ruminant byproducts have a long history of use in animal
feeds without known adverse effects'' (62 FR 552 at 566). The comment
interpreted this sentence as meaning that an animal fed a high-fat diet
will have a body fat composition that is a reflection of the degree of
saturation of the fats in the diet.
    FDA does not dispute this dietary interpretation, but the agency's
intent was to state that correctly processed and handled ruminant
byproducts used in feeds have not previously been implicated as a
vector for diseases in animals. BSE is the first instance in which the
safe use of these processed products in ruminant feed has been
questioned as a possible vector for disease.
    (Comment 97). The same comment also questioned the role of overall
food animal management practices (diet, housing, breeding, etc.) and
the role these practices have in animal diseases.
    FDA is unaware of any food management practices, other than the use
of mammalian protein in ruminant feeds, that presents a risk of
contributing to the establishment and amplification of BSE in the
United States through feed. FDA is opposed to management practices that
result in physical or nutritional harm to animals. A correctly
formulated feed containing animal protein should be safe both from a
nutritional and animal disease standpoint. BSE has prompted FDA to
question the safety, from an animal disease perspective, of feeding
mammalian protein products to ruminants, but has not led FDA to
question the nutritional value of rendered ruminant products.
    (Comment 98). One comment questioned whether the final rule applies
to imported animal feeds and feed ingredients.
    The act does not impose different requirements for imported animal
feeds and feed ingredients intended for use in the United States. Such
products are subject to the same statutory and regulatory requirements
as domestically produced animal feeds and feed ingredients. Thus, under
the final rule, protein derived from mammalian tissues is not generally
recognized as safe for use in ruminant feed in the United States
regardless of whether the feed is domestic or imported.
    (Comment 99). Two comments referred to additional surveillance data
which were available from other State and Federal sources but not used
in the proposed rule. These comments stated that more complete data are
available from accredited and certified State and Federal diagnostic
laboratories to supplement surveillance and risk assessments, and the
comments requested that FDA assemble, evaluate, and publish the data
before issuing a final rule.
    When FDA drafted the proposed rule, it used the most recent data
available from the USDA. FDA is aware of the recent data which was
published in 1997 (Ref. 12) but the data do not warrant a change to the
rule.
    Additionally, contrary to the comments' assertion, there are no
State surveillance data.
    (Comment 100). Several comments addressed issues related to
surveillance activities. These comments called for: increased import
restrictions, including the acceptance of imported products from only
BSE-free countries that have active monitoring and surveillance
programs and with similar controls on rendering practices; the testing
of all downer cows or all animals exhibiting neurological disorders and
of beef and dairy herds by using a bovine urine test; the eradication
of all TSE's in food animals; examination of the brains of pigs and
poultry for CNS disorders; a separate, significant epidemiological
study to determine the incidence of TSE in downer cattle through a
mandatory inspection program; a mandatory certification program for
Suffolk sheep breeders, and for all infected flocks and for all flocks
to which infected sheep have been traced back, for all breeds; a
mandated scrapie and TSE eradication program with full producer
indemnification; and monitoring, surveillance and education regarding
all TSE diseases in animals, including veterinary and producer
education programs, and the establishment of a national database of TSE
monitoring with information from all state veterinarians. Another
comment requested that the agency inform consumers of the risk
associated with eating meat from animals fed animal byproducts. Several
comments addressed the adequacy of United States surveillance efforts.
An additional comment questioned the impact that the proposed rule will
have on existing and potential animal disease control programs. Another
comment suggested that farmers should be reimbursed for the ``pre-
disease full market value'' for any BSE-infected cattle, which must be
killed and carefully disposed of, to prevent farmers from hiding or
selling BSE-infected cattle.
    These animal disease monitoring matters are covered by laws which
are

[[Page 30962]]

administered by the USDA, and are therefore outside the scope of this
rule. FDA intends to work with the USDA to coordinate respective
educational programs.
    (Comment 101). One comment argued that the rule was unnecessary
because, according to the comment, the heat used in rendering processes
reaches 270  deg.F and therefore would kill infectious organisms.
    FDA disagrees, in part, with the comment. While rendering does
eliminate conventional infectious organisms such as bacteria and
viruses, the TSE agent does not appear to be a conventional living
organism. As noted in the preamble to the proposed rule, the TSE agent
is resistant to various methods for inactivation, including high
temperatures (see 62 FR 552 at 560). Research has shown that some
rendering processes may reduce the amount of the TSE agent present, but
may not eliminate it completely. FDA is also aware that not all
rendering processes reach 270  deg.F; some reach lower temperatures.
    (Comment 102). Two comments pertained to the risk to humans who
consume mechanically deboned meat including meat obtained from Advanced
Meat Recovery systems. The comments indicated that meat from such
systems contains central nervous tissue in the form of the brain stem
and spinal cord, thus exposing the public to tissues that potentially
contain TSE agents. One comment stated that FDA should work with the
FSIS to ensure that the animal population and the human population are
protected by minimizing the possibility of BSE reaching the United
States.
    FDA does not have jurisdiction over mechanically deboned meat and,
therefore, cannot address issues related to mechanically deboned meat
in the final rule. Because the rule is intended to prevent the
establishment and amplification of BSE within the United States through
feed, cattle presented for slaughter should remain free of TSE agents,
and any potential risk of transmitting TSE's to humans from consuming
of mechanically deboned meat should be reduced substantially.
    (Comment 103). One comment asserted that the comment period on the
proposed rule was not adequate in light of the far reaching and
complicated issues involved in this rulemaking. The comment stated that
the agency should publish an interim final rule to give industry
additional time to comment.
    The agency does not agree with this comment. The agency believes it
has provided a more than adequate comment period to address the issues
presented in this rulemaking. Because of the complex issues involved in
this rulemaking, in addition to the 45-day comment period for the
proposed rule, the agency has provided four other opportunities for
public comment. The advanced notice of proposed rulemaking that was
published in the Federal Register on May 14, 1996 (61 FR 24253),
provided a 30-day public comment period. In addition, the agency held
two open forums to discuss the notice of proposed rulemaking (see 62 FR
3848, January 27, 1997). Finally, the agency made available a draft
rule and provided a 10-day public comment period (see 62 FR 18728).
    The Administrative Procedure Act (APA) requires only that an agency
``give interested persons an opportunity to participate in the rule
making through submission of written data, views, or arguments * * *''
(5 U.S.C. 553(c)). This is all the APA requires; there is no statutory
requirement concerning how many days an agency must allow, nor is there
a requirement that an agency must extend the period at the request of
an interested person (see Phillips Petroleum Co. v. EPA, 803 F.2d 545,
559 (10th Cir. 1986)).
    FDA's own regulations generally afford the public 60 days to
comment on a proposed rule, unless the Commissioner of Food and Drugs
shortens or lengthens the period for good cause (21 CFR 10.40(b)(2)).
Executive Order 12889 implementing the North American Free Trade
Agreement prescribes a minimum comment period of 75 days on certain
proposed rules, except when good cause is shown for a shorter comment
period (see 58 FR 69681, December 30, 1993).
    Here, the agency provided the public with 87 days to participate in
this rulemaking including 85 days to provide written comments and 2
days to present views at the open public forums. The agency does not
believe that any interested person has not been provided an adequate
opportunity to participate in this rulemaking. The agency received over
600 comments on the advanced notice of proposed rulemaking, more than
700 comments on the notice of proposed rulemaking. In addition, the
agency received oral views at the public forums and over 60 comments on
the draft codified provisions that the agency made available pursuant
to 21 CFR 10.40(f) and 10.80(d)(2). Given the number of comments the
agency received on the proposed rule, at the public forums, and on the
draft codified text, the agency does not agree that it should issue an
interim final rule under the APA to give the regulated industry
additional time to comment on the final rule.
    (Comment 104). FDA, on its own initiative, has revised the
``authority'' citation for the rule to include section 403 of the act.
Section 403 of the act applies to misbranded foods and is relevant to
this rule because of the required cautionary statement.

III. Description of the Final Rule

    As mentioned earlier, the final rule states that proteins derived
from mammalian tissues are a food additive subject to section 409 of
the act. Consistent with the definition of ``food additive'' in section
201(s) of the act, FDA's determination that protein derived from
mammalian tissues for use in ruminant feed is a food additive also is a
determination that this use is not GRAS. Section 589.2000(a)(1) defines
``protein derived from mammalian tissues'' as being any protein-
containing portion of mammalian animals, excluding blood and blood
products, gelatin, inspected meat products which have been cooked and
offered for human food and further heat processed for feed (such as
plate waste and used cellulosic food casings), milk products, and
products whose mammalian protein consists entirely of porcine or equine
products. In general, the exclusions represent tissues that the
available data suggests do not transmit the TSE agent or were, at one
time, inspected by the FSIS and found fit for human consumption and
further heat processed for feed use or tissues from pigs and horses
that are slaughtered in single species slaughter facilities.
    Section 589.2000(a)(2) defines ``renderer,'' in part, as any firm
or individual that processes slaughter byproducts, animals unfit for
human consumption, or meat scraps.
    Section 589.2000 (a)(3) and (a)(4) define the terms ``blender'' and
``feed manufacturer'' respectively. These definitions are essentially
unchanged in the final rule.
    Section 589.2000(a)(5) defines ``nonmammalian protein'' as
including proteins from nonmammalian sources. This definition
corresponds to the final rule's mammalian-to-ruminant prohibition.
    Section 589.2000(a)(6) defines ``distributor.'' This term was
initially part of Sec. 589.2000(a)(4) but is now a separate definition
to clarify that a distributor does not have to be a feed manufacturer
and that persons who transport feed and feed ingredients intended for
animals are distributors.
    Section 589.2000(a)(7) defines ``ruminant'' to provide an

[[Page 30963]]

understanding as to what animals are ruminants.
    Section 589.2000(b) declares that protein derived from mammalian
tissues for use in ruminant feed is a food additive under section 409
of the act. While not stated in the rule itself, FDA's food additive
determination is a determination that this use is not GRAS. The final
rule states that use of such proteins in ruminant feed will cause the
feed to be adulterated and in violation of the act unless it is the
subject of an effective notice of claimed investigational exemption for
a food additive.
    Section 589.2000(c) describes the principal requirements for
renderers. The provision differs from the proposed rule in two
principal respects. First, Sec. 589.2000(c)(1)(i) requires products
that contain or may contain mammalian proteins to bear a label stating,
``Do not feed to cattle or other ruminants.'' This statement is more
concise than the statement in the proposed rule and identifies cattle
as ruminants. Second, Sec. 589.2000(c)(1)(ii) requires renderers to
maintain records sufficient to track the receipt, processing, and
distribution of materials. This provision differs from the proposed
rule by addressing the type of information FDA requires rather than
referring to a specific type of record. The remaining paragraphs in
Sec. 589.2000(c) provide for exemptions from the labeling and
recordkeeping requirements if the renderer uses a manufacturing method
validated by FDA for deactivating or detecting the TSE agent or a
process that minimizes the risk of the TSE agent entering the product
or if the renderer uses a permanent method, approved by FDA, to mark
the feed to indicate that it contains or may contain protein derived
from mammalian tissue.
    Section 589.2000(d) describes the principal requirements for
protein blenders, feed manufacturers, and distributors. These persons
are subject to the same labeling and recordkeeping requirements as
renderers, except that, under Sec. 589.2000(d)(4), pet food products
that are sold or intended for sale at retail and feeds for nonruminant
laboratory animals do not have to be labeled with the statement, ``Do
not feed to cattle or other ruminants.'' Pet food products and feeds
for nonruminant laboratory animals that are sold as distressed goods or
salvaged are, however, subject to the labeling requirement. Section
589.2000(d) also provides exemptions if animal products are purchased
from renderers that certified compliance with the requirements
pertaining to methods for deactivating or detecting the TSE agent or if
the protein blender, feed manufacturer, or distributor complies with
such requirements itself. Another exemption exists if protein blenders,
feed manufacturers, and distributors purchase animal protein products
that are marked in accordance with the regulations or mark such
products themselves.
    Section 589.2000(e)(1) sets forth requirements for persons that
intend to separate mammalian and nonmammalian materials. This requires
compliance with the labeling and recordkeeping requirements, requires
renderers that intend to separate these materials to obtain
nonmammalian or pure porcine or equine materials only from single-
species slaughter facilities, and requires persons to avoid commingling
and cross-contamination with mammalian materials. The provision further
requires persons to maintain written procedures specifying the clean-
out procedures to prevent carry-over of mammalian protein into ruminant
feed and the procedures for separating materials from the time of
receipt to the time of shipment. Section 589.2000(e)(2) provides for
persons to be exempt from applicable requirements in paragraph (e)(1)
if they meet the exemption criteria in paragraph (c)(2), (c)(3),
(d)(2), or (d)(3). Persons meeting the exemption criteria in paragraph
(c)(3) or (d)(3) are exempt only from the recordkeeping requirements in
paragraph (e)(1). Such persons must continue to comply with the
labeling requirement in paragraph (e)(1).
    Section 589.2000(f) contains recordkeeping requirements for
establishments and individuals that feed ruminant animals. Under the
final rule, these requirements would apply only for feed or feed
ingredients containing animal protein products.
    Section 589.2000(g) states that animal protein products and feeds
containing such products that do not comply with the regulation will be
deemed adulterated or misbranded under the act.
    Section 589.2000(h) contains the inspection and record retention
requirements. The record retention period is 1 year under the final
rule.

IV. Environmental Impact

    The ``Environmental Impact'' discussion in the preamble to the
proposed rule summarized the agency's environmental assessment (EA) and
its analysis of the 6 regulatory alternatives (see 62 FR 552 at 571).
The agency considered each alternative under 2 different scenarios;
under one scenario, BSE does not occur in the United States, and, under
the other scenario, BSE does occur in the United States. The discussion
described the range of environmental impacts for the alternatives,
including environmental effects from on-farm disposal of animals and
landfill use, and concluded that the proposed rule would not have a
significant impact on the human environment.
    FDA received several comments on its environmental analysis.
    (Comment 105). One comment questioned the safety of burial as a
method for disposal of TSE- infective animals and whether burial should
be allowed as a method for disposal of dead stock (as discussed in the
agency's EA).
    There is no current disposal method for TSE-infected tissues shown
to completely remove all infectivity. FDA recognizes that one report
(Brown and Gajdusek, 1991) found that buried scrapie-infected tissue
may still be infective after 3 years, although infectivity was reduced
by 2 to 3 logs by this exposure.
    Migration of prions from burial sites is expected to be minimal.
Prions, as proteinaceous materials carrying electrostatic charges, are
unlikely to move with water through soil media, but are apt to be
adsorbed to clay particles. This is supported by the Brown and Gajdusek
(1991) (Ref. 13) observation that ``no infectivity was detectable in
the lower layer of soil 4-8 cm beneath the bottom of the dish.'' In
other words, little leaching of the scrapie infective agent was found.
This method of disposal, burial, is the method accepted by APHIS for
disposing of scrapie infected sheep and goats in the United States.
    Secondly, most on-farm dead stock die from causes other than TSE's,
and FDA does not expect that cattle dead stock will include significant
numbers of cattle that died from BSE. BSE has not been found in the
United States, and this final rule puts into place procedures that will
limit the spread of any cases that might occur undiagnosed in the
ruminant population.
    Third, States and localities regulate burial of animals, and, in
areas where burial is inappropriate due, for example, to high water
table or inappropriate soil type, these laws would prohibit burials.
The final rule does not require burial of dead stock. Burial is merely
an option to be considered where State and local authorities permit it.
    Burial of dead stock has limitations in that it requires resources
to dispose of dead stock as a waste rather than to produce useful
products. However, at this time, there is no evidence that burial of
animals that are susceptible to

[[Page 30964]]

TSE's, in accordance with existing State and local controls, is
inherently more environmentally unsafe than incineration, composting,
or rendering.
    (Comment 106). Several comments requested that the agency prepare a
formal environmental impact statement (EIS) under the National
Environmental Policy Act in addition to the Finding of No Significant
Impact and Environmental Assessment (FONSI/EA) that was prepared in
support of the proposed action.
    A primary difference between the EA prepared in this instance and
an EIS is the administrative process that was followed. Both documents
are objective analyses that focus on significant environmental issues
associated with the proposed action and possible alternative actions.
The EIS process, however, is a more formal process that includes
issuance of a notice of intent describing the proposed action and
possible alternatives, convening of optional public forums to identify
(``scope'') environmental issues of concern to the public, preparation
of a draft EIS that is filed with the Environmental Protection Agency
and distributed to the public for comment, preparation of a final EIS
describing how the comments were considered, and preparation of a
concise public record of decision describing the weight that
environmental effects were given in the decision making.
    As part of the Advanced Notice of Proposed Rulemaking on May 14,
1996, FDA requested environmental information to assist the agency in
determining the scope of issues to be addressed and the significance of
environmental issues related to the full spectrum of possible actions
being considered by the agency. FDA then solicited comments on the
FONSI/EA as part of the proposed rule that appeared in the Federal
Register on January 3, 1997. At the same time, FDA made the FONSI/EA
available on the Center for Veterinary Medicine's (CVM's) ``Home
Page,'' in addition to the traditional means of availability, in order
to facilitate submission of additional information through comments to
the docket established for the proposed rule. Furthermore, FDA held
public meetings on February 4 and 13, 1997, where comments on the
FONSI/EA were solicited, and placed transcripts from those meetings on
the CVM Home Page, as well as in the docket, to facilitate commenting.
The preamble to the proposed rule and this preamble to the final rule,
like the record of decision prepared for an EIS, discuss how
environmental issues were weighed in the decision.
    Consistent with the National Environmental Policy Act and the
Council on Environmental Quality's regulations, FDA discussed in its EA
and FONSI the need for action, significant environmental issues, and
alternative actions, and carefully listed the sources of information
and methods used in preparing the EA. The agency took a hard look at
the environmental consequences of its proposed action and the
alternatives before deciding that an EIS was not required. FDA
encouraged and facilitated public involvement, requesting information
and soliciting public comment on all issues involved with this
rulemaking, including environmental issues. Given the rigor of FDA's EA
and the steps taken to involve the public and the limited benefits from
a more searching evaluation, the time and expense of preparing an EIS
are not commensurate with the likely benefits of preparing such a
document (see River Road Alliance v. Corps of Engineers, 764 F.2d 445,
449 (7th Cir. 1985) (``The statutory concept of `significant' impact
has no determinate meaning, and to interpret it sensibly in particular
cases requires a comparison that is also a prediction; whether the time
and expense of preparing an environmental impact statement are
commensurate with the likely benefits from a more searching evaluation
than an [EA] provides.''), cert. denied, 475 U.S. 1055, (1986).
    (Comment 107). Several comments made FDA aware of some potential
environmental impacts that could be mitigated, and these mitigations
were integrated, where consistent with other factors, in the final
action. The final rule excludes certain items, such as blood and
gelatin, from the definition of ``protein derived from mammalian
tissues'' and these excluded materials may be used in ruminant feed as
well as feed for other species. Thus, materials excluded from the final
rule have a reduced potential to become wastes. Plate wastes, used
cellulosic food casings, and pure porcine or equine products are all
examples of materials that are allowed in cattle feed that would not
have been allowed under the mammalian-to-ruminant ban described in the
proposed rule which was broader than the mammalian to ruminant ban in
this final rule. These materials should now be fully utilized instead
of presenting potential environmental issues relating to disposal.
    As a result of comments on the proposed rule, the final rule does
not require a cautionary statement on labeling of pet foods at the
retail level. Thus, there is no longer the potential for consumers to
misinterpret the cautionary statement and incorrectly deduce from the
labeling a safety problem for pets. In the absence of the potentially
confusing cautionary statement on pet food at the retail level, it is
now not expected that meat and bone meal would be dropped from pet food
formulations. Consequently, the demand for meat and bone meal derived
from ruminants should not be significantly decreased in the pet food
industry.
    Therefore, certain anticipated environmental issues will not be
realized because of the changes to the action that appear in this final
rule, compared to both the proposed rule and the mammalian-to-ruminant
alternative originally described. These changes are the consequence of
comments received on the proposed action.
    (Comment 108). Comments from the rendering industry, in particular,
desired a more quantified environmental analysis of the potential
impacts of the actions covered in the EA. These comments were
especially concerned about the amounts of dead stock that might no
longer be rendered due to an anticipated decrease in the value of meat
and bone meal derived from ruminants and, consequently, in the value of
raw materials used to make the meat and bone meal.
    Some quantities of dead stock were estimated in a report (the
Sparks Report) presented in the comment from the National Renderers
Association; however, other comments only spoke in generalities about
the issue without providing information that could be used in the
requested quantification.
    The Sparks Report (Table III-1, p. 10) estimated that 1.1 billion
pounds (lb) of dead cattle are collected from all sources and rendered
each year. Presumably, dead sheep, goats, and deer are included in the
190 million (m) lb that are collected from ``Other'' species in the
Sparks Report. It is not known with certainty whether these estimates
represent a large percentage of all ruminant dead stock, as such
information is not reported and was not submitted in comments despite
requests from FDA. However, some rough calculations can be used to make
an estimate. There are approximately 100 m cattle of all ages in the
United States at any time. If the overall mortality rate on the farm
(i.e., for reasons other than slaughter) is 5 percent per year, then
this would result in 5 m dead cattle of all ages available for pick up
by renderers each year. If the average weight for a dead cattle carcass
(across all age groups) is 650 lb, then the total weight of dead cattle
that could be potentially retrieved by renderers each

[[Page 30965]]

year is 3.25 billion lb. Based on this estimate, then renderers are
currently retrieving about one-third (by weight) of the available dead
cattle that could be rendered. This also indicates that about two-
thirds of the available dead cattle are currently being disposed of by
means other than rendering. If one assumed a mortality rate higher than
5 percent or a larger standing population of cattle, then renderers
would be picking up a smaller proportion.
    FDA did not receive any comments containing first hand information
indicating that the current unretrieved dead stock are being disposed
of in an unsafe manner, and the agency has no independent information
to this effect. Methods that are available in some, but not all
locations include burial, as discussed above, landfilling, and
composting (often for animals smaller than 300 lb). In some locations
(such as on range land), animals that die may be left exposed. A small
number of farms may own or have access to an appropriately designed
incinerator. State and local regulation affects the availability of
disposal options. While rendering is a desirable option for disposal of
dead stock, it is not the only acceptable option.
    The comments provided no basis to estimate the final rule's effect
on the retrieval of dead stock by renderers. The agency's economic
analysis (which appears later in this document) accepts estimates that
the value of meat and bone meal may decrease by $68 per ton. While this
price is still profitable, it is possible that there may be some
disruption in dead stock retrieval from small producers while the
rendering industry adjusts to the new prices. For the sake of
discussion, FDA assumes that the upper limit on this temporary decrease
in dead stock retrieval could be 20 percent. Twenty percent of 1.1
billion lb is 220 m lb, or at an estimated 650 lb per carcass, about
340,000 fewer cattle picked up, against a background of 5 m dead cattle
per year.
    The estimated, temporary, 20 percent decrease from the current
level of dead stock retrieval is probably an overestimate. First, the
final rule takes steps different from the proposal to encourage the
continued use of ruminant products in acceptable animal feed
applications. For example, the final rule eliminates potentially
confusing labeling in pet foods at retail. Second, protein supplements
manufactured from dead stock are expected to remain in strong demand,
especially from countries that remain BSE free and have taken
precautionary steps to minimize the potential for its amplification
through the food chain. (In other words, a strong market will exist
because foreign buyers will be confident in the safety of rendered
products from the United States.) Meat and bone meal today in the
United States is worth more than before FDA published the advanced
notice of proposed rulemaking in May 1996. Third, trends in feedlots
and dairies in the United States have been towards larger facilities.
Large facilities, because of the larger population of animals, generate
the most dead stock. This centralized location is efficient for
renderers to retrieve dead stock, as opposed to traveling a collection
route among smaller farms. In many locations, owners of large feedlots
and dairies are currently being paid by renderers for their dead stock.
Even if the credit for dead stock were erased, large facilities would
likely still find it convenient to use rendering as the disposal option
for their dead stock. Fourth, cattle producers would still demand
protein and mineral supplements derived from animal sources, for
example blood meal, poultry meal, and pure porcine or equine meat and
bone meal. Therefore, continued demand for animal protein products by
ruminant producers will contribute to overall demand for animal protein
products, including those affected by the final rule, for use in feed
of all species of animals. Lastly, mammalian-derived protein affected
by this rule is still expected to be profitable to produce and to sell.
Adjustments by renderers to buy additional equipment and incorporate
new procedures are expected to proceed rapidly during the delayed
effective date for this rule.
    For the reasons stated above, any decreases in dead stock retrieval
from farms that occurs as a result of disruptions caused by this final
rule should be short term and small in magnitude. Long term trends will
continue to encourage use of dead stock as a feed ingredient raw
material.
    Outside of these types of estimations, quantifications of the
environmental benefits and costs of any of the regulatory alternatives
including ``No Action,'' are not feasible with the quality of
information currently available. Much needed information, for example
the dead stock issue above, appears to be unavailable. Other
environmental benefits and costs rely on chains of events occurring
where there is considerable uncertainty. These uncertainties are
detailed in the EA, consistent with the guidance in 40 CFR 1502.22 of
the Council on Environmental Quality's regulations.
    FDA will continue to be receptive to information that could assist
in a better quantification of impacts and will use such information in
considering what amendments, if any, should be made to the final rule
in the future. FDA has a continuing interest in this matter, as
environmental costs of disposal alternatives for dead stock will be a
major consideration in the event that BSE is ever found to be
established in the U.S. cattle population. Remedial actions by FDA,
alone and in concert with other agencies, at such a time will be
considered separately for potential environmental impacts.
    The potential long term and short term environmental effects of the
final rule are qualitatively similar, perhaps intermediate in magnitude
when compared with the proposed ruminant-to-ruminant ban and the
alternative mammalian-to-ruminant ban described in the EA. These
potential effects were compared at Table 1 of the EA, pages 63 and 64.
Because the potential environmental impacts of the final rule are
bracketed by these two alternative actions that were considered equally
in the EA, because a hard look at the consequences of both alternatives
led to a finding of no significant impact, and because additional
information was not submitted or identified that would improve the
quantification of the EA, FDA does not believe that it is necessary to
further amend the EA apart from the clarifications to the analysis
found in this Environmental Issues section of the preamble to the final
rule.
    (Comment 109). Several comments asserted that there would be large
increases in the quantity of dead stock and offal requiring disposal
and questioned the environmental safety of landfilling as a disposal
method. One comment stated that landfilling of dead stock was not
permitted in some areas. Another comment objected to the use of
landfills for the disposal of offal or carcasses. No comment provided
supporting details or other information on this issue.
    Similar to the situation with burial of dead stock as a disposal
method, landfilling is not available as a disposal method where State
or local authorities do not permit it. This final rule, however, does
not require disposal of dead stock or offal by landfilling, although it
may be an option in some areas. Where landfilling is an option, there
is no reason to suspect that this means of disposal is unsafe. FDA did
not receive any comments from a State environmental office or local
landfill or waste control authority on this issue or any related issue.
    FDA expects that, to the extent that landfilling occurs due to a
decrease in the retrieval of dead ruminant stock by renderers, the
increased use of landfill

[[Page 30966]]

space for disposal of dead stock would be small and temporary. In any
event, as discussed above, it is evident that the majority of dead
ruminant stock is currently being disposed of by means other than
retrieval by renderers and that such means includes landfilling.
    As for offal, the agency does not anticipate that there will be any
significant reduction in the collection of offal by renderers. Thus,
there should be no significant increases in landfilled offal resulting
from this rule. Hide and tallow provide significant economic incentive
for continued collection and rendering of offal and carcasses whether
or not the protein products have greater or lesser value.
    (Comment 110). Some comments claimed that there will be adverse
effects to the environment because of changes in disposal practices at
small locker plants and grocers.
    As markets adjust to the rule, FDA believes that there may be a
temporary, small decrease in the pickup by renderers at small locker
plants that process ruminants (i.e., there will be a corresponding
small increase in material disposed of by composting, by on-site
burial, by incineration and in local landfills). Additionally, because
the rule should enhance the value of rendered ruminant products from
the United States on the world market, FDA believes that most of the
anticipated increase in disposal by means other than rendering at small
locker plants will be temporary (see also discussion relating to
retrieval of dead stock, above, for a discussion of additional factors
that, in the long term should support the value of raw materials used
to make animal protein feed ingredients).
    FDA believes that fat trimmings and out-of-date meat are the major
products picked up by renderers at most small grocers. Because fat,
tallow, and grease are not affected by this rule and most out-of-date
meat is collected with these materials at grocers, renderers will
continue to pickup virtually all material from small grocers. Thus, FDA
foresees minimal, if any, adverse environmental effects from this rule
on small grocers.
    (Comment 111). Other comments inquired as to the environmental
effects when feeds containing ruminant proteins must be disposed
because they cannot be sold. This would primarily involve feed
formulated especially for ruminants.
    This final rule becomes effective on August 4, 1997. Furthermore,
as stated earlier in this document, FDA intends to permit persons to
exhaust existing supplies of products that were manufactured before
June 5, 1997, but this period should not exceed October 3, 1997. Thus,
at this time, FDA foresees minimal, if any, disposal or reconditioning
of feed required by this rule.
    (Comment 112). Several comments raised concern that poultry, as
consumers of ruminant-derived meat and bone meal, may excrete intact
prions in chicken litter. This litter could later be spread on crops,
causing an unexpected contamination of vegetables. Some comments also
noted that chicken litter is sometimes recycled as a cattle feed and
could therefore serve as a source of TSE for ruminants. The source of
this concern appears to be a hypothesis offered by Clarence Gibbs in
his testimony to the House of Representatives' Subcommittee on Human
Resources and Intergovernmental Relations on January 29, 1997.
    FDA has no evidence, other than Clarence Gibbs' statement, that
would indicate that infective ruminant prions survive the chicken
intestinal tract and/or the composting process. Such a hypothetical
route of transmission would appear to be of more immediate importance
in countries where BSE has been diagnosed.
    To FDA's knowledge, none of the countries where BSE is present have
reported the presence of prions in poultry litter. FDA is not aware of
any epidemiologic evidence that associates BSE with the incorporation
of poultry litter in cattle rations or on crop land. In Suffolk sheep
with scrapie, there is no detectable infectivity in the feces (see
Bulletin of the World Health Organization, 70(2):183-190 (1992)). This
is the only report, to FDA's knowledge, of testing of TSE infectivity
in feces of any species. FDA will continue to monitor scientific
developments in this area for findings clarifying this issue.
    (Comment 113). One comment, with little explanation, disagreed with
the agency's environmental analysis and suggested that FDA consult the
Environmental Protection Agency (EPA) ``to accurately assess the
impact.''
    Consistent with the National Environmental Policy Act and the
Council on Environmental Quality's regulations, FDA maintains an
interdisciplinary staff of scientists with broad expertise in EA
methodology, animal disease and nutrition, the feed industry, and
animal and agricultural waste management. FDA used this expertise in
preparing the EA for this action. FDA is not required to involve EPA in
the preparation of an EA.
    Nonetheless, FDA has extensive, long-standing contact with EPA at
scientific and managerial levels. The agencies cooperate in many areas
where there is a common mission or complementary expertise. The
development of the action described here began in the work leading up
to the 1994 proposed rule on scrapie in sheep and goats. FDA
coordinated its efforts with many groups in the USDA and the Centers
for Disease Control and Prevention to obtain the best expertise
available. FDA carefully considered whether EPA, by virtue of its
expertise or mission, needed to be involved in developing the EA or
other aspects of this action, and concluded that, because FDA already
uses EPA's environmental risk assessment paradigm, EPA's involvement
would not yield additional benefits to the analysis.

V. Analysis of Impacts

    FDA has examined the impacts of the final rule under Executive
Order 12866, under the Regulatory Flexibility Act (5 U.S.C. 601-612),
and under the Unfunded Mandates Reform Act (Pub. L. 104-4). Executive
Order 12866 directs agencies to assess all costs and benefits of
available regulatory alternatives and, when regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages, and distributive impacts and equity). The Regulatory
Flexibility Act requires agencies to examine the economic impact of a
rule on small entities. The Unfunded Mandates Reform Act requires
agencies to prepare an assessment of anticipated costs and benefits
before enacting any rule that may result in an expenditure in any one
year by State, local and tribal governments, in the aggregate, or by
the private sector, of $100,000,000 (adjusted annually for inflation).
    FDA concludes that this final rule is consistent with the
principles set forth in the Executive Order and in these two statutes.
FDA's analysis, as presented in the remainder of this section,
demonstrates that the final rule constitutes an economically
significant rule, as described in Executive Order 12866. The agency has
further determined that the final rule may have a significant economic
impact on a substantial number of small entities. This analysis,
therefore, along with the other relevant sections of this preamble and
the two reports of FDA's economics contractor, the Eastern Research
Group (ERG), constitute the agency's final regulatory flexibility
analysis as required under the Regulatory Flexibility Act. Because this
rule makes no mandates on government entities and will result in
expenditures of less than $100,000,000 in any one year, FDA need

[[Page 30967]]

not prepare additional analyses pursuant to the Unfunded Mandates
Reform Act.
    FDA presented a summary of its preliminary economic analysis in the
preamble to the proposed rule (62 FR 552 at 572). The summary discussed
the potential benefits of the proposed rule and described an industry
impact analysis conducted by FDA's contractor, ERG. In response, the
agency received many comments, both oral and written, which addressed
economic issues and concerns. Many industry comments criticized FDA's
analysis for underestimating the burden that the rule would impose and
for counting the economic gains as well as the costs in aggregating the
net impacts of the rule. Only a few comments spoke to the estimates
included in the benefits discussion. Although most industry comments
presented little quantitative information, a report prepared by the
Sparks Companies Inc. for the National Renderers Association, Inc., and
the Animal Protein Producers Industry provided detailed industry data
and alternative estimates of the regulatory burdens. FDA has examined
and evaluated the reasoning and data presented in all these comments
and has incorporated many of these elements into this revised analysis
of the final rule. (An addendum to ERG's preliminary cost analysis
presents the industry impact estimates in even greater detail.)

A. Need for Regulation

    In its analysis of the proposed rule, FDA explained that the need
for regulatory action is based on the risk that BSE will be established
and proliferate in the United States. In its guidelines for the
preparation of Economic Impact Analyses, OMB directs Federal regulatory
agencies to determine whether a market failure exists, and if so,
whether that market failure could be resolved by measures other than
new Federal regulation. In this instance, FDA determined that private
incentive systems for both suppliers and purchasers in markets for
cattle, rendering, and ruminant feed may inadequately address the risk
of BSE. The potential for market failure among suppliers in these
sectors results from the externality that could be created by
individual suppliers imposing economic hardships on other suppliers
within the industry. The potential for market failure among purchasers
results from the inadequate information that would be available to
purchasers of potentially infective products.
    With respect to suppliers, any renderer, feed manufacturer, or
cattle producer that permits animal protein derived from at-risk
mammals to be placed in ruminant feed increases the risk that other
renderers, feed manufacturers, or cattle producers will suffer the
severe economic consequences that would follow an outbreak of BSE in
the United States. Although the benefits of voluntary programs designed
to reduce or eliminate this risk accrue to all members of these
industries, compliance with these measures is incomplete, because
individual noncomplying members can avoid the costs of risk reduction
measures while still enjoying the benefits of compliance by others in
the industry.
    If purchasers could easily identify the risk of the infective agent
associated with products from specific suppliers, they could more
easily take defensive actions to reduce these risks (e.g., refusing
products from cattle known to have consumed specified ruminant
proteins). Purchasers are unlikely to obtain the information they need,
however, for several reasons. First, the long incubation period for BSE
creates a lag between the actual onset and the recognition of the
disease and could lead to a suboptimal level of risk prevention by the
concerned parties during the incubation period. By the time the first
signs of disease are observed, many animals may have been exposed.
Moreover, renderers sell their product to feed manufacturers who
frequently combine proteins from many different sources and animal
species to produce cattle feed. Ruminant producers, therefore, have no
sure way of knowing whether a particular batch of feed is free from
potentially infective proteins and cannot easily avoid purchasing risky
feed. Finally, if renderers or feed manufacturers do not believe that
BSE is an important threat, they may choose not to take preventive
action, regardless of the risk levels perceived by epidemiological
experts or consumers. FDA received no comments that directly questioned
the existence of this market failure.

B. Benefits

    The primary benefits of this regulation are the costs that would be
averted by reducing the risk that BSE will become established and
proliferate in the United States through feed. As described in FDA's
analysis of the proposed rule, a quantitative measure of these benefits
must consider three distinct factors: (1) The probability that, in the
absence of this rule, BSE would be established and amplified in the
United States through feed, (2) the costs, both direct and indirect,
that would be associated with the spread of BSE in the United States,
and (3) the extent to which this rule would reduce the likelihood of
these costs. FDA explained that it could not develop an overall
quantitative estimate of these benefits, primarily because it could not
adequately measure the first of these factors, the probability that BSE
would otherwise occur in the United States. While the agency determined
that the risk was positive, the available data were inadequate to
develop a quantitative risk assessment. The agency did, however, derive
a partial estimate of the potential direct costs that would result from
the proliferation of BSE in the United States (the second factor), and
present a strong qualitative assessment of the probable effectiveness
of the proposed rule (the third factor).
    For its estimate of the potential direct costs associated with the
outbreak and spread of BSE in the United States, FDA extrapolated from
the experience of the United Kingdom, but adjusted for certain
differences between the United States and the United Kingdom. The
relevant United Kingdom variables included the number of cattle that
had died from BSE (despite the implementation of a feed ban in that
country after BSE was identified) and the slaughter and destruction of
additional cattle considered to be at risk of BSE. Based on these
projections, FDA estimated that, if BSE were to occur in this country,
the disease would be associated with approximately $3.8 billion in
losses due to the destruction of BSE-exposed livestock and the taking
of other measures needed to prevent continued BSE proliferation. While
FDA could not quantify the expected additional costs to consumers and
producers in the United States that would result from the loss of
consumer confidence following a BSE outbreak, the agency found that
plausible scenarios indicated that the likely drop in the demand for
cattle and beef products could cause billions of dollars in lost market
values. In addition, FDA noted, but did not attempt to quantify, the
value of the human lives that might be lost or the associated medical
treatment costs that might follow a domestic outbreak of BSE.
    (Comment 114). One comment on the proposed rule stated that FDA
should modify its projection of the potential amplification and
subsequent proliferation of BSE in the United States, because FDA's use
of the United Kingdom's experience as a model is misleading and
exaggerates the real risk. The comment suggested that an

[[Page 30968]]

extensive epidemiological study be conducted instead, based on use of
ruminant proteins in ruminant feed over the past 50 years, to produce a
more accurate risk assessment.
    FDA does not believe that its projection was invalid or misleading,
because although the United Kingdom's and United States' cattle
industries are not identical, the United Kingdom experience provides
the most detailed and least speculative basis available for
understanding the potential impact of BSE on this nation's cattle
industry. FDA's methodology incorporated adjustments to reflect the
younger average age of United States cattle and the later age of first
exposure of United States dairy cattle to meat and bone meal. The
analysis concurred that, compared to the United Kingdom, a much lower
proportion of cattle in the United States would be at risk of
contracting BSE if an outbreak occurred. Nonetheless, because of the
delay between infection and identification, it found that a substantial
number of cattle in the United States could become infected before the
disease was contained.
    Although further epidemiological study on the use of mammalian
protein in ruminant feed (with exclusions) could provide useful
information, FDA believes that such a study would not significantly
alter the agency's conclusions, because the degree of infectivity at
various exposures to mammalian protein is not known. Moreover, only a
small part of the overall cost to industry of a BSE outbreak would
depend on the number of cattle actually infected. The greatest costs
would be associated with the measures that would be needed to restore
consumer confidence in beef and dairy products, and these measures
would be undertaken irrespective of the precise level of infectivity.
    FDA has, however, updated its estimates of the projected costs of a
BSE outbreak, based on: (1) The more recent estimates of the number of
United Kingdom cattle diagnosed with BSE (projected here at
approximately 169,600 cumulative BSE deaths through 1997); (2) the
current United Kingdom estimates of 1.3 m cattle culled by the end of
1996 to end the epidemic; (3) the more recent estimates of the size of
the United States cattle population (now estimated at approximately 101
m cattle); (4) the assumption that cattle at risk of BSE would require
disposal at a cost of $33 per animal, and that cattle with known BSE
could require medical-waste level incineration at a cost of $100 per
animal; and (5) the updated estimates of the costs of implementing a
feed ban at the time of a BSE outbreak (currently estimated, as
described below, at $52.9 m per year).
    FDA's revised calculation again addresses only three of the costs
that would be associated with the proliferation of BSE in the United
States: (1) The cost of direct livestock losses due to BSE infection,
(2) the costs associated with slaughtering at-risk cattle culled to
prevent BSE spread and restore consumer confidence, and (3) the costs
associated with imposing feed regulations at the time BSE was detected.
Recalculating BSE-related costs using the updated figures yields an
estimated present value for these three components of $93 m, $4.7
billion, and $593 m, respectively. In sum, these updated projections
yield an estimated present value of $5.3 billion in costs that would be
associated with the establishment and proliferation of BSE in the
United States through feed.
    Additional costs that could not be quantified include the lost
human lives and medical treatment costs that could result from BSE-
related disease, as well as the consumer and producer losses that would
result from the expected decrease in the sales and consumption of beef.
Sales of medical products and cosmetics containing cattle-derived
components could also be affected.
    (Comment 114a). One comment stated that a single case of BSE in the
United States would have an enormous impact on the American cattle
industry and that a 1 percent change in consumer purchases of cattle
products results in a $350 m impact on farm and ranch income. Other
comments stated that action must be taken to maintain consumer
confidence in meat products, and one estimated that, if BSE were
detected, first year costs to the economy would total $64 billion.
    Nevertheless, FDA is still unable to quantify the expected benefits
of this rule, because the agency cannot estimate the probability that,
in the absence of this regulation, BSE would occur and proliferate in
the United States.
    Moreover, to the extent that the rule will not completely eliminate
all chance of a BSE outbreak, the expected value of the potential
benefits is less than the expected value of the potential BSE-related
costs. Several comments pointed out that a lack of enforcement of the
proposed rule would greatly reduce its efficacy. FDA agrees that
adequate enforcement is critical to achieving the full potential
benefit of the rule, and, as discussed elsewhere, has attempted to
craft the rule in a way that will maximize its enforceability. Thus,
FDA believes that the vigorous implementation of this rule will very
nearly eliminate the risk of the widespread proliferation of BSE in the
United States.

C. Industry Impacts

    FDA has carefully examined numerous public comments that addressed
industry impacts of the proposed rule. In addition, FDA asked ERG to
prepare an addendum to its earlier impact analysis. This section
summarizes the ERG reports, responds to public comments related to the
analysis of industry impacts, describes the composition, size, and
scale of economic activity for the various affected industry sectors,
and presents FDA's estimates of the cost and market impacts of the
final rule and six other regulatory alternatives (see Table 1).

      Table 1.--Estimated Annual Affected Protein and Annual Costs of Alternative Regulatory Prohibitions 1
----------------------------------------------------------------------------------------------------------------
                                                            Mammalian-to-
                                                              ruminant,      Partial
             Annualized impacts               Mammalian-to-     with      ruminant-to-  Sheep/mink-  Sheep/goat-
                                                ruminant    exceptions 2    ruminant    to-ruminant  to-ruminant
                                                            (final rule)
----------------------------------------------------------------------------------------------------------------
Quantity of restricted meat and bone meal (m
 lb)........................................        6,086         5,031         2,283          16.9          0.6
Capital costs ($ m).........................          7.1           7.1           4.9            NA           NA
Plant Operating costs ($ m).................           20            20          26.9            NA           NA
Transportation costs ($ m)..................         10.7           7.5           5.3            NA           NA
Documentation costs ($ m)...................          0.3           0.3           0.2             0            0
Reformulation, reregistration and relabeling
 costs ($ m)................................          2.1           1.3             0            NA           NA
Feed substitution costs ($ m)...............          9.7             8           3.6            NA           NA
Disposal costs ($ m)........................           NA            NA            NA           5.1          0.2

[[Page 30969]]

Subtotal ($ m)..............................         49.9          44.3          41.1           5.1          0.2
Meat and bone meal revenue losses 3 ($ m)...        206.9           171          77.6           4.2          0.2
Nonruminant sector gains ($ m)..............       (196.6)       (162.5)        (73.7)           NA           NA
Aggregate net costs ($ m)...................         60.2          52.9          44.9           9.3         0.4
----------------------------------------------------------------------------------------------------------------
1 Totals may not match text due to rounding error.
2 Also reflects costs of proposed ruminant-to-ruminant rule.
3 Assumes $68 per ton decrease in price of affected meat and bone meal.

1. Summary of Impacts of Final Rule
    The final regulation prohibits the use of mammalian protein
(excluding pure porcine or equine protein and certain other materials)
in ruminant feeds. FDA estimates that the direct compliance costs of
the rule, including annualized capital and operating costs, will be
about $44.3 m per year. In addition, FDA has accepted an industry
forecast that the regulatory prohibition will lower the price of the
affected meat-and-bone-meal (MBM) by as much as $68 per ton, reducing
the initial value of this product to the rendering industry by $171.0 m
annually. In contrast, nonruminant animal producers may gain up to
$162.5 m in lower feed costs. Thus, FDA estimates that the aggregated
net annualized costs of this rule, accounting for both losses and
gains, will total $52.9 m. Renderers will pass much of the economic
burden of the new regulations upstream to meat packing operations,
which will incur increases in renderer charges (or declines in renderer
payments) of up to 1 percent of revenues. In turn, meat packers will
raise slaughtering fees and lower the price paid for slaughter cattle.
In the long run, these actions will result in a modest reduction in the
size of the affected animal herds.
2. Market Impacts
    a. Introduction to regulatory alternatives.
    The regulatory action selected by FDA is one of seven regulatory
alternatives examined by the agency, of which six would prohibit some
type of animal protein in ruminant feed, generating compliance costs
and revenue impacts on industry. The seven alternatives are, in order
of their regulatory stringency: (1) A prohibition on mammalian-derived
protein in ruminant feed; (2) the final rule, a prohibition of
mammalian proteins in ruminant feed, excluding protein exclusively from
porcine and equine sources, and selected other materials; (3) the
proposed rule, a prohibition on ruminant protein in ruminant feed; (4)
a prohibition on selected ruminant tissues, i.e., those believed most
likely to be infectious, in ruminant feed; (5) a prohibition on protein
from those species in which TSE has been identified, including sheep,
goat, deer, and mink in ruminant feed; (6) a prohibition on sheep and
goat protein in ruminant feed; and (7) a no action alternative, or an
agency position of watchful waiting. The estimated costs for five of
the alternatives are displayed in Table 1 of this section. (Estimates
for the third and seventh alternative as described above, are not
displayed, because the estimated costs for the third alternative (the
proposed rule) are almost identical to those of the second alternative
(the final rule), and the seventh alternative generates no regulatory
costs.)
    b. Quantities of offal and meat and bone meal affected.
    The regulatory alternatives are differentiated by the types of
animal protein prohibited in ruminant feed. The final rule will affect
the sale of protein generated from the annual slaughter or processing
of about 50 m animals. An estimated 5 billion lb of protein (see Table
1 of this section) is rendered from the animals and other protein
sources covered by the final rule. This rule is less inclusive than
Alternative 1, which would prohibit all mammalian protein in ruminant
feed and therefore restricts the sale of pure porcine or pure equine
protein as well. The final rule is similar in coverage to the ruminant-
to-ruminant alternative, which FDA had first proposed and most industry
comments addressed. The least restrictive regulatory alternative would
target only sales of sheep and goat offal, affecting minor quantities
of animal offal and protein. Alternative 7, under which the agency
takes no action but continues to monitor the health of U.S. herds, does
not affect the processing of animals.
    c. Affect on meat and bone meal prices.
    There was little disagreement within the public comments that the
first four regulatory alternatives, by prohibiting the sale of certain
types of meat and bone meal for use in ruminant feed, would cause
declines in the long-run equilibrium price of this product. The other
three alternatives were believed to have negligible effects on the
market for meat and bone meal.
    In its economic assessment of the proposed rule, FDA accepted the
estimate of its contractor (ERG) that the more restrictive alternatives
would cause a price decline for meat and bone meal of $25 to $100 per
ton. The size of the estimated range reflected considerable uncertainty
over the reaction of the affected markets to the new restrictions.
Nevertheless, even under the high market impact scenario, ERG forecast
that the market for meat and bone meal would reach an equilibrium
(i.e., quantity demanded would equal quantity supplied) at a positive
market price.
    A number of comments on the proposed rule addressed the estimated
decline in the price of ruminant-containing meat and bone meal. The
National Renderers Association commissioned a comprehensive study by
Sparks Companies, Inc. (SCI) to assess the regulatory impact on the
meat and bone meal markets. SCI developed an independent estimate of
the size and breadth of the agricultural markets affected by the
proposed regulation and estimated that 15 percent of meat and bone meal
is consumed by ruminant animals, compared to the 10 percent presented
in the ERG study. SCI considered questions relating to the disposition
and price of ruminant-containing meat and bone meal under the proposed
rule by analyzing the historical statistical relationship between meat
and bone meal and soybean meal and by conducting telephone interviews
with 30 executives

[[Page 30970]]

of affected industries. For its most likely scenario, SCI concluded
that ``all raw materials would continue to be rendered, and all
ruminant-containing meat and bone meal would be consumed by nonruminant
operations, though a price discount would be necessary to induce these
operations to purchase the additional quantities that otherwise would
have been used in ruminant feed.'' For this scenario, SCI estimated
that meat and bone meal prices would decline by $68.27 per ton, or
almost the midpoint of the $25 to $100 per ton range previously
estimated by ERG ($62.50 per ton).
    (Comment 115). A comment by a federation of American farm bureaus
predicted that the proposed ruminant-to-ruminant prohibition would
cause a fairly small price effect, but many other comments suggested
that the price of meat and bone meal would fall sharply due to the
perceived stigma that would be placed on the product. Most of these
comments, however, expressed strong opposition to the proposed rule's
labeling requirement, asserting that the proposed labels would generate
unwarranted public concern over the safety of meat and bone meal in pet
foods and, in turn, would significantly reduce the demand for meat and
bone meal by pet food manufacturers.
    FDA believes that it has alleviated this concern by exempting
retail pet food packaging from the labeling requirements of the final
rule.
    (Comment 116). One major feed industry association had initially
argued that meat and bone meal prices would fall to zero, triggering
large-scale disposal of the material and other economic impacts. These
comments, however, contained no market analysis for their forecast of
meat and bone meal prices. This association later acknowledged that its
forecasted price decline was an assumption.
    (Comment 117). One comment disagreed with FDA's position that a
lower meat and bone meal price would increase sales of meat and bone
meal to the nonruminant sector (62 FR 552 at 576). The comment claimed
that the poultry and swine industries cannot absorb 450,000 tons of
meat and bone meal (which would otherwise have been used for ruminant
feed) and that substituting meat and bone meal for other meal (such as
soybean meal) would adversely affect animal production.
    FDA disagrees with the comment because it failed to provide
information to demonstrate that the poultry and swine industries were
at their maximum use level for meat and bone meal. Moreover, the
comment did not consider the ability of the pet food industry to
include more meat and bone meal in its products. Given the expected
price reductions, the agency believes that these industries will find
it cost-effective to absorb the additional meat and bone meal.
    The comment also misconstrues FDA's position. The agency does not
expect meat and bone meal to serve as a total substitute for soybean
meal. Instead, FDA finds that the nonruminant sector will be able to
include more meat and bone meal in its formulations without the
negative effects predicted by the comment. For example, just a 1.5
percent increase of meat and bone meal in the diets of all swine in the
United States would absorb the entire excess.
    In the addendum to its final report, ERG explained that because
meat and bone meal can be readily substituted for other protein sources
in many uses, the resulting price decline for meat and bone meal could
be towards the lower end of its previously estimated $25 to $100 per
ton range. ERG acknowledged, however, that the price decrease could be
greater if large buyers of meat and bone meal for poultry feed or pet
food react adversely to public uncertainty or concerns about BSE
dangers. ERG also noted that such reactions could occur irrespective of
this rule in response to fears triggered by the presence of BSE in
Europe, or to new research findings of greater health risk. Since the
industry has not presented any data suggesting price declines outside
of the projected range of $25 to $100 per ton, ERG revised its analysis
to maintain the range, but used the approximate midpoint of $68 per
ton, as suggested by the SCI study, to project the probable industry
impacts.
    FDA has similarly adopted SCI's forecast of a $68 per ton decline
in the price of affected meat and bone meal as a basis for calculating
reasonable estimates of regulatory impacts. This estimate was derived
directly from discussions with industry representatives, is fully
consistent with the earlier analysis prepared by ERG, and no other
industry comment offered more persuasive, alternative data.
3. Costs of Compliance
    a. Direct costs.
    i. Documentation and relabeling costs
    The final rule requires renderers, feed manufacturers, and other
affected parties to perform specific recordkeeping and labeling
activities to demonstrate compliance. For its analysis of the proposed
rule, FDA had estimated that added recordkeeping, including relabeling,
would cost $1.5 m to $1.8 m per year. These estimates generated a
number of comments.
    (Comment 118). A representative of the AAFCO commented in public
hearings that relabeling costs had been underestimated because
necessary changes in the AAFCO definitions for certain collective terms
would involve more animal feed mixes than simply those containing meat
and bone meal. Specifically, the comment claimed that the proposed rule
would have necessitated a change in the AAFCO collective term ``animal
protein products'' which is used on bag labels and tags for products
containing proteins other than ruminant protein.
    Under the final rule, AAFCO will need to amend its definition of
the collective term ``animal protein products'' to identify those feed
ingredients that are prohibited from use in ruminant rations. FDA
intends to work with AAFCO on this matter. Although manufacturers of
ruminant feeds that use this collective term may need to reformulate
their rations, there should be no change required in the ingredient
list on the labels for any feed manufacturer that uses the ``animal
protein products'' collective term.
    (Comment 119). A number of industry associations expressed concern
about the market impact of the proposed labeling requirement,
particularly as it was potentially applicable to retail sales of pet
food that contain ruminant meat and bone meal.
    FDA agrees that the cautionary statement is not necessary on pet
food intended for retail sale, and the final rule eliminates the
requirement for pet food for retail sale.
    (Comment 120). Other comments expressed general concerns or made
suggestions about documentation and labeling requirements, but did not
provide specific information on costs.
    As shown in the addendum to its final report, ERG revised its
earlier estimates by distinguishing between relabeling and
documentation costs and changing its method of estimating relabeling
costs from per facility to per label costs. As shown in its addendum,
ERG also increased the projected number of feed mix reformulations that
would be necessary under the final rule. Although ERG determined that
it had previously undercounted the number of affected labels, the net
result of these changes yielded an annualized incremental cost for
relabeling, reregistration and reformulation of $1.3 m and an
annualized feedmill documentation cost of $0.3 m. FDA has included
these adjustments in its revised estimates of capital and operating
costs.
    ii. Plant and equipment costs.

[[Page 30971]]

    FDA does not expect renderers to invest in separate processing
lines for mammalian and nonmammalian tissues. ERG reported that large
packer/renderers process only a single animal species and will have no
incentive or use for separate processing lines. Independent renderers
were assumed to be too dependent upon mammalian animals and dead stock
to have sufficient economic rationale to invest in a separate
processing line for nonmammalian protein. The SCI report confirmed this
view by presenting a financial assessment of the investment that would
be needed by independent renderers to construct separate processing
lines for nonmammalian protein. This analysis concluded that renderers
would lose money by operating separate lines.
    ERG determined, however, that the rule is likely to prompt new
capital expenditures by certain feedmills. Many feedmills, including
some in areas with both cattle and hog production, now have storage bin
capacity for only one type of meat and bone meal. If the price of
affected meat and bone meal falls substantially, a number of feedmills
will choose to add storage bin capacity in order to carry both types of
meat and bone meal (i.e., containing protein from pure porcine and
mixed mammalian sources), so that the price discount for meat and bone
meal containing mammalian protein can be passed on to their hog-
producing customers. No comments questioned ERG's initial estimate that
1,000 major commercial feedmill operations would install a second meat
and bone meal storage tank to handle both restricted and unrestricted
meat and bone meal.
    (Comment 121). One comment from a major feed industry association
suggested that the ERG capital cost estimate of $50,000 per feedmill
for capacity expansion was too low.
    ERG had noted that this expenditure would be sufficient to add a
storage tank capable of receiving one and one-half truckloads of meat
and bone meal. This size (representing approximately 30 to 40 tons) is
economically efficient because it would allow a feedmill to receive a
full truckload of new product before exhausting the previous shipment.
Also, the National Grain and Feed Association (NGFA) estimated the cost
of capacity expansion at feedmills at $25,000 to $30,000. As such, FDA
has retained ERG's $50,000 estimate for feedmill expansion costs and
estimates the annualized capital costs of the final rule (discounting
over 10 years at 7 percent) to be $7.1 m.
    iii. Plant operating costs.
    ERG initially estimated the incremental operating costs of adding
new clean up procedures at each feedmill that handles both ruminant and
nonruminant protein to be $10,000 per year. FDA received no comments on
the accuracy of this estimate, which ERG derived from data provided in
the NGFA comments to the advance notice of proposed rulemaking. Thus,
FDA has retained this figure as the best available measure of the
incremental operating costs for these feedmills. Additionally, further
analysis contained in ERG's addendum concludes that the $10,000 annual
cost estimate should also be applied to the 1,000 major feedmills which
already have the excess capacity to handle both types of meat and bone
meal. This adds $10 m to the annual clean out cost estimate for
feedmills for a total of $20 m.
    iv. Transportation costs.
    In its analysis of the proposed rule, ERG had found that renderers
would incur incremental transportation costs to sell meat and bone meal
to new customers, many of whom might be in more distant regions, and
that feedmills and animal producers would purchase substitute feed
inputs, which sometimes would come from more distant suppliers.
Renderers were not assumed to incur incremental transportation costs
for the collection of animal tissue because, as noted, they were not
expected to separate animal offal and, therefore, would not change
their sources of animal tissue.
    ERG had allocated an average incremental transportation cost of $25
per ton for that portion of meat and bone meal (estimated at
approximately 500 m lb in ERG's initial cost analysis) that would be
displaced by the restrictions on ruminant feed. ERG had also allocated
$5 per ton of meat and bone meal to address incremental transportation
costs for feed substitutes. While these data were limited, these
amounts were considered overall averages sufficient to represent this
element of the regulatory impact.
    (Comment 122). A few comments noted that transportation costs could
be significant, but no comments provided specific estimates of expected
increases in transportation costs. One comment criticized the ERG study
for lacking analysis of specific regional transportation difficulties.
    FDA recognizes that ERG did not present a regional transportation
analysis and that renderers in regions most distant from prospective
new markets might incur relatively high transportation costs.
Nevertheless, no industry comment provided quantitative data on this
point or sufficient analysis to indicate that transportation costs
would be higher than that predicted. Therefore, FDA has accepted ERG's
methodology. Table 1 indicates that these compliance costs are
estimated at $7.5 m per year.
    v. Disposal costs.
    (Comment 123). A number of comments stated that renderers or
meatpackers would incur additional disposal costs if economic
conditions deteriorate to the point where animal offal or dead stock is
no longer rendered.
    As discussed above, FDA believes that these costs will be small,
because essentially all animal offal will continue to be rendered. The
agency agrees, however, that some incremental on-farm disposal of dead
stock may occur in response to increases in renderer pickup charges. As
explained below in the discussion of market adjustments, these
activities would not raise the agency's overall cost estimates.
    b. Indirect costs.
    i. Initial revenue losses.
    Table 1 summarizes the initial decline in meat and bone meal
revenues under the various regulatory alternatives. These estimates
were derived by multiplying the quantity of meat and bone meal affected
by the forecasted $68 per ton meat and bone meal price decline. As
shown, the final rule is expected to generate an initial revenue
decline for renderers of $171 m per year. The industry-sponsored SCI
study used essentially the same methodology and estimated the most
likely loss to renderers from the ruminant-to-ruminant prohibition at
$160 m. Both ERG and SCI predicted that most of these losses will be
passed back to suppliers of the raw materials.
    ii. Feed costs in ruminant sectors.
    The restriction on the use of mammalian protein (with exceptions)
in ruminant feed will require existing purchasers of this material to
substitute new feed ingredients. FDA's estimate of the cost of this
substitution effect was derived from an American Feed Industry
Association (AFIA)-sponsored analysis of feed price impacts. In this
analysis, Dr. Thomas Lenard calculated the costs of substituting
soybean and replacement minerals for ruminant meat and bone meal and
estimated a unit price increase of $0.01588 per pound of ruminant-
containing meat and bone meal replaced. Because Dr. Lenard assumed that
no meat and bone meal would be sold once the rule was in place, his
analysis applied this incremental feed substitution cost to all current
meat and bone meal consumption. Both the ERG and the SCI analyses,
however, concluded that it is

[[Page 30972]]

much more likely that meat and bone meal will continue to be sold for
nonruminant feed. Thus, FDA has rejected the assumption that additional
feed substitution costs will be incurred to replace all meat and bone
meal and has extrapolated the unit cost over only the 10 to 15 percent
share of mammalian meat and bone meal now consumed by cattle to
calculate an expected cost increase of $8.0 m per year.
    (Comment 124). Some comments expressed additional concern about the
cost of feed. Some mentioned higher prices for new dairy cattle feeds
than are derived using Dr. Lenard's unit cost estimates.
    These comments, however, did not provide sufficient data for FDA to
evaluate their assumptions and calculation methodologies. ERG attempted
to confirm the validity of one very high estimate of feed substitution
costs, but that comment could not verify the factors used in the
estimate. Thus, FDA has retained the AFIA unit cost increment to
support its $8.0 m estimate for feed substitution costs.
    iii. Feed costs in nonruminant sectors.
    The forecasted decline in the price of restricted meat and bone
meal will reduce feed costs for those sectors, such as poultry and hog
producers and pet food manufacturers, that will continue to use the
product. As shown in Table 1, FDA forecasts that these feed cost
savings will be $162.5 m per year under the final rule. The estimated
savings to these purchasers are slightly less than the estimated
revenue decline for producers of ruminant meat and bone meal, because
the meat and bone meal will be somewhat less efficient in these uses.
    (Comment 125). Only a few comments noted that the nonruminant
sectors would gain from the decrease in ruminant-derived meat and bone
meal prices, and no quantitative estimates of such savings were
provided to the agency. A number of comments, however, suggested that
these cost savings not be used to offset costs to other sectors.
    As discussed below, FDA believes that the societal perspective
appropriate for agency analyses of federal regulations must consider
significant impacts on all affected sectors. FDA is fully aware,
however, that any gains to the nonruminant sectors will not reduce the
regulatory burden imposed on the rendering, livestock feed, and cattle
industries. These sectors will experience significant costs and revenue
reductions.
    iv. Distribution of costs and revenue losses by sector.
    (1) Initial impacts.
    (Comment 126). Many comments raised questions about the
distribution of the economic impacts of the regulatory alternatives. A
number noted that FDA summed the revenue impacts across sectors and
asserted that FDA was concerned only with the aggregate size of the
combined cost impacts and not with the separate impacts on each
agricultural sector. Actually, FDA aggregated the cost impacts for the
purpose of providing a concise and comprehensive accounting of the
societal impacts, as is normally performed for regulatory analysis.
    FDA estimates that the final rule will impose total annualized
direct compliance costs of $6.3 m on rendering facilities, $30.0 m on
feedmills, and $8.0 m on ruminant producers. Renderers will also incur
an initial revenue decline of $171.0 m per year which will be largely
passed on to other agricultural sectors. As noted, producers of
nonruminant animals and other purchasers of meat and bone meal
containing mammalian protein will benefit from a decline in feed prices
of $162.5 m per year.
    (Comment 127). Many comments expressed concern that FDA had not
adequately considered the economic impact on their particular industry.
    FDA notes that the preamble to the proposed rule included only a
summary of the ERG final report. That ERG report, as well as the more
recent addendum, addresses the economic impacts on all of the affected
sectors.
    (2) Market adjustments.
    (Comment 128). Several comments noted that renderers will endeavor
to pass the majority of the revenue losses to others in the
agricultural market.
    FDA finds that the affected markets will adjust to this rule in
numerous ways. The primary adjustments are: (1) Renderer payments for
raw materials will decrease, and charges for rendering services, such
as dead stock pickup, will increase; (2) meat packing plants will
reduce prices paid for cattle, and small meat packing plants, often
referred to as locker plants, will increase charges for custom
slaughtering services; (3) ruminant animal producers will pay increased
feed prices as they substitute other protein sources for meat and bone
meal; and (4) ruminant and other affected livestock producers will
decrease their demand for grazing lands in the long run, in response to
the decline in the value of cattle and other affected livestock.
    Renderers will experience the greatest initial lost revenues, but
these losses will largely be passed on back to the meat packers and
animal producers that supply the raw materials. SCI explained that most
renderers have contracts with raw material suppliers that link prices
paid for animal tissue to publicly available information on the price
of meat and bone meal. Its analysis reported that:

    Although the rendering industry will be on the front lines of
any cost shock emanating from the FDA regulation, the economic
impact eventually would be distributed among the individuals and
companies that form the marketing chain for cattle (ruminants) and
derived products--affecting cattle producers, beef packers, meat
fabricator/processors, and renderers unevenly. The costs will not
disappear as they make their way down the marketing chain; rather,
they will be shared.

    FDA agrees with this assessment, but finds that the rendering
industry will continue to incur negative impacts due to the gradual
decline in raw material throughput and the other costs and incremental
marketing expenses associated with the rule.
    (Comment 129). Some comments claimed that renderer pickups of
animal offal would cease, arguing that the regulatory impacts would
make meat and bone meal unmarketable. Others predicted that the
regulatory impacts would create substantial disposal costs. A number of
comments noted that local landfills will not accept animal offal or
dead stock.
    As noted above, both ERG and the industry-sponsored study by SCI
predicted that ruminant-derived meat and bone meal will most likely
continue to be marketed, albeit at lower prices. Thus, FDA expects that
renderers will continue to pick up animal offal from nearly all of
their raw material suppliers, negating the need for substantial new
disposal costs for animal offal.
    Nevertheless, as discussed in the previous section on environmental
impacts, a move by renderers to raise pickup fees may reduce the number
of dead animals supplied to renderers. ERG found that this effect is
likely to be strongest among those small-scale animal producers that
could respond to increased renderer charges by simply dragging animals
off to remote areas and leaving them. In comparison, the larger
operations were thought less likely to change management practices in
response to a decline in renderer payments (or an increase in pickup
charges) for dead animals, because of limitations on available land or
other complications involved with changing methods for managing dead
stock disposal.
    ERG found that the costs reflected in Table 1 of this section imply
a drop in

[[Page 30973]]

the market value of protein in animal carcasses of about $2 per calf or
pig, and up to $7 per head for a 900-lb cow. Thus, although some
renderers may raise their pickup fees by amounts that cause the loss of
some dead stock, such fee hikes would be unprofitable, and therefore
unlikely, if the resulting loss to the renderer exceeded $2 per calf or
pig, or $7 per cow. As a result, the costs included in Table 1 reflect
an upper bound estimate of the regulatory costs and any subsequent
market adjustments will serve only to redistribute or potentially
reduce these costs.
    Other sectors will also adjust to these impacts by raising fees or
reducing payments. ERG calculated that a $68 decline in the price per
ton of meat and bone meal implies a 3.4 cents per lb decline in the
value of protein from current values of around 15 cents per pound. Most
meat packing plants are likely to pass this loss on to customers
through an increase in the charge for slaughtering, although some small
locker plants may have difficulty. Manufacturers of ruminant feeds will
shift increased costs to ruminant producers, who could face feed price
increases of 1.6 cents per pound of meat and bone meal replaced. Other
sectors, however, will gain by these market adjustments. For example,
nonruminant producers will experience lower feed prices and hog
producers are likely to see a small increase in slaughter values as
increases in porcine meat and bone meal prices increase the value of
hog offal.
    In the long run, each adversely affected sector will experience
some cost impacts that cannot be passed on. Renderers will experience
lower raw material throughput to the extent that fewer animals are
slaughtered and more dead stock remain unrendered. Meat packers will
see a reduced supply of slaughter animals due to the lower prices paid
for cattle and the increased charges for custom slaughtering services.
Livestock producers will make modest reductions in the size of their
herds because of the reduced animal prices. If the predominant part of
the decline in the value of meat and bone meal is passed back to cattle
producers, the value of cattle would fall by roughly $3 per head (about
one-half of one percent). One official of a major cattleman's
association acknowledged that the high range cost estimate could result
in a cost to cattle producers of $6 a head, but recognized the need for
regulation and explained that, ``[w]e made a commitment to incur this
cost.''
    v. Additional small business impacts.
    (1) Statement of purpose and objectives of the final rule.
    The Regulatory Flexibility Act requires that agencies present a
succinct statement of the purpose and objectives of any rule that will
have a significant effect on a substantial number of small entities. As
explained earlier in this document, FDA is instituting this rule to
reduce the risk of BSE becoming established and amplified in the United
States through feed. Existing epidemiological evidence suggests a link
between the incidence and proliferation of BSE in the United Kingdom
and the practice of feeding mammalian proteins to cattle. This rule
prohibits that practice. Thus, the need for regulatory action is based
on the need to prevent the spread of BSE among the nation's livestock.
    (2) Description of the affected small entities.
    Most businesses in the affected agricultural industries are small,
as defined by the standards used by the Small Business Administration
(SBA). SBA provided information to FDA on the employment size of
businesses in several of the affected sectors. SBA noted that 86.9
percent of the businesses in the Animal and Marine Fats and Oils
Industry (which encompasses animal rendering) employ fewer than 500
employees. In the meat packing industry and sausage and other prepared
meats industries, 96.1 percent and 93.3 percent of businesses,
respectively, employ fewer than 500 workers. Similarly, the great
majority of cattle producers are also small, family-owned businesses.
According to statistics collected by the National Beef Cattlemen's
Association, 98 percent of cattle producers are small- to mid-sized
family businesses with less than 500 head. In 1993, the average size of
beef cow herds was 38.3 head (NCA, 1996). Among the feedmills
classified in Standard Industrial Classification (SIC) 2048 (Prepared
Feeds and Feed Ingredients for Animals and Fowls, Except Dogs and Cats)
and SIC 5191 (Farm Supplies), the large majority employ fewer than 500
employees, and thus are small businesses. SBA data show that 95 percent
of feedmill firms in SIC 2048 and 99 percent of firms in SIC 5191
employ fewer than 500 employees. The small businesses in SIC 2048
operate 70 percent of all feedmill establishments. A total of 61 large
companies operate the remaining 30 percent of feedmills classified in
SIC 2048 (Bureau of the Census, 1996). The ERG final report projects
the number of establishments in all of these sectors with less than or
greater than 500 employees.
    c. Description of economic impacts.
    i. Small renderers.
    The ERG final report provided detailed information on the expected
economic impacts of the proposed rule on small renderers. The addendum
presents ERG's revised estimates of the impacts of the final rule on
small independent renderers. On average, each of these establishments
is estimated to incur initial revenue declines of approximately
$371,000 per year. (Meat-and-bone-meal price reductions greater or
smaller than the estimated $68 per ton would yield proportional changes
in these estimates.)
    As noted in the SCI report, most of the revenue impacts will
quickly be passed on to material suppliers. The smallest independent
renderers, however, are likely to experience the most severe impacts.
According to ERG, the number of rendering establishments has been
decreasing for a number of years, and many small operations have
already closed. Moreover, since the smallest renderers tend to be those
most dependent on the availability of dead stock supplies for raw
materials, these operations will be least able to shift losses to raw
material suppliers. (Larger renderers obtain raw material supplies
predominantly from medium to large meat packing plants and are less
dependent on dead stock supplies, which could fall in response to
increased pick up fees.)
    ERG estimated in its final report that 20 to 25 rendering
establishments are in this vulnerable group of small businesses. While
many renderers submitted comments on the proposed regulation, no
rendering companies submitted comments predicting plant closures. The
SCI study did not address plant closures other than in the case, which
it described as unlikely, that all meat and bone meal is unmarketable.
No other comments provided additional information on the number of
possible plant closures. Nevertheless, as suggested in the ERG report,
FDA agrees that some business closures are possible among these
companies, but the data are not sufficient to determine how many
closures may occur.
    ii. Small meat packing operations.
    Many small meat packing facilities will be required by their
renderers, generally through contractual arrangements, to pay higher
prices for renderer pickups of animal offal. Large and medium meat
packing operations (many of which are small businesses according to the
SBA definitions) will continue to receive payments from renderers for
raw materials, although the size of the payments will decline with the
fall in restricted meat and bone meal prices. These plants will
endeavor

[[Page 30974]]

to pass through costs by paying less for slaughter cattle. To the
extent that competitive market conditions exist, all meat packers will
experience similar declines in renderer payments, and new equilibrium
prices will reflect a pass-through of these charges to producers of
cattle and other affected livestock.
    The smallest plants in the industry, often referred to as locker
plants, provide custom slaughtering services, thereby differentiating
themselves from the large packer/renderers. Small meat packing or
locker plants have been in decline for a number of years for several
reasons, including the decline in small farm operations and in the
consumption of red meat and custom meat products. ERG reported that the
smallest meat packing plants, i.e., those with 2 to 5 employees, are at
a cost disadvantage relative to even slightly larger plants, such as
those with 12 or more employees.
    To assess whether impacts on these small plants are significant,
ERG developed revenue estimates for locker plants with slaughtering
rates representative of the smallest plants in the industry. The
smallest locker plants have substantially less raw material for
rendering, and the renderers' charges (which are heavily influenced by
the fixed costs of operating the collection truck) currently represent
a relatively large share of plant operating costs. Also, because animal
offal cannot be stored for long periods, small operations require
nearly as many renderer pickups as much larger facilities. ERG
determined that the increase in renderer charges will represent
approximately one percent of revenues for these plants and that these
increased charges might be sufficient to depress profits by significant
amounts.
    According to ERG, some industry representatives predicted that
increased renderer pickup charges would precipitate failures among the
smallest meat packers. Other small meat packers anticipated that they
would be able to pass on some charges to customers and expected to
remain in business. ERG concluded that some of the smallest meat
packers, particularly those with five or fewer employees, are
vulnerable to increased renderer charges and, in the context of a poor
economic environment, some might cease operations. No reliable
quantitative estimate could be made, however, of the number or
percentage of facilities likely to close.
    iii. Small cattle producers.
    The reduction in slaughter prices and the increase in cattle feed
prices are not expected to differentially impact small ruminant
producers, as the impact of this decline on cattle producers will be
directly proportional to the size of the producer's herd. Nevertheless,
all cattle producers will experience lost revenues of roughly $3 per
head, or about one-half of one percent of the animal's market value.
    iv. Small feedmills.
    Feedmills will incur costs to document their handling of mammalian
protein and to perform clean out procedures to ensure separation of
mammalian and pure porcine or pure equine meat and bone meal. Also,
feedmills that currently serve both ruminant and nonruminant producers,
but lack the capacity to handle two types of feeds, will be encouraged
to add storage capacity if the price of the two types of meat and bone
meal diverge significantly. The ERG study indicates that these capital
and operating costs may be substantial, but finds that the larger
feedmills would be much more likely to make this investment.
    d. Description of the recordkeeping burden of the rule.
    The Regulatory Flexibility Act directs agencies to describe the
recordkeeping requirements of its rules. This regulation will require
certain feed manufacturers to develop new written operating procedures.
No unusual skills or expertise will be required to establish such
systems. In addition, many firms will have to retain invoices or other
materials sufficient to track the materials, but FDA believes that the
retention of such records is already a widely accepted business
practice. The addendum to the ERG report summarizes the paperwork and
the other documentation costs for the final regulation and for each
alternative considered.
    e. Analysis of regulatory alternatives.
    The Regulatory Flexibility Act requires an evaluation of any
regulatory overlaps and regulatory alternatives that would minimize the
costs to small entities. FDA is unaware of any significant regulatory
conflicts with other Federal rules. FDA examined six regulatory
alternatives in addition to the no action alternative: (1) The
mammalian-to-ruminant prohibition; (2) the mammalian (with exceptions)-
to-ruminant prohibition; (3) the ruminant-to-ruminant prohibition; (4)
the partial ruminant-to-ruminant prohibition; (5) the prohibition of
all sheep, goat, mink, deer, and elk proteins in ruminant feed; and (6)
the prohibition of sheep and goat proteins in ruminant feed. As
described above, FDA and its contractor, ERG, have prepared a detailed
comparison of the respective impacts of these alternatives and have
found that the estimated net costs of the final regulation are lower
under the mammalian-to-ruminant prohibition, with exceptions, than it
would have been under the full mammalian-to-ruminant prohibition (no
exceptions), and are comparable to the costs of the proposed ruminant-
to-ruminant prohibition. Although the partial ruminant-to-ruminant
prohibition is probably less costly, and the other two alternatives
would be considerably less costly, these alternatives would not be as
effective in reducing the risk of an outbreak and spread of BSE. Thus,
FDA believes that the rule selected is the most cost-effective
regulatory alternative that meets the objective of the agency.
    In response to the many comments from small businesses requesting
agency consideration of their views, FDA has revised the rule in
several ways to decrease the burden on small entities. For example, FDA
has exempted all pet food at the retail level from the requirement to
display the cautionary statement on labeling. This exemption will
substantially mitigate the lost value of mammalian meat and bone meal,
lessening the market adjustments for all entities. Also, the agency has
exempted plate wastes and used cellulosic food casings from coverage of
the rule. Moreover, the scope of the recordkeeping burden has
decreased, so that those producers using only nonmammalian protein
products will be exempt from recordkeeping requirements for these
products. Finally, FDA has accepted industry comments urging the
acceptance of GMP definitions of acceptable clean out procedures for
feedmills. This interpretation will reduce the need for any additional
training of medicated feedmill employees. Most feedmills manufacture
medicated feeds and the employees in those mills are already familiar
with good manufacturing practices.
    f. Miscellaneous comments on the analysis of impacts discussion in
the proposed rule.
    (Comment 130). Several comments, including several oral comments at
the public meetings, claimed that FDA erred in not declaring the
proposed rule to be a ``major rule.''
    The comments appear to have misinterpreted the proposed rule and
the terminology used in the proposed rule. The preamble to the proposed
rule clearly stated that the rule ``constitutes an economically
significant rule as described in (Executive Order 12866)'' (62 FR 552
at 573). The Executive Order 12866 process uses the term ``economically
significant'' to denote those rules which may have an annual

[[Page 30975]]

effect on the economy of $100 m or more or adversely affect in a
material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or tribal governments or communities (see Executive Order 12866,
Section 3(f)(1)). This definition is similar to the definition of
``major rule'' in Executive Order 12291 (which declared a rule to be a
major rule if it was likely to have an annual effect on the economy of
$100 m or more, a major increase in costs or prices for consumers,
industries, governments, or geographic regions, or significant adverse
effects on competition, jobs, investment, productivity, innovation, or
competition with foreign-based enterprises). However, Executive Order
12866 revoked Executive Order 12291. Thus, when FDA said that the rule
was an economically significant rule within Executive Order 12866, it
was using current terminology.
    (Comment 131). Some comments contended that prohibiting the use of
protein derived from certain tissues in ruminant feed would impose an
unfunded mandate on the States.
    FDA disagrees with the comments. For purposes of determining
whether an unfunded mandate will be imposed on the states, 2 U.S.C. 658
defines ``Federal intergovernmental mandate,'' in relevant part, as
``any provision in legislation, statute, or regulation that * * * would
impose an enforceable duty upon State, local, or tribal governments.''
Therefore, the statute applies to regulations which impose a
nondiscretionary function on a State, local, or tribal government and
compliance with the regulation could be enforced against the State,
local, or tribal government. Neither the proposed rule nor the final
rule imposes any nondiscretionary functions on any State. Furthermore,
no provisions of the proposed or final rule are enforceable against any
State. As such, neither the proposed nor the final rule imposes any
unfunded mandate on the States.
    The agency noted in response to an earlier comment that states with
employees commissioned by FDA under section 702(a) of the act could be
used for enforcement of the final rule. The costs of these commissioned
employees, however, are borne by FDA, not the states. In addition,
states have worked with FDA for many years under voluntary cooperative
agreements in regulating animal feeds. FDA expects that such voluntary
cooperation from the states will continue.

VI. The Paperwork Reduction Act of 1995

    This final rule contains information collection provisions that
were submitted to OMB for review under the Paperwork Reduction Act of
1995 (44 U.S.C. 3501-3520) at the time the proposed rule was published
(62 FR 552). The title, description, and the respondent description of
the information collection provisions are shown below with an estimate
of the annual reporting and recordkeeping burden. Included in the
estimate is the time for reviewing instructions, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
    Title: Animal Proteins Prohibited in Ruminant Feed--21 CFR
589.2000.
    Description: This final rule (Sec. 589.2000) provides that protein
derived from mammalian tissues (with some exceptions) for use in
ruminant feed is a food additive subject to section 409 of the act (21
U.S.C. 348). Proteins derived from animal tissues contained in such
feed ingredients in distribution cannot be readily identified (i.e.,
species) by recipients engaged in the manufacture, processing and
distribution, and use of animal feeds and feed ingredients.
    Thus, under the agency's authority in section 701(a) of the act (21
U.S.C. 371(a)) to issue regulations for the efficient enforcement of
the act, this final rule places three general requirements on persons
that manufacture, blend, process, distribute, or use products that
contain or may contain protein derived from mammalian tissues, and
feeds made from such products. The first requirement is for cautionary
labeling of these products with direct language developed by FDA. This
labeling requirement is exempt from the scope of the Paperwork
Reduction Act because it is a ``public disclosure of information
originally supplied by the Federal government for the purpose of
disclosure to the public'' (5 CFR 1320.3(c)(2)).
    The second requirement is for these establishments to maintain and
make available to FDA records that are sufficient to track any material
that contains protein derived from mammalian tissues (as defined in
Sec. 589.2000(a)(1)) throughout the material's receipt, processing, and
distribution. Based on available information, FDA believes that
maintenance of such records is a usual and customary part of normal
business activities for such firms. Therefore, this recordkeeping
requirement creates no paperwork burden.
    The third requirement is that individuals or firms that
manufacture, blend, process, or distribute both mammalian and
nonmammalian materials must maintain written procedures to prevent
commingling and cross-contamination. An estimate of the burden
resulting from this recordkeeping requirement is provided below. The
estimate is based on the time required to develop the written
procedures, which FDA anticipates will be a one-time effort.
    In the preamble to the proposed rule, FDA included estimates for
capital cost and operating cost in the recordkeeping burden chart.
These estimates have been deleted from the chart below because the
capital and operating costs, although properly included in the analysis
of impacts discussion in this document, are not a result of the
recordkeeping provisions of the rule and therefore are not part of the
recordkeeping burden.
    Description of respondents: Individuals or firms that manufacture,
blend, process, distribute, or use feed or feed ingredients that
contain or may contain protein derived from mammalian tissues.

                                Table 2.--Estimated Annual Recordkeeping Burden 1
----------------------------------------------------------------------------------------------------------------
                                                    No. of
                                                    record                    Total      Hours per
                 21 CFR section                    keepers/    Frequency      annual       record    Total hours
                                                    firms                    records
----------------------------------------------------------------------------------------------------------------
589.2000(e)(1)(iv).............................        2,000            1        2,000           14      28,000
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

[[Page 30976]]

    The January 1997 proposed rule provided a 45-day comment period and
specifically requested comments regarding collection of information.
OMB did not approve the package submitted with the proposed rule and
filed the following comments as terms of clearance:

    OMB is concerned that the reporting and recordkeeping
requirements in the NPRM may be overly burdensome and not maximize
utility, and wishes to allow the public the opportunity to consider
the NPRM. When the paperwork package is resubmitted for OMB approval
at the final rule stage, FDA will directly address OMB's concerns
and all comments received on these issues in the preamble of the
rule and in the paperwork submission package.

    During the 45-day comment period provided by the proposed rule, FDA
received no comments regarding the requirement that individuals or
firms that manufacture, blend, process, or distribute both mammalian
and nonmammalian materials must maintain written procedures to prevent
commingling and cross-contamination. Thus, FDA received no comments
that suggested that the recordkeeping requirements were overly
burdensome or did not maximize utility.
    The agency also announced the availability of a draft rule in the
Federal Register of April 17, 1997 (62 FR 18728). This document
contained the codified section of the draft final rule and provided an
additional comment period of 10 days. None of the comments received
concerned collection of information.
    FDA is announcing that the proposed collection of information has
been submitted to OMB for review and clearance under the Paperwork
Reduction Act of 1995. Section 589.2000(e)(1)(iv) will be effective
upon approval by OMB. FDA now invites comments on: (1) Whether the
proposed collection of information is necessary for the proper
performance of FDA's functions, including whether the information will
have practical utility; (2) the accuracy of FDA's estimate of the
burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (3) ways to enhance
the quality, utility, and clarity of the information to be collected;
and (4) ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques, when appropriate, and other forms of information
technology. FDA will announce the effective date in the Federal
Register. Submit written comments on the collection of information by
July 7, 1997.
    Submit written comments on the collection of information to the
Office of Information and Regulatory Affairs, OMB, New Executive Office
Bldg., 725 17th St. NW., rm. 10235, Washington, DC 20503, Attn: Desk
Officer for FDA. For further information contact: Denver Presley,
Office of Information Resources Management (HFA-250), Food and Drug
Administration, 5600 Fishers Lane, rm. 16B-19, Rockville, MD 20857,
301-827-1472. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number.

VII. Federalism

    FDA has analyzed the final rule in accordance with the principles
set forth in Executive Order 12612 and has determined that this final
rule does not warrant the preparation of a Federalism Assessment.

VIII. Congressional Review

    This final rule has been determined to be a major rule for purposed
of 5 U.S.C. 801 et seq., Subtitle E of the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121). FDA is submitting
the information and reports as required by that statute.

IX. References

    The following references have been placed on display in the Dockets
Management Branch (HFA-305), Food and Drug Administration, 12420
Parklawn Dr., rm. 1-23, Rockville, MD 20857, and may be seen by
interested persons between 9 a.m. and 4 p.m., Monday through Friday.

1. Dawson, M., et. al., ``Parenteral Transmission of BSE to the
Pig,'' Veterinary Record, 127: 338 (1990).
2. Ministry of Agriculture, Fisheries and Food, ``BSE in Great
Britain a Progress Report,'' 24, November 1996.
3. Kimberlin, R. H., et. al., ``An Overview of Bovine Spongiform
Encephalopathy,'' at the Symposium on Virological Aspects of the
Safety of Biological Products, London, England, in Developments in
Biological Standardization, 75: 75-82 (1990).
4. Collinge, J. et. al., ``Molecular Analysis of Prion Strain
Variation and the Aetiology of `New Variant' CJD,'' Nature, 383:
685-670 (1996).
5. Coucerne, S. N., ``Predicting the CJD Epidemic in Humans,''
Nature, 385: 197-198 (1997).
6. Davis, A., ``Bovine Spongiform Encephalopathy--United States
Surveillance,'' Dx Monitor, Winter 1996--Spring 1997: 11 (1997).
7. Groschup, M. H., et. al., ``Detection of Scrapie Agent in
Peripheral Nervous System of a Diseased Sheep,'' Neurobiology of
Diseases, 3: 191-195 (1996).
8. Lasmezas, C. I., et. al., ``Transmission of the BSE Agent to Mice
in the Absence of Detectable Abnormal Prion Protein,'' Science, 275:
402-405 (1997).
9. Moon, H., ``Bovine Spongiform Encephalopathy: Hypothetical Risk
of Emergence as a Zoonotic Foodborne Epidemic,'' Journal of Food
Protection, 59(10): 1106-1111 (1996).
10. Spraker, T. R., et. al., ``Spongiform Encephalopathy in Free-
Ranging Mule Deer, White-Tailed Deer, and Rocky Mountain Elk in
North Central Colorado,'' Journal of Wildlife Diseases, 33(1): 1-6
(1997).
11. European Commission, Decision, 27 June 1994, 94/381/EC, Official
Journal of the European Commission, 172/23.
12. Davis, A., ``Bovine Spongiform Encephalopathy--United States
Surveillance,'' Dx Monitor, Winter 1996--Spring 1997, 11 (1997).
13. Brown, P. and D. C. Gajdusek, ``Survival of Scrapie Virus After
3 Years'' Interment,'' Lancet, 337: 269-270 (1991).
14. Eastern Research Group, ``Cost Analysis of Regulatory Options to
Reduce the Risk of an Outbreak of Transmissible Spongiform
Encephalopathies (TSE's) in the United States,'' Addendum to the
Final Report, April 29, 1997.

List of Subjects in 21 CFR Part 589

    Animal feeds, Animal foods, Food additives.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Lead Deputy Commissioner, 21 CFR part 589 is
amended as follows:

PART 589--SUBSTANCES PROHIBITED FROM USE IN ANIMAL FOOD OR FEED

    1. The authority citation in 21 CFR part 589 is revised to read as
follows:

    Authority: Secs. 201, 402, 403, 409, 701 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 321, 342, 343, 348, 371).

    2. New Sec. 589.2000 is added to subpart B to read as follows:

Sec. 589.2000  Animal proteins prohibited in ruminant feed.

    (a) Definitions.--(1) Protein derived from mammalian tissues means
any protein-containing portion of mammalian animals, excluding: Blood
and blood products; gelatin; inspected meat products which have been
cooked and offered for human food and further heat processed for feed
(such as plate waste and used cellulosic food casings); milk products
(milk and milk proteins); and any product whose only

[[Page 30977]]

mammalian protein consists entirely of porcine or equine protein.
    (2) Renderer means any firm or individual that processes slaughter
byproducts, animals unfit for human consumption, or meat scraps. The
term includes persons who collect such materials and subject them to
minimal processing, or distribute them to firms other than renderers
(as defined here) whose intended use for the products may include
animal feed. The term includes renderers that also blend animal protein
products.
    (3) Blender means any firm or individual which obtains processed
animal protein from more than one source or from more than one species,
and subsequently mixes (blends) or redistributes an animal protein
product.
    (4) Feed manufacturer includes manufacturers of complete and
intermediate feeds intended for animals, and includes on-farm in
addition to off-farm feed manufacturing and mixing operations.
    (5) Nonmammalian protein includes proteins from nonmammalian
animals.
    (6) Distributor includes persons who distribute or transport feeds
or feed ingredients intended for animals.
    (7) Ruminant includes any member of the order of animals which has
a stomach with four chambers (rumen, reticulum, omasum, and abomasum)
through which feed passes in digestion. The order includes, but is not
limited to, cattle, buffalo, sheep, goats, deer, elk, and antelopes.
    (b) Food additive status. The Food and Drug Administration has
determined that protein derived from mammalian tissues for use in
ruminant feed is a food additive subject to section 409 of the Federal
Food, Drug, and Cosmetic Act (the act). The use or intended use in
ruminant feed of any material that contains protein derived from
mammalian tissues causes the feed to be adulterated and in violation of
the act, unless it is the subject of an effective notice of claimed
investigational exemption for a food additive under Sec. 570.17 of this
chapter.
    (c) Requirements for renderers that are not included in paragraph
(e) of this section. (1) Renderers that manufacture products that
contain or may contain protein derived from mammalian tissues and that
are intended for use in animal feed shall take the following measures
to ensure that materials identified in paragraph (b) of this section
are not used in the feed of ruminants:
    (i) Label the materials as follows: ``Do not feed to cattle or
other ruminants''; and
    (ii) Maintain records sufficient to track the materials throughout
their receipt, processing, and distribution, and make the copies
available for inspection and copying by the Food and Drug
Administration.
    (2) Renderers described in paragraph (c)(1) of this section will be
exempted from the requirements of paragraphs (c)(1)(i) and (c)(1)(ii)
of this section if they:
    (i) Use exclusively a manufacturing method that has been validated
by the Food and Drug Administration to deactivate the agent that causes
transmissible spongiform encephalopathy (TSE) and whose design has been
made available to the public;
    (ii) Use routinely a test method that has been validated by the
Food and Drug Administration to detect the presence of the agent that
causes TSE's and whose design has been made available to the public.
Renderers whose products test positive for agents that cause TSE's must
comply with paragraphs (c)(1)(i) and (c)(1)(ii) of this section.
Records of the test results shall be made available for inspection by
the Food and Drug Administration; or
    (iii) Use exclusively a method for controlling the manufacturing
process that minimizes the risk of the TSE agent entering the product
and whose design has been made available to the public and validated by
the Food and Drug Administration.
    (3) Renderers described in paragraph (c)(1) of this section will be
exempted from the requirements of paragraph (c)(1)(ii) of this section
if they use a permanent method, approved by FDA, to make a mark
indicating that the product contains or may contain protein derived
from mammalian tissue. If the marking is by the use of an agent that
cannot be detected on visual inspection, the renderer must use an agent
whose presence can be detected by a method that has been validated by
the Food and Drug Administration and whose design has been made
available to the public.
    (d) Requirements for protein blenders, feed manufacturers, and
distributors that are not included in paragraph (e) of this section.
(1) Protein blenders, feed manufacturers, and distributors that
manufacture, blend, process, and distribute products that contain or
may contain protein derived from mammalian tissues shall comply with
paragraph (c)(1) of this section.
    (2) Protein blenders, feed manufacturers, and distributors, shall
be exempt from paragraphs (d)(1) of this section if they:
    (i) Purchase animal products from renderers that certified
compliance with paragraph (c)(2) of this section or purchase such
materials from parties that certify that the materials were purchased
from renderers that certified compliance with paragraph (c)(2) of this
section; or
    (ii) Comply with the requirements of paragraph (c)(2) of this
section where appropriate.
    (3) Protein blenders, feed manufacturers, and distributors, shall
be exempt from paragraph (c)(1)(ii) of this section if they:
    (i) Purchase animal protein products that are marked in accordance
with paragraph (c)(3) of this section or purchase such materials from
renderers that certified compliance with paragraph (c)(3) of this
section, or purchase such materials from parties that certify that the
materials were purchased from renderers that certified compliance with
paragraph (c)(3) of this section; or
    (ii) Comply with the requirements of paragraph (c)(3) of this
section where appropriate.
    (4) Pet food products that are sold or are intended for sale at
retail and feeds for nonruminant laboratory animals are exempt from the
labeling requirements in paragraphs (c) and (d) of this section.
However, if the pet food products or feeds for nonruminant laboratory
animals are sold or are intended for sale as distressed or salvage
items, then such products shall be labeled in accordance with paragraph
(c) or (d) of this section, as appropriate.
    (5) Copies of certifications as described in paragraphs (d)(2) and
(d)(3) of this section, shall be made available for inspection and
copying by the Food and Drug Administration.
    (e) Requirements for persons that intend to separate mammalian and
nonmammalian materials. (1) Renderers, protein blenders, feed
manufacturers, distributors, and others that manufacture, process,
blend and distribute both products that contain or may contain protein
derived from mammalian tissues or feeds containing such products, and
protein products from other animal tissues or feeds containing such
products, and that intend to keep those products separate shall:
    (i) Comply with paragraphs (c)(1) or (d)(1) of this section as
appropriate except that the labeling requirement shall apply only to
products that contain or may contain protein derived from mammalian
tissues or feeds containing such products;
    (ii) In the case of a renderer, obtain nonmammalian or pure porcine
or pure equine materials only from single-species slaughter facilities;
    (iii) Provide for measures to avoid commingling or cross-
contamination;

[[Page 30978]]

    (A) Maintain separate equipment or facilities for the manufacture,
processing, or blending of such materials; or
    (B) Use clean-out procedures or other means adequate to prevent
carry-over of products that contain or may contain protein derived from
mammalian tissues into animal protein or feeds that may be used for
ruminants; and
    (iv) Maintain written procedures specifying the clean-out
procedures or other means, and specifying the procedures for separating
products that contain or may contain protein derived from mammalian
tissue from all other protein products from the time of receipt until
the time of shipment.
    (2) Renderers, blenders, feed manufacturers, and distributors will
be exempted from applicable requirements of paragraph (e)(1) of this
section, if they meet the criteria for exemption under paragraphs
(c)(2) or (c)(3) of this section, and (d)(2) or (d)(3) of this section.
    (f) Requirements for establishments and individuals that are
responsible for feeding ruminant animals. Establishments and
individuals that are responsible for feeding ruminant animals shall
maintain copies of purchase invoices and labeling for all feeds
containing animal protein products received, and make the copies
available for inspection and copying by the Food and Drug
Administration.
    (g) Adulteration and misbranding. (1) Animal protein products, and
feeds containing such products, that are not in compliance with
paragraphs (c) through (f) of this section, excluding labeling
requirements, will be deemed adulterated under section 402(a)(2)(C) or
402(a)(4) of the act.
    (2) Animal protein products, and feeds containing such products,
that are not in compliance with the labeling requirements of paragraphs
(c) through (f) of this section will be deemed misbranded under section
403(a)(1) or 403(f) of the act.
    (h) Inspection; records retention. (1) Records that are to be made
available for inspection and copying, as required by this section,
shall be kept for a minimum of 1 year.
    (2) Written procedures required by this section shall be made
available for inspection and copying by the Food and Drug
Administration.

    Dated: May 9, 1997.
Michael A. Friedman,
Lead Deputy Commissioner for the Food and Drug Administration.

    Dated: May 9, 1997.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 97-14682 Filed 6-3-97; 8:45 am]
BILLING CODE 4160-01-P