[Federal Register: September 22, 2004 (Volume 69, Number 183)]
[Proposed Rules]
[Page 56823-56906]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22se04-25]
 
[[Page 56823]]
 
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Part II
 
Department of Health and Human Services
 
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Food and Drug Administration
 
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21 CFR Parts 16 and 118
 
Prevention of Salmonella Enteritidis in Shell Eggs During Production;
Proposed Rule
 
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
 
Food and Drug Administration
 
21 CFR Parts 16 and 118
 
[Docket Nos. 1996P-0418, 1997P-0197, 1998P-0203, and 2000N-0504]
RIN 0910-AC14
 
Prevention of Salmonella Enteritidis in Shell Eggs During
Production
 
AGENCY: Food and Drug Administration, HHS.
 
ACTION: Proposed rule.
 
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SUMMARY: The Food and Drug Administration (FDA) is proposing to require
shell egg producers to implement measures to prevent Salmonella
Enteritidis (SE) from contaminating eggs on the farm. We are taking
this action because of the number of outbreaks of foodborne illnesses
and deaths caused by SE that are associated with the consumption of
shell eggs that have not been treated to destroy this pathogen. We
expect that the requirements that we are proposing in this rule, if
finalized as proposed, will result in a significant decrease in the
number of SE-contaminated eggs produced on farms. Ultimately, we expect
that the proposed requirements in this rule will generate public health
benefits through a decrease in the numbers of SE-associated illnesses
and deaths caused by consumption of shell eggs.
 
DATES: Submit written or electronic comments by December 21, 2004.
    Submit written comments on the information collection provisions by
October 22, 2004. See sections III.C and VI.C of this document for the
proposed compliance dates of a final rule based on this document.
 
ADDRESSES: You may submit comments, identified by [Docket Nos. 1996P-
0418, 1997P-0197, 1998P-0203, and 2000N-0504], by any of the following
methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov.
 
Follow the instructions for submitting comments.
    <bullet> Agency Web site: http://www.fda.gov/dockets/ecomments.
 
Follow the instructions for submitting comments on the agency Web site.
    <bullet> E-mail: fdadockets@oc.fda.gov. Include [Docket Nos. 1996P-
0418, 1997P-0197, 1998P-0203, and 2000N-0504 and RIN number 0910-AC14]
in the subject line of your e-mail message.
    <bullet> FAX: 301-827-6870.
    <bullet> Mail/Hand delivery/Courier [For paper, disk, or CD-ROM
submissions]: Division of Dockets Management, 5630 Fishers Lane, rm.
1061, Rockville, MD 20852.
    Instructions: All submissions received must include the agency name
and Docket No. or Regulatory Information Number (RIN) for this
rulemaking. All comments received will be posted without change to
 
http://www.fda.gov/dockets/ecomments, including any personal
 
information provided. For detailed instructions on submitting comments
and additional information on the rulemaking process, see the
``Comments'' heading of the SUPPLEMENTARY INFORMATION section of this
document.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.fda.gov/dockets/ecomments and/or
 
the Division of Dockets Management, 5630 Fishers Lane, rm. 1061,
Rockville, MD 20852.
 
FOR FURTHER INFORMATION CONTACT: Rebecca Buckner, Center for Food
Safety and Applied Nutrition (HFS-306), Food and Drug Administration,
5100 Paint Branch Pkwy. College Park, MD 20740, 301-436-1486.
 
SUPPLEMENTARY INFORMATION:
 
Table of Contents
 
I. Highlights of the Proposed Rule
II. Background
    A. Salmonella and SE Infection
    1. Salmonellosis
    2. SE
    3. SE and Eggs
    4. Mechanism of Salmonella Contamination in Eggs
    5. Infectious Dose
    B. U.S. Egg Industry
    C. Federal Egg Safety Regulatory Agencies and Authorities
    D. Current Federal Egg Safety Measures for Shell Egg Production and
Retail
    1. Refrigeration of Shell Eggs
    2. Labeling of Shell Eggs
    3. The FDA Food Code
    4. Egg Safety Education Efforts
    E. The SE Risk Assessment
    F. Advanced Notice of Proposed Rulemaking on SE in Eggs
    G. Egg Safety Public Meetings
    H. Current On-Farm Practices
    1. The Layers Study
    2. Voluntary Egg Quality Assurance Programs (QA)
    I. Petitions to the Agency
    1. Center for Science in the Public Interest
    2. Rose Acre Farms, Inc.
    3. United Poultry Concerns, Inc., and the Association of
Veterinarians for Animal Rights
III. The Proposal to Require SE Prevention Measures for Egg Production
    A. Rationale for Proposal
    B. Shell Egg Producers Covered by Proposed 21 CFR Part 118
    C. Proposed Compliance Dates for Shell Egg Producers of Various
Sizes
    D. Definitions
    E. The SE Prevention Measures
    1. Chicks and Pullets
    2. Biosecurity
    3. Rodents, Flies, and Other Pest Control
    4. Cleaning and Disinfection
    5. Refrigeration of Shell Eggs Stored More Than 36 Hours
    F. Indication of the Effectiveness of the SE Prevention Measures:
Testing
    1. Environmental Testing for SE
    2. Egg Testing for SE
    G. Sampling and Testing Methodology for SE
    1. Sampling of the Poultry House Environment
    2. Egg Sampling
    H. Laboratory Methods for Testing for SE
    I. Administration of the SE Prevention Measures
    J. Recordkeeping Requirements for the SE Prevention Measures
    1. Records That Egg Producers Are Required to Maintain
    2. General Requirements for Records Maintained by Egg Producers
    3. Length of Time Records Must Be Retained
    4. Offsite Storage of Records
    5. Official Review of Records
    6. Public Disclosure of Records
    7. Comment Solicitation on Recordkeeping Measures
    K. Enforcement of On-Farm SE Prevention Measures for Shell Eggs
    L. Legal Authority
    M. Response to Comments Related to On-Farm SE Prevention Measures
    N. Transportation of Shell Eggs
IV. Handling and Preparation of Eggs by Retail Establishments
    A. Inappropriate Handling of Raw Shell Eggs by Food Preparers
    B. SE and Highly Susceptible Populations
    C. The FDA Food Code
    D. Request for Comments
    E. Response to Comments Related to Retail Standards
V. Preliminary Regulatory Impact Analysis (PRIA)
    A. Introduction
    B. Need for Regulation
    C. Economic Analysis of Potential Mitigations: Overview
    1. Measuring Benefits
    2. Measuring Costs
    3. Coverage of the Analysis
    D. Summary of Costs and Benefits of Regulatory Options and the
 
[[Page 56825]]
 
Proposed Rule
    1. No New Regulatory Action
    2. Classification of SE-Positive Eggs as Restricted or SE Positive
    3. HAACP
    4. The Proposed Rule
    5. More Extensive On-Farm SE Prevention Measures
    6. Less Extensive On-Farm SE Prevention Measures
    7. Retail SE Prevention Measures
    E. Benefits and Costs of Potential SE Prevention Measures: Detailed
Analysis
    1. On-Farm SE Prevention Measures
    2. Administrative Measures
    3. Summary of On-Farm SE Prevention and Administrative Measures
    4. Retail Provisions
    F. Summary of Benefits and Costs of the Proposed Rule
    1. Coverage
    2. Provisions in the Proposed Rule
    3. Summary of Costs and Benefits
    4. Analysis of Uncertainty
VI. Initial Regulatory Flexibility Analysis
    A. Introduction
    B. Economic Effects on Small Entities
    1. Number of Small Entities Affected
    2. Costs to Small Entities
    C. Regulatory Options
    1. Exemption for Small Entities
    2. Longer Compliance Periods
    D. Description of Recordkeeping and Recording Requirements
    E. Summary
VII. Unfunded Mandates
VIII. Federalism
IX. Environmental Impact
X. Paperwork Reduction Act of 1995
XI. Comments
XII. References
Appendix to the PRIA A: Costs of Alternative Testing and Diversion
Scenarios
Appendix to the PRIA B: The Expected Cost of Testing and Diversion
Appendix to the PRIA C: Distributions Used in the Analysis of
Uncertainty
 
I. Highlights of the Proposed Rule
 
    In this proposed rulemaking, FDA is proposing egg safety SE
prevention measures for egg production. This proposal is significant
because a farm-to-table risk assessment of Salmonella Enteritidis (SE)
in eggs identified implementation of on-farm prevention measures as a
very important step that could be taken to reduce the occurrence of SE
infections from eggs. Voluntary quality assurance programs for egg
production have led to meaningful reductions in SE illnesses already.
However, these programs are not always uniformly administered or
uniformly comprehensive in their prevention measures.
    Moreover, the most recent data from the Centers for Disease Control
and Prevention (CDC) show that SE illnesses have essentially remained
steady for the past several years. In 2001, CDC estimated that 118,000
illnesses were caused by consumption of SE-contaminated eggs.
Accordingly, we believe that additional interventions are warranted.
The proposed on-farm SE prevention measures and a more detailed
rationale for these measures are found in section III of this document.
    Following are the proposed SE prevention measures: (1) Provisions
for procurement of chicks and pullets, (2) a biosecurity program, (3) a
pest and rodent control program, (4) cleaning and disinfection of
poultry houses that have had an environmental sample or egg test
positive for SE, and (5) refrigerated storage of eggs at the farm.
Moreover, a cornerstone of the proposal is a requirement that producers
test the environment for SE in poultry houses. If the environmental
test is positive, we are proposing that egg testing for SE be
undertaken, and that if an egg test is positive, eggs be diverted from
the table egg market to a technology or process that achieves at least
a 5-log destruction of SE for shell eggs, or the processing of egg
products in accordance with the Egg Products Inspection Act. As part of
the SE prevention measures, we are proposing that producers identify a
responsible person to administer the prevention measures at each farm.
We also are proposing recordkeeping requirements for environmental and
egg sampling and testing and for egg diversion. Finally, we are
proposing that if a producer has 3,000 or more laying hens and all eggs
at a farm are to be given a treatment that will achieve at least a 5-
log destruction of SE or processed into egg products, then only the
proposed refrigeration requirements would apply. The proposed rule
would not apply to producers who sell all of their eggs directly to
consumers or producers with fewer than 3,000 laying hens.
    We also are soliciting comment on whether we should include
additional requirements in the final rule, particularly in two areas.
First, should we expand the recordkeeping requirements to include a
written SE prevention plan and records for compliance with the SE
prevention measures? Second, should the safe egg handling and
preparation practices in FDA's 2001 Model Food Code (as outlined in
section IV.D of this document) be federally mandated for retail
establishments that specifically serve a highly susceptible population
(e.g., nursing homes, hospitals, day care centers)? These issues are
discussed in more detail in the following relevant sections of this
document.
 
II. Background
 
A. Salmonella and SE Infection
 
1. Salmonellosis
    Salmonella microorganisms are ubiquitous and are commonly found in
the digestive tracts of animals, especially birds and reptiles. Human
illnesses are usually associated with ingesting food or drink
contaminated with Salmonella, although infection also may be
transmitted person to person through the fecal-oral route where
personal hygiene is poor or by the animal-to-man route (Ref. 1).
    The disease salmonellosis is the result of an intestinal infection
with Salmonella and is characterized by diarrhea, fever, abdominal
cramps, headache, nausea, and vomiting. Symptoms of salmonellosis
usually begin within 6 to 72 hours after consuming a contaminated food
or liquid and last for 4 to 7 days. Most healthy people recover without
antibiotic treatment; however, the infection can spread into the
bloodstream, then to other areas of the body such as the bone marrow or
the meningeal linings of the brain. This infection can lead to a severe
and fatal illness (Ref. 2). The complications associated with an
infection are more likely to occur in children, the elderly, and
persons with weakened immune systems. In addition, about 2 percent of
those who recover from salmonellosis may later develop recurring joint
pains and arthritis (Ref. 3).
    Salmonellosis is a serious health concern. It is a notifiable
disease, i.e., physicians and health laboratories are required to
report cases (single occurrences of illness) to local health
departments in accordance with procedures established by each State.
These cases are then, in turn, reported to State health departments,
and the Salmonella isolates\1\ are referred to State Public Health
laboratories for serotyping. Each case and each serotyped isolate is
reported to CDC. These reports are made only for diagnosed cases of
Salmonella infection.
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    \1\ When a physician sees a patient and suspects that the
patient has a case of salmonellosis, the physician may obtain a
patient's specimen (e.g. stool) for analysis. The specimen is sent
to the laboratory to be tested to identify and confirm any
Salmonella that may be present. Thus, the laboratory obtains the
actual specimen of Salmonella.
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    A case of illness is confirmed as salmonellosis only if an isolate
is confirmed by a laboratory as being
 
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Salmonella. Although all cases may not be confirmed, all confirmed
cases are associated with isolates of Salmonella. Reported cases are
likely to represent only a small portion of the actual number of
illnesses that occurred because of the following reasons: (1) Ill
individuals do not always seek care by medical professionals,
especially if the symptoms are not severe; (2) medical professionals
may not establish the cause of the illness but may simply treat the
symptoms; and (3) medical professionals do not always report Salmonella
cases to public health officials. CDC used updated information and data
from a FoodNet population study to estimate that there are 38 cases of
salmonellosis for every one that is reported (Ref. 4). This estimate
was central to updating an estimate of the burden of salmonellosis. The
overall burden of salmonellosis in 2001 was estimated to be 1,203,650
cases, including 14,000 hospitalizations, and 494 deaths (Refs. 4 and
5).
    CDC surveillance data list close to 600 different Salmonella
serotypes (a group of related microorganisms distinguished by their
antigens) that have caused illness in the United States. Following are
the four serotypes most frequently reported as causing illness: (1)
Salmonella enterica serotype Typhimurium, (2) Salmonella enterica
serotype Enteritidis (Salmonella Enteritidis or SE), (3) Salmonella
enterica serotype Newport, and (4) Salmonella enterica serotype
Heidelberg (Ref. 6). These microorganisms are found in poultry, eggs,
and other foods.
2. SE
    Currently, SE is one of the most commonly reported serotypes of
Salmonella. SE accounted for only about 5 percent of the number of all
reported Salmonella isolates in 1976. However, in 1985, 1990, 1994, and
1999, SE constituted 9.8 percent, 20.6 percent, 26.3 percent, and 16.3
percent, respectively, of all Salmonella isolates (Ref. 6). The rate of
SE isolates reported to CDC increased from 0.6 per 100,000 population
in 1976 to 3.6 per 100,000 in 1996 (Ref. 7). In 2001, the isolation
rate of SE was 2.0 per 100,000 population and the contribution of SE
(corrected for underreporting) to total salmonellosis was estimated to
have been 213,046 illnesses, including 2,478 hospitalizations, and 87
deaths (Refs. 4 and 5).
    In 1985, the States reported 26 SE-related outbreaks (i.e.,
occurrences of 2 or more cases of a disease related to a common source)
to CDC; by 1990 the number of SE-related outbreaks reported to CDC had
increased to 85. In 1995 there were 56 confirmed outbreaks of SE
infection, in 2000 there were 50 and in 2002 there were 32 (Ref. 8).
3. SE and Eggs
    In the mid-1980s, CDC made an epidemiological and laboratory
association between eggs and Salmonella outbreaks. Shell eggs are now
the predominant source of SE-related cases of salmonellosis in the
United States where a food vehicle is identified. A food vehicle is
identified in approximately half of the outbreaks of illness associated
with SE. Between 1990 and 2001, an average of 78 percent of vehicle-
confirmed SE outbreaks were egg associated (Ref. 9). These eggs were
typically raw or undercooked. Although CDC can estimate the number of
egg-associated SE illnesses as a percentage of all SE illnesses, the
proportion of domestically acquired salmonellosis that is attributable
to SE in eggs is difficult to estimate. The estimates have a broad
range of uncertainty around them because of the variable nature of both
foodborne disease outbreaks and investigations. However, the basic
surveillance information on the number of reported SE cases and
outbreaks is readily available and does not require further estimation.
Although there are other sources of SE, actions to improve egg safety
are the single most effective way to reduce the overall number of SE
infections and outbreaks.
    CDC has described several SE outbreaks that occurred between 1996
and 1998 and were associated with raw or undercooked eggs (Ref. 7).
    <bullet> In November 1997, 91 persons who consumed broccoli with
Hollandaise sauce at a Las Vegas restaurant became ill. Investigation
showed that the Hollandaise sauce was prepared with pooled shell eggs,
cooked to a temperature inadequate to kill SE, and then held at room
temperature for several hours prior to service.
    <bullet> In August 1997, 12 persons developed culture-confirmed
cases of SE after consuming cheesecake prepared in a private residence
in Los Angeles, CA. The cheesecake contained raw egg whites and egg
yolks that were heated in a double boiler until slightly thickened. The
California Department of Health Services and Department of Food and
Agriculture investigated the farm that supplied the eggs and isolated
SE from manure samples and from pooled egg samples.
    <bullet> In October 1997, 75 persons at 7 different events in the
District of Columbia developed salmonellosis after consuming lasagna
supplied by the same commercial manufacturer. Cultures of leftover
lasagna yielded SE. Investigation revealed that all of the lasagnas
consumed at the different events were prepared from the same egg-cheese
mixture. A traceback investigation led to farms at which 5 of 13
poultry houses had environmental samples positive for SE.
    From 1990 to 2001, 14,319 illnesses were attributed to SE
associated with shell eggs. Of those illnesses, 10,406 occurred during
1990 through 1995 and 3,913 occurred during 1996 through 2001 (Ref. 9).
In 2002, there were 32 outbreaks of SE illness, and the SE isolation
rate (illnesses per 100,000 population) was 1.77 (Ref. 8). Progress has
been made and there has been a decrease in SE incidence since the mid-
1990s, in part due to egg quality assurance (QA) programs, informing
and educating consumers and retailers on proper handling, and
nationwide regulations to keep eggs refrigerated. However, these gains
are still far short of the public health and foodborne illness gains
required to meet Healthy People 2010 goals. Healthy People 2010 sets
forth significant and achievable goals, namely a 50 percent reduction
in both outbreaks and salmonellosis from foodborne contamination
(corresponding to a 50 percent reduction from the 2000 goals for SE
outbreak reduction and a 50 percent reduction in salmonellosis in
general) (Ref. 10). We estimate that the largest gains towards our
public health goals will be achieved through implementation of this
rule. The incidence of SE in the United States remains much higher than
in the 1970s (1976 SE isolation rate = 0.56) (Ref. 11), and the
decrease in reported cases of SE illness since 1999 has appeared to
slow or stop compared to decreases seen in the mid-1990s (Ref. 9).
Because progress in reducing the number of illnesses and outbreaks
appears to have greatly slowed or stopped, we believe the additional
preventive measures, proposed herein, for shell eggs may be needed to
reduce further the incidence of SE illnesses and meet our public health
goals.
4. Mechanism of Salmonella Contamination in Eggs
    Previously, Salmonella contamination of shell eggs was thought most
likely to be caused by trans-shell penetration of bacteria present in
the egg's environment. The surface of an egg can become contaminated
with any microorganism that is excreted by the laying hens. In
addition, contact with nesting materials, dust, feedstuff, shipping and
storage containers, human beings and other animals may be a source of
shell contamination. The
 
[[Page 56827]]
 
likelihood of trans-shell penetration increases with the length of time
that the eggs are in contact with contaminating materials.
    While environmental contamination is still a route for Salmonella
contamination, SE experts now believe that the predominant route
through which eggs become contaminated with SE is the ``transovarian''
route. Though the mechanism is still not well understood, SE will
infect the ovaries and oviducts of some egg-laying hens, permitting
transovarian contamination of the interior of the egg while the egg is
still inside the hen (Refs. 12 and 13). The site of contamination is
usually the albumen (the egg white).
    It is believed that only a small number of hens in an infected
flock shed SE at any given time and that an infected hen may lay many
uncontaminated eggs (Ref. 14). Nonetheless, it has been estimated that
of the 47 billion shell eggs consumed annually as table eggs (eggs
consumed as shell eggs, as opposed to eggs that are used to make egg
products), 2.3 million are SE-positive, exposing a large number of
people to the risk of illness (Ref. 15).
5. Infectious Dose
    In general, the greater the numbers of microorganisms ingested, the
greater the likelihood of disease. The likelihood of disease also is
contingent on the virulence of the microorganism and the susceptibility
of the host (Ref. 16). However, there is evidence that the infectious
dose (i.e., amount of microorganisms capable of causing disease) for SE
can be very low. For example, in a 1994 outbreak attributed to
consumption of SE-contaminated ice cream, the highest level of
contamination found in the implicated ice cream was only six
microorganisms per half-cup (65 gram) serving (Ref. 17). Another
report, using a different method of measurement, determined that the
infective dose per serving was 25 microorganisms (Ref. 18). These
reports indicate that low-level contamination of some foods with SE can
lead to illness. It is generally believed that SE-contaminated eggs
initially contain only a few SE microorganisms (less than 20 (Ref.
19)), which may be sufficient to cause illness.
 
B. U.S. Egg Industry
 
    On a per capita basis, Americans consume about 234 eggs per year
(Ref. 20). U.S. production is relatively stable and has increased only
slightly, from about 60 billion eggs in 1984 to 67.3 billion eggs in
1998 (Ref. 21). Generally, about 70 percent of the edible shell eggs
produced are sold as table eggs while the remainder are processed into
liquid, frozen or dried pasteurized egg products. The majority of egg
products are destined for institutional use or further processing into
foods such as cake mixes, pasta, ice cream, mayonnaise, and bakery
goods.
    Geographically, commercial egg production in the western United
States is concentrated in California, and in the eastern United States
is centered in Ohio, Indiana, Iowa, and Pennsylvania. Other States in
which major producers are located include Texas, Minnesota, and
Georgia. Over 4,000 farm sites have 3,000 or more egg-laying hens,
representing 99 percent of all domestic egg-laying hens and accounting
for 99 percent of total egg production. There are an additional 65,000
farms with fewer than 3,000 egg-laying hens, accounting for the balance
of eggs produced (Ref. 22).
 
C. Federal Egg Safety Regulatory Agencies and Authorities
 
    Federal authority to regulate egg safety is shared by FDA and the
U.S. Department of Agriculture's Food Safety and Inspection Service
(USDA's FSIS). In addition, USDA's Animal and Plant Health Inspection
Service (APHIS) conducts a control program that certifies poultry
breeding stock and hatcheries as SE-monitored and USDA's Agricultural
Marketing Service (AMS) conducts a surveillance program to ensure
proper disposition of restricted shell eggs.
    FDA has jurisdiction over the safety of foods generally, including
shell eggs, under section 201 of the Federal Food, Drug, and Cosmetic
Act (the FFDCA) (21 U.S.C. 321). The Public Health Service Act (the PHS
Act) (42 U.S.C. 201 et seq.) authorizes the FDA to make and enforce
such regulations as ``are necessary to prevent the introduction,
transmission or spread of communicable diseases from foreign countries
into the States * * * or from one State * * * into any other State''
(section 361(a) of the PHS Act (42 U.S.C. 264(a)). Thus, under the
FFDCA and the PHS Act, FDA has the authority to regulate a food when
the food may act as a vector of disease, as in the case of SE-
contaminated eggs.
    USDA has primary responsibility for implementing the Egg Products
Inspection Act (EPIA) (21 U.S.C. 1031 et seq.). Under the EPIA, FSIS
has primary responsibility for the inspection of processed egg products
to prevent the distribution of adulterated or misbranded egg products.
    This proposed rule is part of a joint and coordinated strategy by
FDA and FSIS to more effectively address egg safety. Pursuant to this
coordinated strategy, FDA is focusing its efforts on farm practices,
and on food manufacturing plants, institutions, and restaurants. FSIS,
in turn, is focusing its efforts on egg products plants and egg
handlers. Both agencies are evaluating additional measures to improve
egg safety, and FSIS intends to issue proposed rules in the near future
for egg products plants and egg handlers, including egg handlers who
operate in-shell pasteurization treatments. FDA and FSIS will continue
to work closely together to ensure that our egg safety measures are
consistent, coordinated, and complementary.
 
D. Current Federal Egg Safety Measures for Shell Egg Production and
Retail
 
    Currently, there are no Federal regulations to reduce the presence
of SE in eggs during production. However, we recognize that some State
or local agencies may have requirements in place addressing egg safety
during production.
    There are several Federal activities related to egg safety at the
retail level. FSIS issued a final rule for refrigeration and labeling
of eggs during transport and storage when packed for the ultimate
consumer (63 FR 45663, August 27, 1998). In addition, FDA issued a
final rule that requires labeling of eggs and refrigeration of eggs at
retail establishments (65 FR 76092, December 5, 2000). Further, FDA's
Food Code provides guidance to retail establishments on the handling
and storage of potentially hazardous foods, such as shell eggs. Also,
there have been egg safety education campaigns specifically tailored
for the retail sector. The following sections describe these egg safety
measures.
1. Refrigeration of Shell Eggs
    The EPIA was amended in 1991 (Public Law 102-237) to require that
shell eggs packed for the ultimate consumer be stored and transported
under refrigeration at an ambient temperature (i.e., the air
temperature maintained in an egg storage facility or transport vehicle)
not to exceed 45 [deg]F. The 1991 Amendments to the EPIA also require
that labels on egg containers indicate that refrigeration of eggs is
required. Subsequently, USDA's FSIS amended its regulations to require
shell egg handlers to store and transport shell eggs packed in
containers destined for the ultimate consumer under refrigeration at an
ambient temperature of no greater than 45 [deg]F (7.2 [deg]C) (63 FR
45663). In the FSIS regulation, an egg handler is defined as any
person, excluding the ultimate consumer, who engages in any business in
commerce that involves buying or selling any eggs
 
[[Page 56828]]
 
(as a poultry producer or otherwise), or processing any egg products,
or otherwise using any eggs in the preparation of human food. In 9 CFR
590.5, FSIS defines an ultimate consumer as any household consumer,
restaurant, institution, or other party who has purchased or received
shell eggs or egg products for consumption. This regulation became
effective August 27, 1999.
    FSIS' regulation does not require the ultimate consumer, including
restaurants and institutions, to maintain shell eggs under
refrigeration. Consequently, we concluded that it was necessary to
require that shell eggs be kept refrigerated throughout retail
distribution. On December 5, 2000, we published a final rule requiring
that retail establishments, such as grocery stores, farm stands,
restaurants, schools, and nursing homes, promptly refrigerate eggs upon
receipt and store and display eggs at an ambient temperature of 45
[deg]F (7.2 [deg]C) or less (65 FR 76092).
2. Labeling of Shell Eggs
    In an effort to inform consumers of the risks associated with
consuming raw or undercooked eggs, we require that egg cartons carry
safe handling instructions (21 CFR 101.17(h)). All eggs not
specifically processed to destroy Salmonella must carry the following
safe handling statement: ``SAFE HANDLING INSTRUCTIONS: To prevent
illness from bacteria: keep eggs refrigerated, cook eggs until yolks
are firm, and cook foods containing eggs thoroughly.''
3. The FDA Food Code
    Through the Food Code, FDA endeavors to assist those local, State,
tribal, and Federal governmental jurisdictions assuming primary
responsibility for preventing foodborne illness and for licensing and
inspecting establishments within the retail segment of the food
industry. The Food Code, published by FDA, is not Federal law or
regulation, and is not preemptive. Rather, it represents our best
advice to States and local authorities to ensure that food at the
retail level is safe, properly protected, and properly represented
(i.e., is what it is purported to be). The Food Code provides guidance
on food safety, sanitation, and fair dealing that can be uniformly
adopted for the retail segment of the food industry. The document is
the cumulative result of the efforts and recommendations of many
contributing individuals with years of experience. These individuals
represent a diverse group of regulators, educators, industry leaders,
and consumer representatives acting through their agencies, companies,
professional groups, or trade organizations.
    Although the Food Code provisions are not Federal requirements,
they are designed to be consistent with Federal food laws and
regulations. The Food Code is written so that all levels of government
can easily adopt the language of the Food Code into a legal
requirement.
    All segments of the food industry and Federal, State, and local
governments share the responsibility to ensure food provided to the
consumer is safe and does not become a vehicle for a disease outbreak
or the transmission of communicable disease. By sharing in this
responsibility, government and industry can ensure consumer
expectations are met, and food is prepared in a sanitary environment,
properly presented, and not adulterated.
    The Food Code provides advice on how to prevent foodborne illness
based on information obtained from CDC investigations. CDC has
identified risk factors, such as unsafe sources, inadequate cooking,
improper holding, contaminated equipment, and poor personal hygiene,
which may lead to foodborne outbreaks. CDC further established five key
public health interventions to protect consumer health: (1)
Demonstration of knowledge, (2) employee health controls, (3)
controlling hands as a vehicle of contamination, (4) time and
temperature parameters for controlling pathogens, and (5) consumer
advisories.
    FDA revises sections of the Food Code every 2 years, and publishes
the revision either as a supplement (most recently in 2003) to the
existing edition or as a new edition (most recently in 2001), based on
the extent of revision. Each new edition incorporates the provisions of
supplements issued between editions. The next revision of the Food Code
will be in 2005. Provisions relevant to egg safety can be found in the
2001 Food Code in sections 3-202.11, 3-202.13, 3-202.14, 3-302.13, 3-
401.11, 3-603.11, and 3-801.11.
4. Egg Safety Education Efforts
    Consumer food safety surveys conducted in 1993, 1998, and 2001 by
FDA and FSIS suggested that consumers are less aware of or concerned
about risks associated with eggs than they are of risks associated with
other foods (Refs. 23 and 24). The data indicate that people are most
likely to follow recommended practices when handling fish, somewhat
less likely when handling meat or chicken, and much less likely to
follow recommended practices when breaking eggs. In fact, the majority
of people (65 percent) do not wash their hands with soap after breaking
raw eggs (Refs. 23 and 24).
    Comparing the 1998 survey findings with those of 1993, improvement
in the safe handling of eggs by people 61 and older lagged considerably
behind that of people 18 to 25 years old. The younger group showed a 42
percent improvement versus 9 percent for the older group. The 2001
survey showed no significant difference in consumers' egg-handling
behavior from 1998 (Ref. 24).
    In consideration of the survey findings, we developed a strategy
for an education campaign on egg safety that targeted both the general
public and at-risk populations. We began the campaign with the July 1,
1999, release of FDA's egg labeling and refrigeration proposed rule to
take advantage of media and public interest in safe handling
instructions for shell egg labels and refrigeration requirements for
eggs at retail establishments. We prepared a video news release (VNR)
to inform consumers of the proposed regulations and to alert them to
the potential risks of, and steps to take to avoid, undercooked eggs.
The VNR was released in conjunction with the July 1999 announcement of
the proposed egg labeling and refrigeration rule.
    To provide a basic source of print information for consumers on
eggs and egg safety, we developed a fact sheet, ``Food Safety Facts for
Consumers: Playing It Safe With Eggs,'' which was released in July
1999. The fact sheet covers safe buying, handling, preparation, and
storage of eggs and egg dishes, as well as information on how to avoid
the hidden risks in foods that contain raw or lightly cooked eggs. A
corresponding fact sheet was developed for food service personnel,
entitled ``Food Service Safety Facts: Assuring the Safety of Eggs and
Egg Dishes Made From Raw, Shell Eggs,'' and was released in September
1999.
    The consumer fact sheet was targeted to general consumers,
especially parents of young children and older Americans. The food
service fact sheet was targeted to institutional preparers of food for
children, the elderly, and immunocompromised individuals. To reach the
target audience, the fact sheets were distributed to the print and
electronic media, 83,000 day care centers, 13,000 nursing home
directors, school nurses, FDA field staff, extension agents, State and
local health agencies, and food preparation trade associations. Both
fact sheets are posted on FDA's Web site http://www.foodsafety.gov.
 
    Egg safety information also is incorporated into other food safety
 
[[Page 56829]]
 
education initiatives. For example, the widely distributed English and
Spanish Fight BAC! brochures produced by the public-private Partnership
for Food Safety Education, of which FDA is a member, include safe egg
cooking information. The Partnership's Virtual Toolbox, available on
the fightbac.org Web site, features egg safety information prominently
among a wide range of other education materials for use by health
educators.
    We initiated a second phase of the egg safety education campaign
after publishing the final rules on safe handling labels and
refrigeration at retail. Our strategy remained unchanged; we targeted
the general public and at-risk populations. Our campaign message
focused attention on the new labels on eggs, the potential for human
sickness caused by bacteria from fresh eggs from any source, and the
safety of eggs if selected, stored, and prepared properly.
    In addition to the press information FDA distributed about the
regulations, we prepared and distributed a range of consumer education
materials, including a video news release; a public service
announcement/flier sent to 600 publications specializing in health,
food, elderly issues and parenting, as well as specialized health
information providers, such as the National AIDS Clearinghouse and
Hotline, the American Cancer Society and National Cancer Hotline, and
the Arthritis Foundation; a consumer brochure; and a drop-in feature
article in English and Spanish. All consumer education materials are
available on our Web site.
    We currently are distributing educational materials we developed
for food service and food retail personnel incorporating existing FDA
regulations and recommendations pertaining to egg safety. These
materials consist of a brochure entitled ``Assuring the Safety of Eggs
and Menu and Deli Items Made From Raw, Shell Eggs--Information for
Retail Food Stores and Food Service Operations,'' and a poster, ``Key
Temperatures for Egg Safety in Food Service Operations and Retail Food
Stores.'' Initially, 250 copies each of the brochure and the poster
were sent to State Egg Program Directors, State Food Service Program
Directors, FDA Regional Food Specialists, and FDA Public Affairs
Specialists in the field to use in generating demand for the
information.
    Since the initial mailing, orders have been steady. As of August
2004, approximately 202,000 posters and 246,000 brochures had been
distributed. At least one State, Kentucky, ordered enough (22,000) to
provide copies to each retail food store, food service establishment
and food manufacturing firm in the State. In addition, the brochure,
``Assuring the Safety of Eggs and Menu and Deli Items Made from Raw
Shell Eggs--Information for Retail Food Stores and Food Service
Operations,'' was mailed to 70,300 restaurants in September 2002.
    Consumer information on safe handling of eggs is also included in
two widely distributed FDA consumer publications, To Your Health: Food
Safety for Seniors and the Fight BAC! Flyer (originally developed as a
patient handout for the AMA/ANA/FDA/CDC/USDA health professional
education kit, Kiagnosis and Management of Foodborne Illnesses).
Distribution of consumer and foodservice educational materials
continues at professional meetings and conferences, most recently the
2003-2004 meetings of the American Dietetic Association, American
Public Health Association, Food Safety Summit, National WIC
Association, American College of Physicians, National Restaurant
Association, American Nurses Association, National Association of Area
Agencies on Aging, National Wellness Conference, and International
Association for Food Protection.
 
E. The SE Risk Assessment
 
    In December 1996, FSIS and FDA, with representatives from other
government agencies and academia, began a comprehensive risk assessment
in response to an increasing number of human illnesses associated with
the consumption of eggs (Ref. 15). Following are the objectives of the
risk assessment: (1) Establish the unmitigated (without any SE-
prevention measures risk of foodborne illness from SE, (2) identify and
evaluate potential prevention strategies, (3) identify data needs, and
(4) prioritize future data collection efforts.
    A team of scientists developed a quantitative model to characterize
the risks associated with the consumption of eggs contaminated
internally with SE, using information obtained from academic,
government, and industry sources, along with scientific literature. The
risk assessment model consists of five discrete modules (Egg Production
Module, Shell Egg Module, Egg Products Module, Preparation and
Consumption Module, and Public Health Module) that may be used
independently to evaluate the effect of variable changes during a
particular stage of the farm-to-table continuum. However, the overall
model encompasses the entire continuum, from the chicken through egg
production, to egg consumption and human illness. The model predicted
that using any one intervention (e.g., egg refrigeration or consumer
egg safety education) could achieve a modest reduction in human SE
illnesses, while using multiple interventions could achieve a more
substantial reduction for those interventions tested (Ref. 15). Though
on-farm mitigations, as such, were not specified in the risk
assessment, various inputs to the model were tested for cooling and
refrigeration of eggs, including cooling eggs immediately after lay.
The SE risk assessment concluded that a broad-based policy,
encompassing interventions from farm to table, is likely to be more
effective in eliminating egg-associated SE illnesses than a policy
directed solely at one stage of the egg production-to-consumption
continuum.
 
F. Advance Notice of Proposed Rulemaking on Salmonella Enteritidis in
Eggs
 
    In the Federal Register of May 19, 1998 (63 FR 27502), FDA and USDA
jointly published an advance notice of proposed rulemaking (ANPRM)
seeking to identify farm-to-table actions that would decrease the food
safety risks associated with eggs. The agencies requested comment on
these egg safety actions. In section III.M of this document, we respond
to comments related to on-farm measures to prevent SE contamination of
eggs. We respond to comments related to retail standards to reduce the
risk of egg-associated SE illnesses in section IV.E of this document.
 
G. Egg Safety Public Meetings
 
    To address the public health problem of SE, FDA and FSIS decided to
coordinate efforts in a farm-to-table approach. Consistent with each
agency's legislative authority, FDA would address egg safety issues at
the producer and retail levels and FSIS would address these issues at
egg packers and processors. On March 30, 2000, and April 6, 2000, FDA
and FSIS held public meetings in Columbus, OH, and Sacramento, CA,
respectively, to gather information for reducing or eliminating the
risk of SE in eggs. Comments on specific egg safety questions were
solicited in a Federal Register document (65 FR 15119, March 21, 2000).
Interested persons were given until April 20, 2000, to comment.
    In an effort to expand the public process and build upon the two
public meetings, FDA and FSIS held a public meeting (65 FR 42707, July
11, 2000) on July 31, 2000, in Washington, DC. The purpose of this
meeting was to obtain
 
[[Page 56830]]
 
comments on the agencies' current thinking on approaches to ensure egg
safety from farm to table. A document outlining the agencies' current
thinking on on-farm egg safety standards, packer/processor egg safety
standards, and retail egg safety standards was made available at the
public meeting and on the agencies' food safety Web site
http://www.foodsafety.gov. Interested persons were given until August 14,
 
2000, to comment.
    We are responding to comments from the public meetings in Columbus,
OH, and Sacramento, CA, and the current thinking meeting in Washington,
DC in this document. We have responded to comments related to on-farm
measures to prevent SE contamination of eggs in section III.M of this
document and to comments on retail standards to prevent egg-associated
SE illnesses in section IV.E of this document.
 
H. Current On-Farm Practices
 
    Most of the information on current on-farm practices comes from the
APHIS National Animal Health Monitoring System (NAHMS) Layers '99 Study
(the Layers study) and information on voluntary egg QA programs.
1. The Layers Study
    In 1999, NAHMS conducted a study addressing national table egg
layers and SE (Refs. 25, 26, and 27). The aim of the study was to
include information from States that account for at least 70 percent of
the animal and farm population in the United States. Fifteen States
(Alabama, Arkansas, California, Florida, Georgia, Indiana, Iowa,
Minnesota, Missouri, Nebraska, North Carolina, Ohio, Pennsylvania,
Texas, and Washington) were chosen to participate in the study. These
15 States represented 82 percent of the 1997 U.S. table egg layers. The
States, and the operations surveyed within those States, were chosen
from a ranking of table egg layers summarized in a 1997 National
Agricultural Statistics Service (NASS) survey of egg layers and egg
production. NASS maintains information on laying operations that have
more than 30,000 hens; therefore, each operation participating in the
Layers study had more than 30,000 laying hens, although all hens may
not have been on one farm.
    a. Production facilities. Egg laying operations varied considerably
in size and style of poultry house. Of the farm sites surveyed by the
Layers study, approximately 34 percent had fewer than 50,000 layers, 29
percent had 50,000 to 99,999 layers, 20 percent had 100,000 to 199,999
layers, and 17 percent had 200,000 or more layers. One-third of farm
sites surveyed had only one layer house, while 16.5 percent had 6 or
more layer houses.
    Within a poultry house, style also varied. Approximately one-third
of all poultry houses had six or more banks of cages. A bank is all
cages between two walkways or between a walkway and a wall.
Approximately 40 percent of houses had 4 or more vertical levels of
cages, while approximately 25 percent had only one level. Less than 1
percent of all poultry houses were cage-free.
    Manure handling varied with house style and also varied regionally.
Houses with a manure pit at ground level with the house above (high
rise) accounted for 63 percent of houses in the Great Lakes region and
48 percent of houses in the Central region. In the Southeast, 40
percent of farm sites flushed manure to a lagoon. Nonflush scraper
systems were used on 44 percent of farms in the West region.
    b. Chicks and pullets. When a poultry house is repopulated with new
laying hens, most of the new layers come from a pullet raising
facility. A pullet is defined in the Layers study as a chicken less
than 20 weeks of age. Less than 10 percent of layer farms raised
pullets at the layer farm site, although some layer farms had their own
pullet raising facilities at other locations.
    The vast majority (95 percent) of pullets in pullet raising
facilities came as chicks from National Poultry Improvement Plan (NPIP)
monitored breeder flocks. USDA's NPIP is a cooperative Federal-State-
industry mechanism intended to prevent and control egg-transmitted,
hatchery-disseminated poultry diseases. NPIP has different monitoring
programs for many avian diseases and pathogens, including SE, and all
flocks in the program must meet the qualifications for ``U.S. Pullorum-
Typhoid Clean'' classification (9 CFR 145.23(b)). Therefore, the fact
that the chicks were from NPIP-monitored breeder flocks does not mean
that they were from certified ``U.S. S. Enteritidis Monitored'' breeder
flocks (9 CFR 145.23(d)).
    Many pullet raising facilities in the Layers Study had their own
programs for SE monitoring. In the West region, 83 percent of farms
obtained layers from SE-monitored pullet facilities, and 70 percent of
layers on all farms came from SE-monitored pullet facilities. Pullet
facilities used one or more of the following methods to monitor SE: (1)
Dead chick/chick paper testing, (2) environmental culture, (3) bird
culture, and (4) serology. Some pullet facilities used competitive
exclusion products\2\ and/or vaccines to protect pullets against SE.
---------------------------------------------------------------------------
 
    \2\ Competitive exclusion is a strategy in which benign bacteria
are introduced into the gut to prevent a pathogen from colonizing
the gut by blocking all of the sites on the walls of the intestines
where the pathogen would attach.
---------------------------------------------------------------------------
 
    c. Production. In 1997, the average flock was placed for its first
production cycle at 17.5 weeks of age. Flocks in their first production
cycle reached peak production around 29 weeks of age. At peak
production, the average maximum number of eggs produced was 90 eggs per
100 hens per day. Induced molting was used on many farms (83 percent of
farm sites) to increase the laying cycles of the hens. In the West and
Southeast regions, 95 percent or more of farms molted birds, while in
the central region just over half (57 percent) of the farms molted
birds. On average, molted flocks ended production at 111 weeks of age,
while nonmolted flocks ended production at 74 weeks of age.
    d. Feed and water. Approximately half (48 percent) of layer houses
used a chain feed delivery system. Well water was used for watering
birds by 66 percent of farms. The percentage of farms that tested feed
for SE varied regionally. For example, finished feed was tested for SE
by 26 percent of farms in the central region, and 68 percent of farms
in the West. Approximately 75 percent of farms in both the West and
Southeast regions tested feed ingredients for SE.
    e. Biosecurity. Approximately two-thirds of farms instituted
biosecurity measures that did not allow visitors without a business
reason to enter poultry houses. Sixty-two percent of farms allowed
business visitors provided they had not been on another poultry farm
that day. Most farms (76 percent) required that visitors wear clean
boots. At the majority of farms, employees were required not to be
around other poultry and not to own their own birds.
    f. Pest control. The Layers study estimated that rodents and flies
had access to feed in feed troughs on nearly all farms. Fly control was
practiced on 90 percent of all farms; baiting was the most common form
of fly control (72 percent of farms). Essentially all farms used some
type of rodent control. Chemicals and baits were used by 93 percent of
farms for rodent control. Professional exterminators were used on less
than 15 percent of farms that used rodent control. Producers rated
almost 30 percent of farms as having a moderate or severe problem with
mice and almost 9 percent as having a moderate or severe problem with
rats.
 
[[Page 56831]]
 
    g. Depopulation practices. Depopulation of a poultry house is the
most opportune time for a producer to thoroughly clean and disinfect
the house. Most farms did some sort of cleaning between flocks.
Essentially all farms emptied feeders, 91 percent emptied feed hoppers,
81 percent flushed water lines, 79 percent dry cleaned cages, walls,
and ceilings, and 71 percent cleaned fans and ventilation systems.
Approximately one-third of farm sites never cleaned or disinfected egg
belts/elevators between flocks. Down time between flocks varied
regionally; most farms had a down time of more than 11 days, although
some were down for less than 4 days.
    h. Testing for SE. A 1994 NAHMS survey of farms revealed that
almost 16 percent of farms tested for SE. The Layers study showed that,
in 1997, 58 percent of farms tested for SE. The number of farms testing
for SE varied by region. In the Southeast, almost 84 percent of farms
had an SE testing program, while in the West only 26 percent had an SE
testing program. The number and regional distribution of farms doing
testing for SE is very similar to the number and distribution of farms
participating in an egg quality assurance (QA) program.
    i. NAHMS Study Testing for SE. In 1994, NAHMS undertook its own
survey for SE in layer houses. It found that 7 percent of layer houses
were positive for SE, based on environmental sampling. Only 4 percent
of houses with fewer than 100,000 laying hens were positive for SE,
while 16 percent of houses with greater than 100,000 laying hens were
SE-positive. The study indicated that the number of rodents, cleaning
and disinfection procedures, biosecurity, and the age of the flock were
all related to the SE status of the layer house.
2. Voluntary Egg QA Programs
    The Layers study found that 51 percent of all farm sites
participated in an egg QA program sponsored by a State or commodity
group (e.g., United Egg Producers (UEP)). Based on this information, we
estimate that approximately 50 percent of the eggs in the United States
are produced under an egg QA program.
    In 1992, Congress provided special funding to USDA to begin the SE
Pilot Project (SEPP). The SEPP was one of the first egg QA programs in
the United States. The pilot project phase operated for 2 years and
then, in 1994, the SEPP became the PA Egg QA Program (PEQAP).
Currently, there are several voluntary egg QA programs operated and
administered by states or other organizations (Refs. 28, 29, 30, 31,
and 32). The states that have programs include PA, MD, NY, OH, SC, AL,
OR, CA and the New England region. The UEP has a program called the UEP
``Five Star'' Total QA Program (Ref. 33) and the United States Animal
Health Association has a protocol entitled ``National Standardized
Salmonella Enteritidis Reduction Program for Eggs'' (Ref. 34). In
addition, certain egg companies operate an egg QA program within their
own facilities (Ref. 26).
    Currently the egg QA programs that exist are voluntary for
producers. All programs have similar requirements but vary in how they
implement these requirements. All programs require use of chicks from
NPIP ``U.S. S. Enteritidis Monitored'' breeders or equivalent,
biosecurity, rodent control, and cleaning and disinfection of poultry
houses. Most programs require some environmental testing; the amount
varies among programs from once to four or five times during the life
of a flock. If an environmental test is SE-positive, several programs
require egg testing, with diversion if the egg testing is SE positive.
Several programs also have State government oversight and recordkeeping
requirements. All existing QA programs have some educational programs
for participants. There is data indicating that QA programs have been
effective in reducing SE contamination in poultry houses (see
discussion in section III) and the provisions in this proposal are
modeled on those successful programs.
 
I. Petitions to the Agency
 
    FDA has received several citizen petitions relevant to this
proposed rulemaking.
1. Center for Science in the Public Interest
    We received a petition from the Center for Science in the Public
Interest (CSPI) (filed May 14, 1997, Docket No. 97P-0197) requesting,
among other things, that FDA require programs to reduce the risk of SE
for all egg producers. In support of its request, CSPI stated that SE
in eggs is a serious health problem, illnesses caused by SE in the
United States have increased, and consumers are at risk of illness from
SE in raw or undercooked eggs. CSPI requested that producers be
required to implement on-farm SE prevention programs using Hazard
Analysis and Critical Control Point (HACCP) principles and modeled
after the PEQAP program. CSPI also requested the following program
components: (1) Chicks from SE-monitored breeder flocks, (2)
environmental sampling for SE of chicks, pullets, and twice during the
life of layers, (3) cleaning and disinfection of poultry houses if
environmental tests are SE positive, (4) egg testing if the environment
is positive with diversion of SE-positive eggs to pasteurization
plants, (5) biosecurity, (6) rodent control program, (7) program to
control SE in feed, and (8) refrigerated storage of eggs at 41[deg]F to
ensure that SE cannot multiply. In addition, CSPI requested that
producers be required to keep records that would be verified by FDA to
indicate compliance with SE prevention programs.
2. Rose Acre Farms, Inc.
    We received a petition from Rose Acre Farms, Inc. (filed November
4, 1996, Docket No. 96P-0418) requesting, among other things, that we
issue a regulation requiring ``Best Practices'' of egg producers. The
petitioner stated that ``best practices'' are a set of procedures used
by egg producers to control the presence of SE to the lowest level
practical. Rose Acre Farms, Inc. suggested that the ``best practices''
might include: (1) Environmental testing of a poultry house for SE, (2)
egg testing if the environmental testing is SE-positive, (3) cleaning
and disinfection of poultry houses, (4) a program to reduce SE in feed,
(5) vaccines, (6) rodent control, (7) biosecurity, (8) egg washing, (9)
recordkeeping requirements, and (10) use of appropriate third parties
to audit compliance with program elements. The petitioner requested
that ``best practices'' programs be accredited individually by FDA and
USDA. The petitioner also requested that eggs produced under an
accredited program could never be deemed adulterated, regardless of the
outcome of environmental testing or implication of a flock in a
traceback.
    In addition, Rose Acre Farms, Inc. requested that the agency place
greater emphasis on consumer education and retail foodservice. The
petitioner suggested that FDA revise the FDA Food Code to prohibit
pooling of more than three shell eggs by any restaurant or foodservice
institution. For egg dishes requiring pooling of more than three eggs,
pasteurized product would have to be used.
3. United Poultry Concerns, Inc. and the Association of Veterinarians
for Animal Rights
    We received a petition from United Poultry Concerns, Inc., and the
Association of Veterinarians for Animal Rights (filed April 14, 1998,
Docket No. 98P-0203/CP1) requesting that FDA eliminate forced molting
of laying birds in the United States. The petitioners requested that
forced molting be
 
[[Page 56832]]
 
stopped because it is cruel. The petitioners also stated that the
stress of forced molting promotes a systemic disease in birds in the
form of SE that renders products derived from these birds a health risk
to consumers.
    In support of the request to stop forced molting because it
promotes SE-infection in layers and renders products from these birds a
health risk to consumers, the petitioners stated that forced molting
impairs the immune response of laying hens, which invites colonization
of the intestine and other organs by SE. The petitioners also cited
studies that they believe demonstrate SE is shed in large numbers in
the feces of infected, molted birds and spreads more rapidly among
molted laying hens than among nonmolted ones. The petitioners stated
that molted birds are more susceptible to SE infection from rodents,
which have been shown to harbor SE in the poultry house environment.
The petitioners also cited information that indicates feathers can
carry SE and that molted birds engage in abnormal feather pecking
because of the molting conditions.
    United Poultry Concerns, Inc. and the Association of Veterinarians
for Animal Rights also requested that forced molting be eliminated
because the living conditions under which forced molting is conducted
are inherently disease producing. The petitioners cited studies that
indicate that concentrated confinement of birds in cages allows 48
square inches of living space per bird. The petitioners stated that the
confined living space puts an additional stress on birds that lowers
immune response and exacerbates an SE infection if present.
 
III. The Proposal to Require SE Prevention Measures for Egg Production
 
A. Rationale for Proposal
 
    The incidence and geographical distribution of egg-associated SE
illnesses have made SE a significant public health concern. Although
there are Federal rules requiring refrigeration of shell eggs packed
for the ultimate consumer (FSIS) and at retail (FDA) to limit the
growth of SE that may be present, there are no Federal requirements to
address the introduction of SE into the egg during production. The
Salmonella Enteritidis Risk Assessment Team (Ref. 15) estimated that 1
in 20,000 eggs are contaminated with SE. Based on annual egg production
(Ref. 20), this means that 3.3 million SE-contaminated shell eggs may
be produced annually. Thirty percent of total egg production is used in
egg products (Ref. 20), leaving an estimated 2.3 million SE-
contaminated shell eggs that may reach the consumer. Therefore,
interventions that can reduce the number of SE-contaminated eggs
produced are warranted from a public health standpoint.
    As discussed in section II.I of this document, several States and
organizations have established voluntary egg QA programs that show
great promise in reducing the incidence of egg-associated SE illnesses
in specific regions of the country. Data from the PEQAP program show
that after three years on the program the number of poultry houses that
had environmental samples positive for SE decreased from 38 percent in
1992 to 13 percent in 1995 (Refs. 35 and 36). PEQAP data initially
indicated that approximately 50 percent of the flocks in the program
had environmental samples positive for SE at some time during flock
life, whereas in 1996 approximately 15 percent of PEQAP flocks had
environmental samples positive for SE at some time during flock life
(Ref. 36). From 1992 to 1995, there was a decrease in the SE isolation
rate in humans in the three-State region (NY, NJ, PA) that constitutes
the market for PA's eggs. This decrease in isolation rate has been
attributed to the PEQAP program and consumer education (Refs. 35 and
36).
    Currently in the United States, only 50 percent (Ref. 26) of shell
eggs are produced under voluntary egg QA programs and the regions that
have voluntary egg QA programs are not necessarily the regions that
have had recent outbreaks of SE illnesses (Ref. 9). Therefore, we have
 
tentatively concluded that a proposal to require that producers of
shell eggs for the table market, other than those producers whose eggs
are treated or sold directly to consumers or who have fewer than 3000
laying hens, comply with all of the proposed SE prevention measures
would exclude SE on the farm and, thus, remove sources of SE
contamination of shell eggs.
 
B. Shell Egg Producers Covered by Proposed 21 CFR Part 118
 
    The proposed requirements for SE prevention measures do not apply
to producers who sell all of their eggs directly to consumers (e.g.,
roadside stand operators) or producers with fewer than 3,000 laying
hens. Although we could have proposed to require these producers to
implement SE prevention measures, we opted not to do so because the
sales by these producers do not contribute significantly to the table
egg market. In addition, we have no information indicating that an
outbreak of SE illness has ever been caused by eggs sold directly from
farmer to consumer or from a producer with fewer than 3,000 laying
hens. We are soliciting comment on the exemption for producers with
fewer than 3,000 laying hens and producers who sell all of their eggs
directly to consumers. Specifically, should these producers be covered
by some or all of the SE prevention measures?
    We are proposing in Sec.  118.1(a) (21 CFR 118.1(a)) that if you
are a producer with 3,000 or more laying hens at a particular farm
whose eggs are going to the table egg market (eggs consumed as shell
eggs, rather than eggs used in egg products), and not all of your eggs
receive a treatment as defined in Sec.  118.3, then you must comply
with all of the requirements in proposed part 118 for eggs produced on
that farm. You may be selling your eggs to restaurants or other
foodservice establishments where the presence of SE-contaminated eggs
could cause a severe public health threat by striking many people at
one time. In establishments where eggs are combined to make food items,
one SE-contaminated egg can contaminate a dish that will be served to
many people. Thus, it is necessary for you to use SE prevention
measures on your farm to prevent SE contamination of your eggs and
illness in consumers.
    It is our understanding that it would be difficult for a producer
to keep eggs produced from individual poultry houses on a farm separate
from other eggs that may be handled differently. For example, a
producer could not easily segregate eggs destined for a breaking plant
from three poultry houses, which would not have to comply with the SE
prevention measures, from eggs not destined for a breaking plant from
two other poultry houses, which would have to follow all of the SE
prevention measures. Furthermore, it would be difficult for the
producer to maintain proper biosecurity for the two poultry houses
subject to all of the SE prevention measures if there were three other
poultry houses on the farm not employing the same biosecurity measures.
Therefore, we have tentatively concluded that, unless all of the eggs
from a particular farm receive a treatment as defined in Sec.  118.3 or
are sold directly to consumers, producers who have 3000 or more laying
hens on that farm must comply with all of the requirements of proposed
part 118 if the eggs are produced for the table egg market.
    We are proposing in Sec.  118.1(b) that if you are a producer who
produces eggs on a farm that will all receive a treatment as defined in
Sec.  118.3 and you
 
[[Page 56833]]
 
have 3,000 or more laying hens, you must comply only with the
refrigeration requirements for on-farm storage found in proposed Sec.
118.4(e). As defined in proposed Sec.  118.3, ``treatment'' means a
technology or process that achieves at least a 5-log destruction of SE
for shell eggs, or the processing of egg products in accordance with
the Egg Products Inspection Act. It is important that the load of SE
within a contaminated egg be kept low prior to treatment so that the
level of kill given to that egg by the treatment will be sufficient.
For example, if the in-shell pasteurization process for eggs is
designed to reduce the level of SE in an egg by ``x'' logs, then the
incoming SE load of that egg must be less than ``x'' logs for the
treatment to be successful.
    Refrigeration at 45 [deg]F within 36 hours of laying has been shown
to slow the multiplication of SE within an egg substantially and is
discussed in section III.E.5 of this document. We have tentatively
concluded that, prior to treatment for SE destruction, producers who
have 3,000 or more laying hens must keep eggs under refrigeration at 45
[deg]F maximum if they are held at the farm for more than 36 hours.
Although we are not proposing to require that producers who treat all
of their eggs to achieve the required destruction of SE comply with all
of the SE prevention measures, we strongly encourage all egg producers
to follow non-mandatory SE prevention measures during egg production.
 
C. Proposed Compliance Dates for Shell Egg Producers of Various Sizes
 
    We are proposing that, if a producer has 50,000 or more laying
hens, according to the requirements of proposed part 118, compliance
would be required 1 year after the date of publication of the final
rule in the Federal Register. Although producers who currently
participate in voluntary QA programs may already have some of the
provisions in place, we recognize that producers will need time to
implement SE prevention measures, train individuals to implement the
measures, and begin to incorporate them in their farm practices. We
believe that 1 year from the date that any final rule is published is a
realistic timeframe for producers that have 50,000 or more laying hens
on farm to put measures in place.
    We recognize that smaller producers (those with fewer than 50,000
but at least 3,000 laying hens) may need more time to comply with the
requirements of proposed part 118. We tentatively have concluded that
it is reasonable to allow for extended compliance periods for smaller
producers. For smaller producers, compliance would be required 2 years
after the date of publication of the final rule in the Federal
Register.
 
D. Definitions
 
    We are proposing in the introductory paragraph of Sec.  118.3 that
the definitions and interpretations of terms in section 201 of the
FFDCA, unless these terms are redefined in this part, are applicable to
these terms when used in proposed part 118.
    We are proposing in Sec.  118.3 that the term ``biosecurity'' means
a program to ensure that there is no introduction or transfer of SE
onto a farm or among poultry houses. As specified in proposed Sec.
118.4(b), a biosecurity program includes, but is not limited to,
limiting visitors to a farm, keeping animals and wild birds out of
poultry houses, requiring personnel to wear protective clothing, and
ensuring that equipment is not moved among poultry houses or, if it is
so moved, that it is adequately cleaned before it is moved.
    We are proposing in Sec.  118.3 that the term ``farm'' means all
poultry houses and the grounds immediately surrounding the poultry
houses covered under a single biosecurity program. We intend the term
``farm'' to encompass an entire farming operation at a single
geographic location. We do not intend to allow, by this definition,
multiple ``farms'' covered by multiple biosecurity programs at a
particular geographic site. If we did allow multiple farms at a
geographic location, a producer could have part of the operation under
SE prevention measures for eggs going to the table egg market and part
of the operation under no such measures for eggs going to treatment.
Such an outcome is contrary to our rationale set forth for proposed
Sec.  118.1(a).
    We are proposing in Sec.  118.3 that the term ``flock'' means all
laying hens within one poultry house. We recognize that laying hens of
different ages sometimes are placed in the same poultry house. Research
has indicated that once SE is introduced into a poultry house it
spreads among the laying hens in that house (Refs. 37 and 38).
    We are proposing in Sec.  118.3 that the term ``group'' means all
laying hens of the same age within one poultry house. This term
particularly applies to laying hens of the same age that comprise part
of a multi-aged flock of laying hens within one poultry house.
    We are proposing in Sec.  118.3 that the term ``induced molting''
means molting that is artificially initiated. Induced molting is done
to improve egg production and egg quality.
    We are proposing in Sec.  118.3 that the term ``laying cycle''
means: (1) The period of time that a hen begins to produce eggs until
it undergoes induced molting or is permanently taken out of production;
and (2) the period of time that a hen produces eggs between successive
induced molting periods or between induced molting and the time that
the hen is permanently taken out of production.
    We are proposing in Sec.  118.3 that the term ``molting'' means a
life stage during which a hen stops laying eggs and sheds its feathers.
    We are proposing in Sec.  118.3 that the term ``pest'' means any
objectionable animals or insects, including, but not limited to, birds,
rodents, flies, and larvae. This is also the definition of ``pest''
found in 21 CFR part 110.
    We are proposing in Sec.  118.3 that the term ``positive flock''
means a flock that produced eggs that tested positive for SE and
applies until that flock meets the egg testing requirements in proposed
Sec.  118.6 to return to table egg production.
    We are proposing in Sec.  118.3 that the term ``positive poultry
house'' means a poultry house from which there has been an
environmental test that was positive for SE during a laying cycle. A
poultry house would be considered positive until it had been cleaned
and disinfected, even if an environmental test is positive for SE prior
to a molt and then is SE-negative at the post-molt environmental test.
A negative environmental test after a molt does not invalidate the
initial positive environmental test or necessarily indicate that SE is
no longer present. Data from the PEQAP program have indicated that
cleaning and disinfection procedures can decontaminate an SE-positive
poultry house (Ref.39). Therefore, we have tentatively concluded that a
poultry house that has had an SE-positive environmental test must be
considered positive until it has been cleaned and disinfected according
to proposed Sec.  118.4(d).
    We are proposing in Sec.  118.3 that the term ``poultry house''
means a building, other structure, or separate section within one
structure used to house poultry. We have also tentatively concluded
that, for structures comprising more than one section containing
poultry, each section must have biosecurity procedures in place to
ensure that there is no introduction or transfer of SE from one section
to another. In addition, each section must be enclosed and separated
from the other sections. We interpret ``enclosed and separated'' to
mean that sections must be separated from one another by walls. Thus,
under this proposed
 
[[Page 56834]]
 
definition, producers would have to limit their designation of
``sections'' representing separate poultry houses to areas that are
physically separate from one another. It would not be acceptable under
this proposed rule to designate areas that are separated, for example,
only by a walkway or a gate as separate poultry houses.
    We are proposing in Sec.  118.3 that the term ``producer'' means a
person who maintains laying hens for the purpose of producing shell
eggs for human consumption.
    We are proposing in Sec.  118.3 that the term ``shell egg (or
egg)'' means the egg of the domesticated chicken. This differs from the
definition of ``shell egg'' in the EPIA, because, unlike the EPIA
definition, FDA's definition does not cover shell eggs of the
domesticated turkey, duck, goose, or guinea. FDA is focusing its
resources on domesticated chicken eggs because they have been
associated with numerous outbreaks of foodborne illness.
    We are proposing in Sec.  118.3 that the term ``treatment'' means
technologies or processes that achieve at least a 5-log destruction of
SE for shell eggs or the processing of egg products in accordance with
the EPIA. In 1997, we recommended to AMS, in response to an AMS request
to FDA on criteria for shell egg pasteurization, that processors attain
a 5-log reduction in Salmonella in shell eggs in order for the eggs to
be considered ``pasteurized.'' We recommended the 5-log lethality based
on literature available at the time on naturally infected shell eggs
that indicated, under most storage conditions, an intact shell egg
could contain between 10\2\ and 10\3\ Salmonella organisms (Ref. 19).
FDA then added a 2-log safety factor to arrive at the recommendation
for a 5-log lethality. AMS published this standard in its Federal
Register notice on official identification of pasteurized shell eggs
(62 FR 49955, September 24, 1997).
    We are soliciting comment on whether a 5-log reduction or an
alternative approach to achieve an equivalent level of protection is
still appropriate to ensure the safety of shell eggs. We intend to work
with USDA to ensure that shell eggs and egg products are given adequate
treatments to destroy SE.
 
E. The SE Prevention Measures
 
    Data indicate that voluntary egg QA programs have contributed to a
decrease in SE in poultry houses and a decrease in SE illnesses. The
particular program (PEQAP) from which the data were gathered includes
provisions for chick and pullet procurement, biosecurity, rodent
control, refrigeration, cleaning and disinfection of poultry houses,
and monitoring of the poultry house environment through testing for SE
(Ref. 28). Although the individual provisions were not evaluated for
their relative importance, the PEQAP results indicate that, when used
together, the provisions resulted in a decrease in the prevalence of SE
within a poultry house (Ref. 35). Thus, the agency tentatively
concludes that SE prevention measures are necessary to reduce the
incidence of SE illness from consumption of shell eggs, when the eggs
are not treated to destroy SE.
    All of the provisions of proposed Sec.  118.4 apply to you if you
are a producer with at least 3,000 laying hens, you produce shell eggs
for the table market, and you do not sell all of your eggs directly to
consumers or treat all of your eggs to destroy SE as defined in
proposed Sec.  118.3 (Sec.  118.1(a)). We are proposing in Sec.  118.4
that shell egg producers described in Sec.  118.1(a) develop and
implement the following SE prevention measures: Provisions for
procurement of chicks and pullets, a biosecurity program, rodent, fly
and other pest control, cleaning and disinfection of poultry houses
that have had an environmental or egg test positive for SE, and
refrigerated storage of eggs at the farm.
    We also are proposing in Sec.  118.4 that the particular form that
SE prevention measures take be specific to each farm and poultry house
where eggs are produced. Depending upon whether there are multiple
poultry houses on a farm and whether the poultry houses vary in house
style and location, the SE prevention measures may vary among poultry
houses. For example, one poultry house may require certain rodent and
pest control measures that another poultry house may not require.
    Further, we are proposing that if you are a producer under section
Sec.  118.1(a), you must comply with the environmental and egg testing
requirements in Sec. Sec.  118.5 and 118.6, the sampling and testing
methodology requirements in Sec. Sec.  118.7 and 118.8, the
administration requirements in Sec.  118.9, and the recordkeeping
requirements in Sec.  118.10. We will discuss our rationale for
compliance with these requirements in the relevant sections of this
proposed rule.
1. Chicks and Pullets
    We are proposing in Sec.  118.4(a) that you must procure chicks and
pullets that came as chicks from breeder flocks that meet NPIP's
standards for ``U.S. S. Enteritidis Monitored'' status or equivalent
standards. The fact that SE can be transmitted via the transovarian
route means that chicks can be born SE-positive (Refs. 35 and 40).
Therefore, they may remain infected as pullets and be placed into
poultry houses as layers already carrying SE and then contaminate their
eggs and, in addition, pass SE on to other layers within the poultry
house (Refs. 38, 41, and 42). We tentatively have concluded that it is
necessary for you to procure chicks and pullets that came as chicks
from breeding flocks that meet NPIP's standards for ``U.S. S.
Enteritidis Monitored'' status (9 CFR 145.23(d)) or equivalent
standards in order to prevent SE contamination of shell eggs from SE-
positive chicks. Producers that procure pullets from a pullet-raising
facility need to have an assurance that those pullets came as chicks
from a breeder flock that meets NPIP's standards for ``U.S. S.
Enteritidis Monitored'' status or equivalent standards.
    USDA's NPIP is a cooperative Federal-State-industry mechanism for
controlling certain pathogens and poultry diseases. NPIP has
established ``U.S. S. Enteritidis Monitored'' standards (9 CFR
145.23(d)) from which the breeding-hatching industry may conduct a
program for the prevention and control of SE. Participation in the plan
is voluntary, except under 9 CFR part 82, subpart C, no hatching eggs
or newly-hatched chicks from egg-type chicken breeding flocks may be
moved interstate unless they are classified ``U.S. S. Enteritidis
Monitored'' under NPIP or meet equivalent standards.
    To be classified ``U.S. S. Enteritidis Monitored,'' under 9 CFR
145.23(d), a flock and the hatching eggs and chicks produced must come
from a ``U.S. S. Enteritidis Monitored'' flock, or meconium (first
bowel movement) from chick boxes and a sample of chicks that died
within 7 days after hatching must be examined and test negative for
Salmonella. Throughout the life of a ``U.S. S. Enteritidis Monitored''
flock, environmental and blood samples are taken at specified times and
examined for group D Salmonella (the group that includes SE). Breeder
flocks may be vaccinated with an SE bacterin, provided that 350 birds
remain unvaccinated until the flock is at least 4 months of age.
Hatching eggs produced by the flock are collected as quickly as
possible, sanitized or fumigated, and incubated in an approved
hatchery. The flock must also meet feed, facilities, and transport
requirements.
    A flock is not eligible for the ``U.S. S. Enteritidis Monitored''
classification if SE is isolated from a specimen taken from a bird in
the flock. Isolation of SE
 
[[Page 56835]]
 
from an environmental sample of a vaccinated or nonvaccinated flock
necessitates bird testing. If bird testing reveals no SE contamination,
then the flock qualifies for the classification. The classification may
be revoked at any time if procedures are not followed.
    We are aware that most producers purchase pullets from a pullet-
raising facility to repopulate a poultry house. Some of these pullet-
raising facilities have SE-monitoring programs (Ref. 25). We
specifically request comment on whether we should include in any final
rule based on this proposal, a requirement that producers certify that
pullets they procure have come from a facility that has an SE-
monitoring program. If so, what requirements should producers certify
that a pullet-raising facility has met in order to ensure that the
pullet raising facility has an adequate SE-monitoring program?
2. Biosecurity
    We are proposing in Sec.  118.4(b) that you develop and implement a
biosecurity program. Biosecurity refers to procedures that must be
instituted on farms to prevent SE from being transferred from the
environment into the poultry house or among poultry houses. Biosecurity
is a routine part of all existing egg QA programs and is aimed at
preventing the horizontal spread of SE. According to the Layers study
(Ref. 26), 66 percent of farm sites already practice some form of
biosecurity, and poultry houses where visitors were not allowed were
less likely to test positive for SE. The Swiss have identified control
of the horizontal spread (i.e., cross contamination from layer to layer
or poultry house to poultry house) of SE as a major success of their SE
control program (Ref. 42). We have tentatively concluded that producers
need to develop and implement a biosecurity program covering the
grounds and all facilities, including poultry houses, for each egg farm
in order to prevent the horizontal spread of SE.
    As part of your biosecurity program, you must take measures to
prevent cross-contamination among poultry houses and contamination of
poultry houses from the environment. This includes, where practical,
purchasing separate equipment for each poultry house within a farm
because shared equipment can cause SE cross-contamination between
poultry houses. For certain large pieces of equipment (e.g., manure
removing equipment), we recognize that it is not practical to purchase
separate pieces of equipment for each house. We also recognize that
certain pieces of equipment are common to all houses (e.g., egg belts).
In the Layers study, approximately one-half of the positive
environments were identified by egg belt or elevator sampling (Ref.
27). You must keep egg belts, manure-removing equipment, and other
similar pieces of equipment clean and ensure that these pieces of
equipment are not sources of SE contamination that can be spread from
one house to another.
    A comprehensive biosecurity program must also include provisions to
limit visitors to the farm and poultry houses and to ensure proper
hygiene of personnel who do move among poultry houses. Proper hygiene
includes the use of protective clothing that is changed as employees
move between poultry houses and foot sanitizing stations or other
appropriate means to protect against contamination. In addition, you
must prevent stray poultry, wild birds, or other animals from entering
into poultry houses or on the grounds. You must not allow employees to
keep poultry at home. You must implement the biosecurity measures
stated above to prevent spreading SE from one poultry house to another
on contaminated clothing or spreading SE from the environment into a
poultry house by allowing stray animals entrance into a poultry house
or allowing employees to keep their own poultry, which may be carrying
SE, at home.
3. Rodents, Flies, and Other Pest Control
    We are proposing in Sec.  118.4(c) that you must develop and
implement a pest and rodent control program to control rodents, flies
and other pests. Many of the comments that we received after the egg
safety public meetings in Columbus, OH (March 30, 2000), and
Sacramento, CA (April 6, 2000), stated that the most important SE
prevention measure that can be taken within a poultry house is rodent
and pest control.
    Several investigators have found strong indications that mice are
carriers of invasive SE in the poultry house (Refs. 43 and 44). Kreager
(Ref. 45) has stated that the SE status of rodents in a poultry house
is thought to be indicative of the status of the flock. In fact, data
indicate that the environments of SE-contaminated flocks are usually
infected with the same phage type of SE found in mice and eggs also in
that environment (Ref. 39). According to Davison et al. (Ref. 46), a
single mouse can produce 100 droppings per day, and each dropping can
contain up to 230,000 SE organisms. Wray and Davies (Ref. 47) have
stated that mice may shed Salmonella intermittently for up to 18 weeks
and may infect chickens consuming the fecal matter. Mice may become
infected with SE from contaminated manure and then may spread it to
other poultry houses that were previously SE free (Refs. 46 and 47). A
few mice in one house can proliferate to 10,000 or more during the life
of a flock.
    Henzler and Opitz (Ref. 48) found that a poultry house with a large
rodent population was approximately four times more likely to have an
SE-positive environment as a poultry house with a small rodent
population. In the Layers study (Ref. 26), producers reported that they
had a moderate to severe problem with mice on 30 percent of farms and a
moderate to severe problem with rats on 9 percent of farms. Rats have
also been shown to harbor SE and are important vectors because they can
travel long distances (Ref. 47). Environmental testing for the Layers
study (Ref. 27) indicated that poultry houses in which 20 or more mice
were captured (equals a rodent index of 2 or 3, see discussion of
rodent indexing later in this section) were 9 times more likely to
contain SE than poultry houses with a lower rodent index.
    In addition to rodents, flies have been shown to harbor SE within
the poultry house environment. Several Salmonella species were found in
houseflies and bronze dump flies collected at caged-layer facilities
that produced eggs that were implicated as the food vehicle in two
recent outbreaks of SE infections. SE was isolated from 2 of 15 pools
of houseflies from these facilities (Ref. 49). Both flies and rodents
are attracted to feed within the poultry house and, according to the
Layers study, flies and rodents have access to feed troughs on nearly
all farms.
    These studies indicate that rodents and pests can harbor SE that
can be transmitted to layers and possibly to their eggs, potentially
resulting in SE illnesses from consumption of shell eggs. We
tentatively have concluded that producers must develop and implement a
program to control rodents, flies and other pests.
    We are proposing to require, under Sec.  118.4(c)(1), that you must
monitor rodent populations through visual inspection and use of
mechanical traps or glueboards or another appropriate method. The use
of traps and glueboards is appropriate if placed at regular intervals
throughout each poultry house, or wherever rodents are most likely to
be caught (Ref. 46). Davison et al. (Ref. 46) recommend that 12 traps
be set per poultry house, left for a week, and checked twice during
that week. If no mouse is caught at the first check, the trap should be
moved, but no more than 15 feet. One week of trapping gives
 
[[Page 56836]]
 
a good indication of the level of rodent infestation in a poultry
house; this is called rodent indexing (Ref. 46). If 0 to 10 mice (less
than 2 mice/day) are caught, the rodent index is low or equal to 1; if
11 to 25 mice are caught, the rodent index is moderate or equal to 2;
if 26 or more mice are caught, the rodent index is high or equal to 3.
A low rodent index indicates acceptable rodent control.
    We are proposing to require that when monitoring indicates
unacceptable rodent activity (a rodent index of 2 or higher as
described in Davison et al. (Ref. 46)) within a poultry house, you must
take appropriate action to reduce the rodent population. We are
proposing that baiting and trapping are possible methods to reduce a
rodent population, but may not be effective in all situations.
Producers, aware of rodent situations in their individual poultry
houses, should choose a method that will be effective in their houses.
If rodenticides are used, you should take care to prevent chickens or
other nonrodents from consuming the bait.
    We also are proposing to require under Sec.  118.4(c)(2) that you
monitor for flies and other pests through spot cards, Scudder grills,
sticky traps or some other appropriate method that indicates pest
activity. Spot cards are index cards used to enumerate the number of
flies that land within the card area by counting fly specks (Ref. 50).
Sticky traps are used to count the number of flies stuck to the trap
(Ref. 51). A Scudder grill or a fly grill is a wooden grill that is
placed over natural fly concentrations. The number of flies that land
on the grill in 30 seconds is counted (Ref. 52). Spot cards and sticky
traps should be checked weekly, while Scudder grills give an instant
measure of fly activity within a poultry house.
    Axtell (Ref. 50) has suggested that 50 or fewer hits on a spot card
or sticky trap per week indicates satisfactory fly control. A count of
less than 20 on a Scudder grill likewise indicates satisfactory fly
control (Ref. 52). If monitoring indicates pest infestation (i.e.,
levels that do not indicate satisfactory pest control, as described
above) within a poultry house, producers must use appropriate methods
to reduce the pest population within a poultry house.
    You would be required, under proposed Sec.  118.4(c)(3), to remove
debris within a poultry house and vegetation and debris outside of a
poultry house that may harbor rodents and pests. Maintenance of a
section of crushed rock around the perimeter of a poultry house helps
prevent rodents from burrowing near poultry house foundations. Where
possible, poultry houses should be sealed against entrance by rodents
and pests.
4. Cleaning and Disinfection
    We are proposing in Sec.  118.4(d) that you must develop procedures
for cleaning and disinfection of a poultry house that include removal
of visible manure, dry cleaning, followed by wet cleaning using
disinfectants, and finally, disinfecting. Further, we are proposing to
require that you clean and disinfect a positive poultry house prior to
the addition of new laying hens to the house. It is important, once a
poultry house has had an SE-positive environmental or egg test, that
you make every effort to rid the environment of SE before new laying
hens are placed into that house to prevent the SE problem from being
perpetuated in the replacement flock. Schlosser et al. (Ref. 39)
reported that 50 percent of the SE-positive houses that were cleaned
and disinfected according to PEQAP specifications were SE-negative when
subsequently sampled. PEQAP cleaning and disinfection procedures
consist of dry cleaning, wet cleaning (soaking, washing, rinsing),
disinfection, and possibly fumigation with formaldehyde (Ref. 39). In
addition, the Layers study found that no poultry house tested positive
for SE after wet cleaning (i.e., where cages, walls, and ceilings were
washed) (Ref. 27). We tentatively have concluded that, if an
environmental test or an egg test is positive for SE during the life of
a group in a poultry house, producers must clean and disinfect that
poultry house before new laying hens are added to the house.
    You must develop procedures for cleaning and disinfection in case
they should ever need to be implemented. The cleaning and disinfection
must include removal of all visible manure from the poultry house.
Manure is a reservoir of SE that has been shed by infected laying hens.
You must begin the cleaning procedure with dry cleaning of the house to
remove dust, feathers, and old feed. Then, you must wet clean the
poultry house, including washing with detergents. Detergents must be
used according to label instructions, followed by recommended rinsing
procedures. Following cleaning, you must disinfect the poultry house
with spray, aerosol, fumigation or another appropriate disinfection
method.
    We are aware of studies that indicate that wet cleaning may have a
detrimental effect on the SE status of a poultry house. In the report
by Schlosser et al. (Ref. 39) mentioned in the first paragraph of this
section, it is noted that, while 50 percent of the houses went from SE-
positive to SE-negative after wet cleaning, 28 percent of the houses
went from SE-negative to SE-positive. It is not known whether this was
a testing error or a result of the wet cleaning. In addition, a Danish
study found a relationship between wet cleaning procedures and SE-
positive pig herds (Ref. 53). The authors were unsure whether the
cleaning procedures were actually contributing to the presence of SE in
the pigs or if the study was biased. Because there is some evidence,
though inconclusive, suggesting that wet cleaning may result in an SE-
positive poultry house environment, we specifically request comment and
data on this subject. Although we are requiring cleaning and
disinfection only for houses that have had an environmental or egg test
that was positive for SE, we recommend that you remove manure and dry
clean poultry houses as a general management practice every time you
depopulate a house, even when no SE was detected in the house or eggs.
5. Refrigeration of Shell Eggs Stored More Than 36 Hours
    We are proposing in Sec.  118.4(e) that you must store eggs at or
below 45[deg]F (7.2[deg]C) ambient temperature if you hold them at the
farm for more than 36 hours after laying. This proposed requirement is
the only SE prevention measure that applies to all producers with 3,000
or more laying hens regardless of whether your eggs will receive a
treatment.
    As we described in the shell egg refrigeration and labeling
proposed rule (64 FR 36492 at 36495, July 6, 1999), although fresh
shell eggs provide an inhospitable environment for Salmonella and other
microorganisms to multiply, the chemical and physical barriers against
bacterial movement and growth in shell eggs degrade as a result of the
time and temperature of holding. Consequently, as a result of
degradation, SE, if present, has access to the nutrient rich yolk,
which provides a favorable environment for growth of SE.
    Studies have shown that SE, when inoculated into the albumen of
whole shell eggs, multiplied to high numbers if the eggs were not
properly refrigerated (Refs. 54, 55, and 56). One study investigated
the effect of holding inoculated whole eggs at five different
temperatures in the range of 4 [deg]C (39 [deg]F) to 27 [deg]C (81
[deg]F). The investigators found that the SE growth response was
proportional to the temperature at which the inoculated eggs were held.
The study demonstrated that SE inoculated in shell eggs can multiply to
substantial levels if held at 10 [deg]C (50 [deg]F)
 
[[Page 56837]]
 
or higher for up to 30 days. The authors concluded that ``because the
number of SE present at the time an infected egg is laid is probably
very low, egg storage at 4 [deg]C (39 [deg]F) could be expected to
result in a smaller risk to the public health than higher storage
temperatures'' (Ref. 54). In studies by Humphrey (Ref. 55) and Bradshaw
et al. (Ref. 56), no growth was observed in SE inoculated into whole
shell eggs at 8 [deg]C (46 [deg]F) and 7 [deg]C (45 [deg]F),
respectively. We find that the scientific evidence on the growth of SE
in eggs shows that control of storage temperature of shell eggs can
effectively prevent the multiplication of any SE present. We seek
comment and data on the impact of refrigeration on eggs after they
leave the farm, such as the possibility that the eggs may ``sweat''
when removed from refrigeration.
    Although we believe that it is very important that eggs be placed
into refrigerated storage as soon as possible after they are laid, we
realize that this may not be practical for all producers. It may be
several hours or longer after the eggs are laid before they are
collected or picked up for transport. It may not be practical for
producers to place eggs under refrigeration within several hours after
they are laid. It would be reasonable, based on what we know about
current practices and the risk of SE growth in unrefrigerated eggs, to
establish a time limit for holding eggs under ambient temperature
conditions. According to the Layers study (Ref. 26), almost half of the
farm sites surveyed had egg pick-ups every 1 to 2 days. We believe that
holding eggs under ambient temperature conditions for up to 36 hours
would not result in excessive growth of any SE, if present (Ref. 54).
If eggs will be held at the farm for more than 36 hours after they are
 
laid, it is important to place them in an environment that will protect
the yolk membrane from degradation and, thereby, prevent any SE that
may be present from multiplying. We have tentatively concluded that if
eggs will be stored for more than 36 hours after they are laid,
producers, with 3,000 or more laying hens, must store them at an
ambient temperature of 45 [deg]F (7.2 [deg]C) or lower.
    We are soliciting comment and data on the 36-hour threshold that
eggs may be held unrefrigerated at a farm. Is this time frame practical
for producers with daily egg pickup? Is it practical to refrigerate
eggs held at farms for less than 36 hours?
 
F. Indication of the Effectiveness of the SE Prevention Measures:
Testing
 
    In addition to implementing SE prevention measures in the poultry
house environment, we have tentatively concluded it is also important
that you do environmental testing as an indicator of whether your
measures are working effectively.
1. Environmental Testing for SE
    Under proposed Sec.  118.1(a), Sec.  118.5 would apply to you if
you are a shell egg producer with 3,000 or more laying hens, you
produce shell eggs for the table market but do not sell all of your
eggs directly to consumers, and any of your eggs that are produced at a
particular farm do not receive a treatment as defined in Sec.  118.3.
We are proposing in Sec.  118.5 that you must conduct environmental
testing for SE as an indicator of whether your SE prevention measures
are working effectively. According to Schlosser et al. (Ref. 39), the
Northeast Conference on Avian Diseases recommended that the poultry
house environment (e.g., manure pits and egg machinery) be sampled by
swabbing. This recommendation was made with the assumption that, if SE
was found in the environment, there was a high probability that the
laying hens in the house were infected. Sampling of manure in a poultry
house is a simple screening method for determining if laying hens are
shedding SE. Some studies have shown that manure sampling gives more
consistent results than sampling of egg machinery (Ref. 39), although
we recognize that sampling egg machinery may be preferable in certain
poultry houses, and the Layers study identified almost one-half of
environmental positives through sampling of egg machinery (Ref. 27). We
tentatively have determined that environmental testing of the manure or
egg machinery in a poultry house is an appropriate method for screening
the environment for SE and should be used as one indicator of the
effectiveness of your SE prevention measures.
    Testing provides an opportunity for you to evaluate the SE status
of your poultry houses and to take appropriate action if your measures
are not preventing SE. Many of the comments we received in response to
the public meetings in Columbus, OH, and Sacramento, CA, stated that
environmental testing was an appropriate indicator of whether SE
prevention measures are working effectively. In addition, most of the
voluntary egg QA programs contain some level of environmental testing
for SE to evaluate the effectiveness of the programs.
    Information from an egg QA program with a testing protocol
indicates that the highest numbers of positive environmental samples
are found when laying hens are 40 to 45 weeks of age (Ref. 57). The
Layers study (Ref. 27) found that flocks less than 60 weeks of age
(younger flocks) were 5 times more likely to test positive for SE than
older flocks. Accordingly, we are proposing in Sec.  118.5(a) that
environmental testing for SE be conducted for the flock in each poultry
house when each group of laying hens making up that flock is 40 to 45
weeks of age. We are proposing in Sec.  118.5(b) that environmental
testing for SE also be conducted approximately 20 weeks after the end
of any induced molting process. We propose to do this because the egg
industry considers the time period approximately 20 weeks after the end
of a molting process to be equivalent to the time period when layers
are 40 to 45 weeks of age in an initial laying cycle.
    An SE-positive environmental test at the 40 to 45 week time period
notifies a producer that there is a problem with SE contamination. At
this point, action can be taken to determine if there are SE-
contaminated eggs and to keep SE-contaminated eggs produced by an SE-
positive flock out of the table egg market. Additionally, a positive
environmental test during the 40 to 45 week period (just after peak
lay) gives a producer sufficient notice to make arrangements for
cleaning and disinfection of the contaminated poultry house at
depopulation. Therefore, we have tentatively concluded that you must
perform environmental testing for SE on a poultry house when each group
of laying hens in the flock in that house are 40 to 45 weeks of age
and, if molted, approximately 20 weeks after the end of any molting
process.
    We tentatively have concluded in proposed Sec.  118.5(a)(1) that,
if an environmental test at 40 to 45 weeks for SE is negative, and your
laying hens do not undergo induced molting, then you do not need to
perform additional environmental testing on the poultry house, unless
the flock in that poultry house contains multi-aged laying hens. If the
flock contains multi-aged laying hens, you must test the environment of
the poultry house when each group of hens in the flock is 40 to 45
weeks of age. We are establishing minimum testing requirements to serve
as one indication of whether your SE prevention measures are working
effectively, and we believe that one test per laying cycle is
sufficient for that purpose. In addition, a representative
 
[[Page 56838]]
 
from the PEQAP program stated at a recent FDA/FSIS public meeting on
egg safety (Washington, DC, July 31, 2000) that 75 percent of
environmental positives will be caught with one environmental test
(Ref. 58).
    If an environmental test for SE is positive, we have tentatively
concluded, under proposed Sec.  118.5(a)(2), that you must review
implementation of your SE prevention measures and begin egg testing
within 24 hours of receiving notification of the positive environmental
test, unless you divert eggs to treatment for the life of the flock in
that poultry house. Review of the SE prevention measures is critical to
ensure that they are being implemented properly and to eliminate
improper implementation as a contributor to the SE-positive
environment. We are proposing that you begin egg testing within 24
hours of receiving notification of an SE-positive environmental test in
order to determine as quickly as possible whether SE-contaminated eggs
are being marketed to consumers.
    Further, we tentatively have concluded, in proposed Sec.  118.5(b),
that you must perform an environmental test for SE at approximately 20
weeks after the end of the molting process. Under proposed Sec.
118.5(b)(1), if an environmental test is negative approximately 20
weeks after the end of a molting process, and your laying hens are not
molted again, you do not need to perform additional environmental
testing, for the reasons previously stated, on that poultry house,
unless the flock in the poultry house contains multi-aged laying hens.
If the flock contains multi-aged laying hens, the environment of the
poultry house must be tested approximately 20 weeks after the end of
the molting process of each group of hens in the flock in each poultry
house.
    Under proposed Sec.  118.5(b)(2), if the environmental test for SE
is positive at approximately 20 weeks after the end of a molting
process, you must proceed in the same manner as described when the
environmental test performed when laying hens are 40 to 45 weeks of age
is positive for SE.
2. Egg Testing for SE
    Under proposed Sec.  118.1(a), Sec.  118.6 would apply to you if
you are a shell egg producer with 3,000 or more laying hens, you
produce shell eggs for the table market but do not sell all of your
eggs directly to consumers, and any of your eggs that are produced at a
particular farm do not receive a treatment as defined in Sec.  118.3.
We are proposing in Sec.  118.6 that if you have an environmental test
that is positive for SE at any point during the life of a flock, you
must perform egg testing for SE, unless you divert eggs to treatment as
defined in Sec.  118.3 for the life of the flock in the positive
poultry house. If an environmental test is SE-positive, the flock in
that environment may be producing SE-positive eggs. Studies have shown
that infected laying hens that are shedding SE into the environment are
not necessarily producing SE-contaminated eggs (Ref. 14). However, data
from the SE Pilot Project (Ref. 39) showed that 50 percent of flocks
with an SE-positive environment produced at least one positive egg in
the time period studied. The prevalence of SE-positive eggs from flocks
in SE-positive environments was estimated to be approximately 1 in
3,600 from data from the SE Pilot Project (Ref. 39). The SE Risk
Assessment (Ref. 15) estimated the prevalence of contaminated eggs to
be as high as 1 in 1,400 from ``high risk'' flocks with SE-positive
environments. We have tentatively concluded that, in order to protect
public health, you must begin testing eggs within 24 hours of receiving
notification that you have an environmental test that is positive for
SE, unless you choose to divert eggs to treatment as defined in Sec.
118.3 for the life of the flock in the positive poultry house.
    We are proposing in Sec.  118.6(c) that you must conduct 4 egg
tests on the positive poultry house; you must collect and test eggs as
required by Sec. Sec.  118.7 and 118.8, respectively, at 2-week
intervals for a total of 4 tests. We are also proposing in Sec.
118.6(c) that if all four tests are negative for SE, then you may
continue to supply eggs to the table egg market. However, if any one of
the four egg tests is positive for SE, we are proposing in Sec.
118.6(d) that, upon receiving notification of an SE-positive egg test,
you must divert all eggs from the positive flock for treatment as
defined in Sec.  118.3 until the provisions of Sec.  118.6(c) are met.
You may divert eggs from the positive flock to egg products processing
or to a treatment that will achieve at least a 5-log destruction of SE
for shell eggs. You may return to providing eggs to the table egg
market if they have met the provisions of proposed Sec.  118.6(c) (see
discussion in section III.G.2 of this document) and continue to meet
the provisions of proposed Sec.  118.6(e), described in the following
paragraph.
    We are proposing in Sec.  118.6(e) that, if you have had a positive
egg test in a flock and later meet the number of negative egg tests
required in Sec.  118.6(c) and return to table egg production, you must
conduct one egg test per month on that flock (see discussion in section
III.G.2 of this document) for the life of that previously positive
flock. Humphrey (Ref. 14) has suggested that laying hens that are
infected with SE will produce SE-contaminated eggs sporadically.
Therefore, we believe that it is important that a flock that previously
has produced positive eggs be monitored throughout its life for
production of SE-contaminated eggs. Under proposed Sec.  118.6(e)(1),
if the monthly egg test in paragraph (e) is negative for SE, you may
continue to supply eggs to the table market. If any of the monthly egg
tests in paragraph (e) are positive for SE, under proposed Sec.
118.6(e)(2), you must divert eggs from the positive flock to treatment
for the life of the flock or until the conditions in paragraph (c) of
proposed Sec.  118.6 are met.
    The testing schemes described in the previous paragraphs could be
the basis for a performance based regulatory scheme. We are soliciting
comment and data on alternative regulatory schemes that would achieve
the same public health protection as the set of measures we are
currently proposing. One possibility is a requirement for a specified
frequency of environmental testing for all producers, followed, if
necessary, by egg testing and diversion. As long as producers were
maintaining poultry houses that tested negative for SE, the SE
prevention measures would be recommended but not required. However,
some or all of the measures may be required of producers whose houses
were contaminated with SE. We solicit comment on a testing-based
regulatory scheme and combinations of the prevention measures that
might achieve the same public health goals as the current proposal.
 
G. Sampling and Testing Methodology for SE
 
    We are proposing in Sec.  118.7 to require that you follow a
scientifically valid sampling procedure when sampling for SE in the
poultry house environment and in eggs. Your ability to accurately
assess the SE status of a flock and its eggs is a factor of the
sampling methodology used to detect SE in the environment and in eggs.
To protect public health, it is important that when you perform
environmental testing for SE, you take representative samples of the
manure or other appropriate material in poultry houses and, when you
perform egg testing, you randomly collect 1,000 eggs from a day's
production.
 
[[Page 56839]]
 
1. Sampling of the Poultry House Environment
    We are proposing in Sec.  118.7(a) that you use a scientifically
valid sampling procedure for conducting environmental sampling within
each poultry house. Currently, drag swabbing methods are being used to
sample manure in poultry houses in the voluntary State QA programs
(Refs. 28, 29, 30, 31, and 32). Drag swabbing has been reported to be
an effective and convenient method for determining the SE status of a
flock in a poultry house (Ref. 59). Drag swabbing involves pulling a
square gauze pad (approximately 4 x 4 inches) that has been moistened
with canned, evaporated milk across the surface of manure. Information
on drag swabbing generated for the CA Egg QA Program (CEQAP) indicates
that a swab becomes saturated with manure after being dragged
approximately 30 linear feet (Ref. 60) and, therefore, in that program
an individual swab is only dragged for 30 feet. Most other State
programs drag a single swab the entire length of a row of cages within
a poultry house regardless of the length of that row (Refs. 28, 30, 31,
and 32). As only the one CEQAP study has been done on saturation of a
drag swab, there is very little information on this subject.
    Currently, two different sampling plans are being used to drag swab
manure in poultry houses among the voluntary State egg QA programs.
CEQAP has developed a statistical sampling plan for drag swabbing a
poultry house based on an assumed level of contamination within that
house. Based on this assumed level of contamination, the number of
swabs necessary to give a particular probability of detecting SE can be
determined. For example, if 10 percent of the area of a poultry house
is contaminated with SE, taking 32 swabs would give a 96 percent
probability of detecting SE in that house. For the CEQAP program, the
total area of a poultry house is divided into 30-foot sections (the
distance that they have determined it is valid to drag a single swab)
and, in our example, 32 of those 30-foot sections would be randomly
selected to be drag swabbed for SE. In this sampling plan, the assumed
area of contamination can be altered to fit the conditions in a
particular poultry house with consequent changes in the number of swabs
that must be taken to retain a 95 percent or better probability of
detecting any SE that may be present.
    Alternatively, many of the other voluntary egg QA programs drag
swab the entire length of every row of cages within a poultry house.
Rows or banks of cages typically have a right and left side. Each side
of a row is dragged with a fresh swab until all the rows have been
sampled. One swab is used per side regardless of the length of that
row. The number of drag swabs taken per house equals twice the number
of rows in that house. In addition, there are houses with cages that
are stair-stepped and can be eight cages high with a large manure pit
beneath them. In houses such as these, the manure belts are usually
sampled. In houses where the floors are constantly flushed with water,
the floor in general is swabbed.
    We are aware of the differences in the types of poultry houses
within the United States and the challenges involved in sampling all
houses representatively and consistently. We are specifically
soliciting comment on the appropriateness of different methods of drag
swabbing, including manure belt and floor swabbing, and egg machinery
swabbing. We would like comments on the distance an individual swab
should be dragged and whether or not it is necessary to drag every row
of every house. We would also like comments on alternative methods of
sampling (e.g., sampling of the air in a poultry house to detect SE)
that could be utilized more uniformly in different styles of poultry
houses. Based on comments received, we will consider what poultry house
environmental sampling methods should be required in any final rule.
2. Egg Sampling
    In Sec.  118.5(a)(2)(B) and (b)(2)(B), we are proposing to require
that you begin egg testing within 24 hours of receiving notification of
a single SE-positive environmental test unless you divert eggs to
treatment for the life of the flock in the poultry house. In Sec.
118.7(b)(1), we are proposing that, when you conduct an egg test
required under Sec.  118.6, you randomly collect and test 1,000 eggs
from a day's production. The 1,000-egg sample must be tested according
to proposed Sec.  118.8. You must randomly collect and test 4 1,000-egg
samples at 2-week intervals for a total test of 4,000 eggs over an 8-
week period. With this sampling scheme, there is approximately a 95
percent probability that a positive egg will be detected from a flock
that is producing SE-contaminated eggs with a prevalence of 1 in 1,400
(Ref. 61). As mentioned previously, data have indicated that an SE-
contaminated flock may be producing SE-contaminated eggs with a
prevalence of 1 in 1,400 (Ref. 15). We are proposing that eggs be
tested in 2-week intervals because infected flocks shed SE
intermittently (Ref. 14). However, the false negative rate of the
sampling scheme is sensitive to the assumption regarding the prevalence
of SE-contaminated eggs (Ref. 61). We are soliciting comment on this
assumption, as well as other scientifically valid egg sampling
procedures.
    In proposed Sec.  118.7(b)(2) we have tentatively concluded that
1,000 eggs from a day's production should be tested per month for the
life of a flock that has had an SE-positive egg test and then met the
provisions of Sec.  118.6(c) and returned to table egg production. We
are requiring this monthly egg test for the life of the flock because
infected layers shed SE intermittently (Ref. 14).
 
H. Laboratory Methods for Testing for SE
 
    We are proposing in Sec.  118.8(a) that you must test for SE in
environmental samples according to the method ``Detection of Salmonella
in Environmental Samples from Poultry Houses'' and in Sec.  118.8(b)
that you must test for SE in egg samples according to the preenrichment
method described by Valentin et al. (Ref. 62). These methods, which are
incorporated by reference, are required unless you test for SE in
environmental and egg samples using other methods that are at least
equivalent in accuracy, precision, and sensitivity in detecting SE. In
the future, we intend to place the specified methods in FDA's
Bacteriological Analytical Manual. After publication of this proposed
rule, the environmental sampling method will be available on FDA's
Internet Web site at http://www.cfsan.fda.gov.
 
    The method for detecting SE in the environment that we are
specifically proposing to allow, ``Detection of Salmonella in
Environmental Samples from Poultry Houses,'' is a pre-enrichment method
followed by primary enrichment method. The basic procedure for
culturing samples involves incubating pre-enriched samples in
enrichment broth and then streaking samples of broth onto selective
media. Following incubation of the samples on the selective media, any
suspect colonies that have grown on the media are identified
biologically and serologically. In general, this procedure should give
results in 5 days following receipt of samples by the laboratory.
    The method for detecting SE in egg samples that we are specifically
proposing to allow is a pre-enrichment method. The basic procedure for
culturing involves incubation of pools of 20 eggs, followed by
enrichment in modified tryptic soy broth. Following incubation and
enrichment, samples are subcultured and streaked onto media and any
suspect colonies that have
 
[[Page 56840]]
 
grown on the media are identified biochemically and serologically. We
specifically request comment on appropriate options for conducting and
funding testing of SE detection methods through State and Federal
programs.
 
I. Administration of the SE Prevention Measures
 
    We are proposing in Sec.  118.9 that one individual at each farm
must be responsible for administration of the SE prevention measures.
Oversight by one qualified individual is essential to the effective
implementation of SE prevention measures for egg production. Because
egg production operations tend to be small and may have frequent
turnover in staff, it is particularly important that one individual
have training equivalent to a standardized curriculum recognized by FDA
(discussed in the following paragraphs) or be otherwise qualified
through job experience to administer the SE prevention measures.
    Proposed Sec.  118.9 requires an individual to have the requisite
training or experience to administer SE prevention measures. Training
on SE prevention measures for egg production must be at least
equivalent to that received under a standardized curriculum recognized
by FDA. We anticipate that 2- or 3-day training sessions will be
provided by an egg safety training alliance, modeled after the Seafood
HACCP Alliance. The Seafood HACCP Alliance is a consortium consisting
of representatives from Federal and State agencies, industry, and
academia who have worked to create a uniform training program that will
meet the requirements of the seafood HACCP regulations with minimal
cost. It is our intention to develop an Egg Safety Alliance to create a
core curriculum and training materials on SE prevention measures for
egg production. It also is our intention to use the Egg Safety Alliance
curriculum and materials as the standard against which other course
curricula and materials may be judged.
    We also are proposing in Sec.  118.9 that job experience will
qualify an individual to administer the SE prevention measures if such
experience has provided knowledge at least equivalent to that provided
through the standardized curriculum. We acknowledge that a course on SE
prevention measures for egg production might not be necessary for an
individual who has experience working on an egg farm and is well-versed
in SE prevention during egg production. Where job experience has
imparted a level of knowledge at least equivalent to what an individual
would receive through the standardized curriculum, that individual
would be considered qualified to administer the prevention measures
under proposed Sec.  118.9.
    We are proposing in Sec. Sec.  118.9(a) through (c) that the
qualified individual designated under Sec.  118.9 must develop and
implement SE prevention measures for each farm, reassess and modify the
prevention measures as necessary to ensure that the requirements of
Sec.  118.4 are met, and review all records created under Sec.  118.10.
We also are proposing that the individual does not need to have
performed the monitoring or created the records being reviewed. We have
tentatively concluded that the prevention measures need to be
implemented and, if necessary, modified and reassessed by an individual
who not only is knowledgeable about egg production but who also has
been trained or is experienced specifically in SE prevention measures
for egg production so that the individual will be able to recognize
potential problems.
 
J. Recordkeeping Requirements for the SE Prevention Measures
 
    We are proposing recordkeeping requirements related to
environmental testing and egg testing for SE, diversion, and eggs going
to treatment.
1. Records that Egg Producers Are Required to Maintain
    Under proposed Sec.  118.1(a), Sec.  118.10 would apply to you if
you are a shell egg producer with 3000 or more laying hens, you produce
shell eggs for the table market but do not sell all of your eggs
directly to consumers, and any of your eggs that are produced at a
particular farm do not receive a treatment as defined in Sec.  118.3.
We are proposing in Sec.  118.10(a)(1) that you must keep records
indicating compliance with environmental and egg sampling performed
under proposed Sec.  118.7 and results of environmental and egg testing
performed under proposed Sec.  118.8 as required in proposed Sec. Sec.
118.5 and 118.6. If applicable, you must also keep records indicating
compliance with the egg diversion requirements of proposed Sec.  118.6.
These records may be handwritten logs, invoices, documents reporting
laboratory results, or other appropriate records.
    Maintenance of appropriate records is fundamental to evaluating the
effectiveness of your SE prevention measures. As stated in section
III.A of this document, the combined SE prevention measures, when
implemented properly, have been shown to result in a decrease in the
number of poultry houses with SE-positive environments (Ref. 39). We
have tentatively concluded that in order for you and FDA to evaluate
whether these measures are being effective, it is necessary for you to
keep records documenting the results of environmental testing and, if
applicable, egg testing. We are proposing in Sec.  118.10(a)(2) that if
egg testing reveals SE-positive eggs you must maintain records
indicating compliance with the diversion requirements in Sec.  118.6.
Records of diversion will provide assurance to both you and FDA that
eggs required to be diverted are not being marketed to consumers and,
thereby, putting consumers at risk of illness from SE.
    We are proposing in Sec.  118.10(a)(3) that you must keep records
indicating that all of the eggs at a particular farm will be given a
treatment as defined in Sec.  118.3, if you have 3,000 or more laying
hens and you are not complying with the SE prevention measures other
than refrigeration (i.e., you are a producer described in Sec.
118.1(b)). These records may include a contract with an in-shell
pasteurization facility or an egg-breaking facility. It is necessary
that these records be maintained so that both you and FDA will have an
assurance that the potential for SE contamination in eggs is being
addressed through a treatment or through the SE prevention measures.
2. General Requirements for Records Maintained by Egg Producers
    In proposed Sec.  118.10(b), we describe general requirements for
records that must be maintained. Proposed Sec.  118.10(b)(1) and (b)(2)
require that records contain your name, the location of your farm, and
the date and time of the activity that the record reflects. Proposed
Sec.  118.10(b)(3) requires that the record include the signature or
initials of the person performing the operation or creating the record.
The record signing requirement will assure responsibility and
accountability by the individual who performed the activity. Also, a
signature or initials ensure that the source of the record will be
known if any questions regarding the record arise.
    Proposed Sec.  118.10(b)(4) requires that data reflecting
compliance activities be entered on a record by the person performing
or observing the activity at the time it is performed or observed in
order to increase accuracy. The record must contain the actual values
observed, if applicable.
 
[[Page 56841]]
 
3. Length of Time Records Must Be Retained
    Proposed Sec.  118.10(c) requires you to maintain all records in
accordance with proposed part 118 at your place of business, unless
stored offsite under Sec.  118.10(d), for 1 year after the flock to
which the records pertain has been taken permanently out of production.
You must maintain records for 1 year after a flock is no longer
producing eggs for consumption to allow for annual inspection and to
facilitate investigation if the eggs from that flock are implicated in
an outbreak of a foodborne illness.
4. Offsite Storage of Records
    Proposed Sec.  118.10(d) allows for offsite storage of records 6
months after the date the records were created. This applies to all
records required under proposed part 118. We recognize that, under the
recordkeeping requirements of this part, there may be more records than
available storage space in an egg production facility. Therefore, we
are proposing that records may be stored offsite. You must be able to
retrieve any records you store offsite and provide them at your place
of business within 24 hours of a request for official review. We would
consider electronic records to be onsite if they are available from an
onsite computer, including records transmitted to that computer via a
network connection.
5. Official Review of Records
    Proposed Sec.  118.10(e) requires you to have all records required
by part 118 available for official review and copying at reasonable
times. The agency's access to records required by proposed part 118 is
essential to understand whether your SE prevention measures are working
and whether you are complying with the regulations. Our authority to
require these records, and to provide for agency access to them, is
discussed elsewhere in this document.
6. Public Disclosure of Records
    Proposed Sec.  118.10(f) states that records required by proposed
part 118 are subject to the disclosure requirements under 21 CFR part
20. In another FDA rulemaking that discussed public disclosure of
required records (60 FR 65096 at 65139, December 15, 1995), we
concluded:
    [R]ecords and plans should be protected to the extent possible
in order to promote the implementation of HACCP across the seafood
industry. FDA has concluded that the public will benefit from the
protection of records because it will actually strengthen the HACCP
system. So long as the legitimate public need to be able to evaluate
the system can be met through other means, the confidentiality of
HACCP records and plans generally will foster the industry's
acceptance of HACCP. Even though HACCP may be mandatory under these
regulations, in order for it to succeed, processors must be
committed to it because they see value in it for themselves. Fear of
public disclosure of matters that have long been regarded as
confidential business matters could significantly undermine that
commitment. FDA concludes, therefore, that it is in the public
interest to foster tailored HACCP plans that demonstrate
understanding and thought, rather than promote the use of rote plans
and minimally acceptable standards due to fear of public disclosure.
    FDA understands that we cannot make promises of confidentiality
that exceed the permissible boundaries established under FOIA, nor
does the agency wish to do so in this case. The agency still does
not expect that we will be in possession of a large volume of plans
and records at any given moment. However, given the significant
interest in this subject as conveyed by the comments, we have
concluded that the final regulations should reflect the fact that
the HACCP plans and records that do come into FDA's possession will
generally meet the definition of either trade secret or commercial
confidential materials* * *.
    We are not aware of any circumstances that would warrant different
consideration on issues related to disclosure of records for SE
environmental and egg sampling and testing and for diversion of eggs
than those required for seafood HACCP. Therefore, we intend to consider
records that come into our possession under this rule as generally
meeting the definition of either a trade secret or commercial
confidential materials.
7. Comment Solicitation on Recordkeeping Measures
    We are soliciting comment on whether we should require two
additional recordkeeping measures beyond the proposed recordkeeping
requirements for environmental and egg sampling and testing, and for
diversion. This solicitation is being made to assess the importance of
these additional recordkeeping measures for a comprehensive SE
prevention plan, given their added costs. First, we are soliciting
comment on whether we should require that you establish and maintain a
written SE prevention plan. If required, this SE prevention plan would
set forth a producer's plan to implement the regulation's prevention
and testing measures, and the requirement for diversion if eggs test
positive for SE. A written plan may aid in the planning and
establishing of efficient, effective, and consistently implemented SE
prevention measures by facility personnel.
    A written SE prevention plan also would be helpful to FDA
representatives who inspect an egg facility. A written copy of a plan
specific to each farm would assist FDA in establishing a link between
what agency representatives see during an inspection and the overall SE
prevention measures used on that farm over a longer time period. SE
prevention measures may be quite different among farms, given different
facility design and size, and yet be equally effective in meeting FDA's
requirements. Knowledge of the specific prevention measures taken on a
farm, as discussed in an SE prevention plan, would assist FDA
representatives in assessing compliance with the prevention measures.
    The second recordkeeping measure about which we are soliciting
comment relates to a requirement that you maintain records indicating
performance and compliance in implementing your facility's specific SE
prevention measures. In this document, we are specifically proposing to
require records only for environmental and egg sampling and testing,
and for diversion of eggs found to be SE positive. We are requesting
comment on whether we should require other documents demonstrating your
implementation of the SE prevention measures that could be considered
by FDA in assessing your compliance efforts, particularly in light of
an SE-positive environmental test. Such documents, for example, might
include monitoring records and activity logs. In the absence of other
records to demonstrate compliance with SE prevention measures, FDA
representatives who inspect a facility will base their evaluation of
compliance with the regulation on observations, your sampling, testing,
and any diversion records, FDA testing, and any other relevant
information.
    FDA did not propose to require a written plan and monitoring and
compliance records because of their added costs, which FDA estimates to
be $14.7 million, an 18 percent increase in the rule's total costs.
Considering the information in the previous paragraphs, we are
soliciting comment on the cost-effectiveness of the inclusion of a
recordkeeping provision for a written SE prevention plan and a
provision requiring records demonstrating compliance with all SE
prevention measures in any final rule based on this proposal.
    We also are soliciting comment about whether we should consider
requiring, in a final rule, that you register with FDA if you are a
producer who must comply with all of the SE prevention measures, as
described in proposed Sec.  118.1(a). We would use the producer
registration information to create a
 
[[Page 56842]]
 
database that we would use to efficiently conduct inspections and
allocate inspection resources. When the provisions of this rule are
finalized, FDA intends to conduct annual inspections of egg farms.
Oversight through annual inspection is necessary to ensure that shell
eggs are being produced under controls that will prevent SE
contamination and reduce the likelihood that SE-contaminated eggs will
cause foodborne illness. Therefore, we solicit comment on the efficacy
of requiring that producers register the location and size of their
business with FDA.
 
K. Enforcement of On-Farm SE Prevention Measures for Shell Eggs
 
    As discussed in section III.L of this document, FDA is proposing
these regulations under both the FFDCA and the PHS Act. Failure to
comply with the on-farm requirements proposed in Sec. Sec.  118.1
through 118.10 would subject a producer to the administrative remedies
(i.e., diversion or destruction) in Sec.  118.12 of the proposed rule.
Further, we would consider a failure to comply with the SE prevention
requirements in proposed Sec. Sec.  118.1 through 118.9 to result in
the shell eggs being adulterated under section 402(a)(4) of the FFDCA
(21 U.S.C. 342(a)(4)). Causing the eggs to become adulterated would be
a violation of section 301(b) of the FFDCA (21 U.S.C. 331(b)), which
prohibits adulteration or causing adulteration of food in commerce.
Also, the introduction or delivery for introduction of adulterated
shell eggs into interstate commerce would be a prohibited act under
section 301(a) of the FFDCA (21 U.S.C 331(a)). Enforcement of
adulteration regulations under the FFDCA is conducted under sections
301, 302, 303, and 304 (21 U.S.C. 332, 333, and 334).
    Section 361 of the PHS Act (42 U.S.C. 264) authorizes the Secretary
of Health and Human Services (the Secretary), and by delegation FDA, to
issue regulations that provide for the destruction of articles and for
other measures that the Secretary determines are necessary to prevent
the introduction, transmission, or spread of communicable diseases. FDA
tentatively concludes that the SE on-farm prevention requirements can
be efficiently and effectively enforced through administrative
procedures under the PHS Act. Accordingly, FDA is proposing procedures
in Sec.  118.12 under which FDA or a State or locality may order the
diversion or destruction of shell eggs that have been produced or held
in violation of any of the regulations in Sec. Sec.  118.1 through
118.10. Under proposed Sec.  118.12, FDA or a State or locality may
issue a written order to the person holding the shell eggs requiring
that the eggs be diverted or destroyed.
    The proposed regulations would provide for the diversion to a
treatment that achieves at least a 5-log destruction of SE for shell
eggs or for processing of the egg products in accordance with the EPIA.
Because EPIA requires pasteurization of egg products, any Salmonella
present would likely be eliminated, as it would if the eggs received a
treatment that achieves at least a 5-log destruction of SE. The written
order would identify the shell eggs that are affected, and the grounds
for issuing the order. The written order would provide that, unless the
order is appealed by either filing a written appeal or by requesting a
hearing, the shell eggs must be diverted or destroyed within 10-working
days of the receipt of the order.
    The authority for the enforcement of section 361 of the PHS Act is
provided, in part, by section 368 of the PHS Act (42 U.S.C. 271). Under
section 368(a), any person who violates a regulation prescribed under
section 361 of the PHS Act may be punished by imprisonment for up to 1
year and may be fined. Individuals violating a regulation issued under
section 361 may be fined an amount up to $100,000 if death has not
resulted from the violation or up to $250,000 if death has resulted (18
U.S.C. 3559 and 3571(c)). In addition, Federal district courts have
authority to enjoin individuals and organizations from violating
regulations implemented under section 361 of the PHS Act (Califano v.
Yamasaki, 442 U.S. 682, 704-05 (1979); United States v. Beatrice Foods
Co., 493 F.2d 1259, 1271-72 (8th Cir. 1974), cert. denied, 420 U.S. 961
(1975)).
    We are proposing to amend Sec.  16.5 (21 CFR 16.5) by adding
paragraph (a)(5) to clarify that the regulatory hearing procedures in
21 CFR part 16 do not apply to a hearing proposed under Sec.  118.12 on
an order for diversion or destruction of shell eggs under section 361
of the PHS Act. We intend for the administrative remedies in proposed
Sec.  118.12 to be the applicable informal hearing process for any
order issued under such section.
    Proposed Sec.  118.12(b) requires that shell egg producers allow
FDA representatives to inspect egg production establishments. FDA does
not need to provide advance notice before an inspection, and an
inspection may include, but is not limited to, egg and environmental
sampling, review of records, and inspection of eggs and equipment.
    Proposed Sec.  118.12(c) provides that States and localities that
are authorized to inspect or regulate egg production establishments may
enforce proposed Sec. Sec.  118.4 through 118.10 of the rule through
inspections under Sec.  118.12(b) and through the administrative
remedies in Sec.  118.12(a). Proposed Sec.  118.12(c) also provides
that those States or localities may follow the rule's hearing
procedures, substituting, where necessary, the appropriate State or
local officials for designated FDA officials. The State or local
officials also may use comparable State or local hearing procedures as
long as such procedures satisfy due process.
 
L. Legal Authority
 
    FDA is proposing these regulations under the PHS Act and the FFDCA.
FDA's legal authority under the PHS Act for the proposed regulations is
derived from the provisions of sections 311, 361, and 368 (42 U.S.C.
243, 264, and 271) that relate to communicable disease. The PHS Act
authorizes the Secretary to make and enforce such regulations as ``are
necessary to prevent the introduction, transmission, or spread of
communicable diseases from foreign countries into the States * * * or
from one State * * * into any other State'' (section 361(a) of the PHS
Act). (See sec. 1, Reorg. Plan No. 3 of 1966 at 42 U.S.C. 202 for
transfer of authority from the Surgeon General to the Secretary; see 21
CFR 5.10(a)(4) for delegation from the Secretary to FDA.) This proposed
rule would not be the first regulation issued by FDA that relied upon
the authority of the PHS Act to prevent the transmission of
communicable disease. For more than 60 years, FDA has used the PHS Act
as its legal authority (in whole or in part) to issue the following
regulations:
    <bullet> Regulations to control the interstate shipment of
Psittacine birds (21 CFR 1240.65);
    <bullet> Regulations on the source and use of potable water (21 CFR
1240.80 to 1240.95);
    <bullet> Regulations to control the interstate and intrastate
commerce of turtles (21 CFR 1240.62);
    <bullet> Regulations to control the interstate shipment of
molluscan shellfish (21 CFR 1240.60);
    <bullet> Regulations to require pasteurization of milk and milk
products (21 CFR 1240.61);
    <bullet> Regulations to require a safe handling statement on
cartons of shell eggs that have not been treated to destroy Salmonella
microorganisms and to require refrigeration of shell eggs held
 
[[Page 56843]]
 
for retail distribution (parts 16, 101, and 115 (21 CFR parts 16, 101,
and 115));
    <bullet> Regulations governing blood and tissue products in
intrastate and interstate commerce (parts 606, 640, 1270, and 1271 (21
CFR parts 606, 640, 1270, and 1271));
    <bullet> Regulations to require HACCP systems for juice in
interstate and intrastate commerce (part 120 (21 CFR part 120); and
    <bullet> Regulations to prevent the monkeypox virus from being
established and spreading in the United States (21 CFR 1240.63).
    Furthermore, at least one court has supported FDA's use of its PHS
Act authority to issue regulations to control communicable disease.
State of Louisiana v. Mathews, 427 F. Supp. 174 (E.D.La. 1977),
involved an FDA regulation issued under the PHS Act banning the sale
and distribution of small turtles. Plaintiffs argued that the PHS Act
only provided FDA with authority to ban individual lots of infected
turtles that were shown to be health hazards and did not provide
authority for FDA's broad ban on all small turtles. Id. at 175. The
court rejected this argument, observing that ``Congress has granted
broad, flexible powers to federal health authorities who must use their
judgment in attempting to protect the public health against the spread
of communicable disease.'' Id. at 176. The court found that FDA's total
ban was ``permissible as necessary to prevent the spread of
communicable disease.'' Id.
    Plaintiffs in the case also challenged FDA's authority under the
PHS Act to promulgate a rule applicable to intrastate commerce. Id. FDA
had concluded that controlling the spread of disease from contaminated
turtles required extending the ban to intrastate sales. Id.
Specifically, FDA reasoned that contaminated turtles may be purchased
in one State for use as a pet in another and that, without prohibiting
intrastate sales, unlawful interstate sales would be difficult or
impossible to stop. Id. The court found that the intrastate ban ``is
not only authorized by law, but under modern conditions of
transportation and commerce is clearly reasonable to prevent the
interstate spread of disease.'' Id.
    In Public Citizen v. Heckler, 602 F. Supp. 611 (D.D.C. 1985), the
court considered a request to compel the Department to act on a
petition to ban all domestic sales of raw milk and raw milk products
because of the risk of transmission of disease from such products. In
 
ordering FDA to respond to the petition, the court found that the
Department had authority to ban raw milk and milk products under the
PHS Act: ``Under both the [PHS] Act's authorization for regulations to
control communicable diseases, and the [act's] provisions for the
control of adulterated foods, the Secretary has both the authority and
the heavy responsibility to act to protect the nation's health in
situations such as this one.'' Id. at 613. (internal citations
omitted). See Public Citizen v. Heckler, 653 F. Supp. 1229, 1242
(D.D.C. 1987) (ordering FDA to publish a proposed rule banning the
interstate sale of all raw milk and raw milk products).
    In addition to the PHS Act, FDA's legal authority to require on-
farm prevention measures under proposed Sec. Sec.  118.1 through 118.9
derives from sections 402(a)(4) and 701(a) of the FFDCA (21 U.S.C.
371(a)). Under section 402(a)(4) of the FFDCA, a food is adulterated
``if it has been prepared, packed, or held under insanitary conditions
whereby it may have become contaminated with filth, or whereby it may
have been rendered injurious to health.'' Under section 701(a) of the
FFDCA, FDA is authorized to issue regulations for the FFDCA's efficient
enforcement. A regulation that requires measures to prevent food from
being held under insanitary conditions whereby either of the proscribed
results may occur allows for efficient enforcement of the FFDCA. See,
e.g., regulations to require HACCP systems for fish and fishery
products (21 CFR part 123) and juice (part 120) and regulations to
require a safe handling statement on cartons of shell eggs that have
not been treated to destroy Salmonella microorganisms and to require
refrigeration of shell eggs held for retail distribution (parts 101 and
115).
    Salmonellosis is a communicable disease that results from
intestinal infection with Salmonella and is characterized by diarrhea,
fever, abdominal cramps, headache, nausea, and vomiting. Contaminated
shell eggs are the predominant identified food source of SE-related
cases of salmonellosis in the United States. Lack of adequate on-farm
prevention measures for the production of shell eggs can lead to the
presence of SE in shell eggs and increase the likelihood of human
illness if the eggs are not treated or thoroughly cooked. Infection may
also be transmitted from person to person and animal-to-person. The
provisions in the proposed rule are necessary to prevent SE from
entering the farm and to prevent SE, if present, from cross
contaminating the layers or eggs on the farm. We tentatively conclude
that a regulation to require on-farm measures is necessary to prevent
the spread of communicable disease and to prevent shell eggs from being
prepared, packed, or held under insanitary conditions whereby they may
have become contaminated with filth, or whereby they may have been
rendered injurious to health.
    Although the egg market is largely regional, it involves
significant shipment of shell eggs from State to State. Moreover,
shipment of SE contaminated eggs from one State to another has
contributed to the geographical spread of disease outbreaks in the U.S.
human population. For example, eggs from Pennsylvania were implicated
in an outbreak of SE infection reported in Asbury Park, NJ, involving
at least 47 persons (Ref. 63). Eggs from Maryland were implicated in an
outbreak in Livonia, NY, where 12 patrons of a restaurant reported
gastrointestinal illness linked to consumption of omelets made from
pooled grade A eggs (Id.). Further, consumption of raw eggs was
associated with an SE outbreak at a catered wedding reception in New
York, where Caesar salad dressing was implicated as the cause of SE
illnesses. The Caesar salad dressing, made with 18 raw shell eggs
traced to a Pennsylvania producer, was left unrefrigerated for 2 hours
at the catering establishment, held in an unrefrigerated truck until
delivered, and served at the reception 4.5 hours later (Ref. 64).
 
    If eggs are not produced using SE prevention measures, SE is more
likely to be present in the shell eggs, thereby increasing the
likelihood of human illness if the eggs are not treated or thoroughly
cooked. We tentatively conclude that it is necessary for producers with
3,000 or more layers on a farm that do not sell all of their eggs
directly to consumers and that produce for the table market shell eggs
that do not all receive a treatment, to produce shell eggs using all of
the proposed rule's measures to prevent the spread of communicable
disease. We also tentatively conclude that only the refrigeration
requirements of proposed Sec.  118.4 would apply to producers that
provide shell eggs to the table market but do not sell all of their
eggs directly to consumers and have 3,000 or more layers at a farm, and
whose eggs receive a treatment. We have previously explained, in
section III.B of this document, why we are proposing to exempt
producers who sell all of their eggs directly to consumers and who have
fewer than 3,000 laying hens at a farm from the SE prevention measure
requirements.
 
[[Page 56844]]
 
    Activities that are intrastate in character, such as the production
and final sale of shell eggs to a retail establishment or institution
for ultimate consumption by the consumer within one State, are subject
to regulation under section 361 of the PHS Act when intrastate
regulation is necessary to prevent the interstate spread of disease
(State of Louisiana v. Mathews, 427 F. Supp. 174, 176 (E.D.La. 1977)).
We tentatively conclude that the on-farm SE prevention measures in
proposed Sec. Sec.  118.1 through 118.10 must also apply to producers
of shell eggs who sell their eggs intrastate, other than directly to
consumers. The record in this rulemaking demonstrates that shell eggs
can function as a vehicle for transmitting foodborne illness caused by
Salmonella (Refs. 7, 8, and 9). Similarly, the record (Ref. 65)
demonstrates that consumers, including tourists and other travelers,
are likely to purchase intrastate raw shell eggs or products made with
them. These consumers subsequently take the eggs or products back to
their home state where the eggs or products are consumed, or the
consumers carry a communicable disease back to their home state as a
result of such consumption, thereby creating the risk that foodborne
illness may be spread from one State to another as a result of such
consumption. Although producers do not ship such eggs across State
lines, there have been interstate SE outbreaks associated with such
eggs (Ref. 66).
    We believe that a regulation to require on-farm SE prevention
measures or shell eggs produced and sold within a State would reduce
the risk of SE illness. We are concerned that if we do not require on-
farm prevention measures for shell eggs that are produced and sold in
one state, the regulations will not prevent the introduction of SE
contaminated eggs into other states and, thus, will not prevent the
introduction of salmonellosis from one State to another. We tentatively
conclude that the spread of salmonellosis among states from SE-
contaminated eggs cannot be adequately controlled without extending the
on-farm requirements to producers of eggs whose eggs are shipped within
one state.
    We are proposing to use our authority under section 361 of the PHS
Act to institute recordkeeping requirements. We have previously imposed
recordkeeping requirements under section 361 of the PHS Act in
regulations governing blood and tissue products (parts 606, 640, and
1270) and juice (part 120).
    Regulations governing blood and blood components require that
records be kept covering each step in the their collection, processing,
compatibility testing, storage and distribution and documentation
covering shipping temperature and donor information (examination
results, tests, laboratory data, interviews, written consent, and
health certification) (Sec. Sec.  606.160 and 640.72).
    Recordkeeping requirements are also included in FDA's Human Tissue
Intended for Transplantation regulations in part 1270, which also
include requirements that records be maintained relating to infectious
disease tests, donors, and the receipt, distribution, and disposition
of human tissue (Sec.  1270.35).
    HACCP systems regulations for juice also require significant
recordkeeping. The regulations generally require each juice processor
with a food hazard that is reasonably likely to occur to maintain a
written hazard analysis and HACCP plan (21 CFR 120.12). The regulations
further require that such processors maintain records documenting the
implementation of the sanitation standard operating procedures, the
ongoing application of the HACCP plan, verification of the HACCP
system, and validation of the HACCP plan or hazard analysis. Id.
    Section 361 of the PHS act provides FDA with authority to issue
regulations necessary to prevent the introduction, transmission, or
spread of communicable disease. Recordkeeping requirements are
necessary for FDA to ensure that producers follow the sampling,
testing, and, if necessary, diversion requirements under proposed part
118 for the production of shell eggs. We are proposing environmental
testing as an indicator of whether a producer's SE prevention measures
are effective. Testing would provide information on the SE status of a
poultry house and indicate the need to take appropriate action if the
measures were not preventing SE. Under the proposed rule, a positive
environmental test would necessitate review of the implementation of SE
prevention measures and testing of eggs (unless all eggs in the poultry
house are subsequently diverted for the life of the flock). Testing
would reduce the number of SE-positive eggs that reach consumers by:
(1) Improving the effectiveness of SE prevention measures by indicating
when prevention measures are ineffective and need to be modified and
(2) triggering diversion to treatment of SE-positive eggs.
    Records of SE testing are needed to allow FDA to determine whether
SE prevention measures are being implemented in an effective manner
over time. Furthermore, FDA personnel may not be present when producers
perform environmental sampling and collect eggs for testing. Records
would allow FDA to verify that sampling is done in a scientifically
valid manner and that the required testing is conducted. Records would
also allow FDA to confirm test results and that producers are taking
appropriate actions based on the results (e.g., reassessment,
additional testing, diversion). The records would provide assurance, to
both the producer and FDA, that the risk of SE-contaminated eggs being
provided to consumers is being minimized, either through an SE-negative
poultry house or diversion of SE-contaminated eggs.
    In addition to having the authority under the PHS Act to require
recordkeeping, we believe we also have the authority to require access
to the records. Because the on-farm sampling, testing, and diversion
requirements are necessary to minimize the risk of communication of
salmonellosis, access to records that demonstrate a farm has followed
such requirements in part 118 is essential to confirm compliance and
achieve the full benefits of the rule. We also have the authority,
under section 361 of the PHS Act, to copy the records when necessary.
We may consider it necessary to copy records when, for example, our
investigator may need assistance in reviewing a certain record from
relevant experts in headquarters. If we are unable to copy the records,
we would have to rely solely on our investigators' notes and reports
when drawing conclusions. In addition, copying records will facilitate
followup regulatory actions. Therefore, we have tentatively concluded
that the ability to access and copy records is necessary to enforce the
rule and prevent the spread of communicable disease. A failure to
comply with the rule's records provisions would subject the producer to
the administrative procedures under proposed Sec.  118.12. In other
relevant sections of this document, we explain in more detail the
recordkeeping provisions that we believe are necessary and, because
they are limited to what is necessary, that we believe do not create an
unreasonable recordkeeping burden.
    Under the PHS Act, the Federal, State, and local governments have a
long tradition of cooperation. The PHS Act specifically recognizes
cooperation between the Federal, State, and local governments as an
important tool for public health officials. Previously, in the area of
food safety, FDA has used portions of the PHS Act (e.g., sections 310
and 311 (42 U.S.C. 242 and 243)) that focus on Federal assistance to
the States. The Conference for Food
 
[[Page 56845]]
 
Protection (CFP) and the Food Code are a result of Federal, State, and
local cooperation and Federal assistance to States and localities under
the PHS Act. Section 311 of the PHS Act not only recognizes Federal
assistance to the States, but it also recognizes that States and
localities may be able to assist the Federal Government. This section
provides in part: ``The Secretary is authorized to accept from State
and local authorities any assistance in the enforcement of quarantine
regulations made pursuant to this Act which such authorities may be
able and willing to provide.''
    We believe that, under sections 311 and 361 of the PHS Act, there
are several ways we could accept assistance from the States in the
enforcement of the on-farm regulation. For example, FDA could accept
State and local assistance in the inspection of shell egg farms and
then use those inspections as the basis for detention and diversion or
destruction under proposed Sec.  118.12 (as discussed in section III.K
of this document) or as the basis for an enforcement action under the
FFDCA. Another option would be to authorize the States and localities
to conduct inspections and enforce the on-farm requirements through the
administrative enforcement remedies set out in proposed Sec.  118.12,
while FDA could hear appeals with judicial review available after FDA's
decision. FDA also believes that sections 311 and 361 of the PHS Act
authorize the agency to issue a regulation that would allow States and
localities to enforce the SE prevention on-farm requirements
themselves.
    After examining these options, FDA has tentatively concluded that
all except the last option (allowing States and localities to enforce
the requirements themselves) would prove too cumbersome. FDA believes
that a cooperative approach would be the most effective means to
enforce the on-farm requirements. We are proposing a similar approach
to the one chosen for the egg labeling and refrigeration regulations
(parts 101 and 115). Specifically, FDA has tentatively decided to allow
agencies of those States and localities that are able and willing to
inspect or regulate shell egg producers, as authorized under sections
311 and 361 of the PHS Act, to enforce the SE prevention measures along
with FDA. FDA recognizes that States and localities currently do this
type of enforcement and has tentatively concluded that this option will
be the most effective and efficient use of Federal, State, and local
food safety resources. Accordingly, proposed Sec.  118.12(c) provides
that those States and localities that are able and willing are
authorized under sections 311 and 361 of the PHS Act to enforce
proposed Sec. Sec.  118.1 through 118.10 using the administrative
procedures in Sec.  118.12, as set out in section III.K of this
document. With respect to the hearing procedures, we recognize that
many States and localities already have administrative procedures in
place for hearings. The proposed regulation would allow them to use a
similar hearing process as long as that process satisfies basic due
process requirements.
    FDA recognizes that some of these are new approaches to enforcement
of food safety regulations, and is soliciting comments on this aspect
of this proposed regulation. FDA is particularly interested in comments
on how State, local, and Federal food safety authorities can best work
together to ensure effective and efficient implementation and
enforcement of food safety standards.
 
M. Response to Comments Related to On-Farm Prevention Measures
 
    In this section, we are responding to comments that the agency
received in response to the 1998 joint FDA/USDA ANPRM on Salmonella
Enteritidis in eggs and in response to the public meetings on egg
safety that the agency sponsored with USDA in Columbus, OH (March 30,
2000), Sacramento, CA (April 6, 2000) and Washington, DC (July 31,
2000). FDA/USDA received approximately 73 letters to the 1998 ANPRM
(Docket No. 97N-0322), each containing one or more comments. We
received approximately 370 letters to Docket No. 00N-0504 for the
public meetings on egg safety, each containing one or more comments.
Comments on both the ANPRM and the public meetings were received from
egg farmers, egg packers, trade associations, consumers, consumer
interest groups, animal interest groups, academia, State government
agencies, and foreign government agencies. We are responding to
comments received to these dockets to the extent that they are relevant
to this proposal.
    (Comment 1) A few comments stated that it is not necessary to
establish regulations for egg safety because the risk of illness from
an SE-contaminated egg is low. Comments referenced the SE Risk
Assessment in stating that the risk of an egg being contaminated with
SE is 0.005 percent. In addition, 30 percent of the 3.3 million eggs
that are contaminated annually are used for the production of egg
products that are pasteurized and, therefore, do not result in illness.
Comments maintained that the risk of illness from the remaining 2.3
million SE-contaminated eggs is less than the risk from consuming other
high-protein foods and, therefore, is acceptable and does not warrant
Federal regulatory action.
    (Response) We do not agree with these comments. We believe that the
current risk of illness from consuming SE-contaminated eggs is still
too high, especially when there are cost-effective measures that can be
taken that will reduce the risk. In 2001, the isolation rate of SE was
2.0 per 100,000 population and the contribution of SE (corrected for
underreporting) to total salmonellosis was estimated to have been
213,046 illnesses, including 2,478 hospitalizations, and 87 deaths
(Refs. 4 and 5). We estimate that the cost to society of egg-associated
SE illnesses in a year is $1.8 to 3.1 billion. (See discussion in the
Preliminary Regulatory Impact Analysis in section V. of this document.)
    As to the argument that eggs do not carry the same risk as other
high protein foods (presumably meat and poultry), this is not a reason
to ignore the risk from eggs. USDA has instituted HACCP programs to
reduce the risk of foodborne illness from meat and poultry. Likewise,
we are proposing measures in this proposed rule to reduce the risk of
foodborne illness from eggs because there are practical steps that can
be taken to reduce that risk. Consumers also are more aware of the
risks associated with consuming undercooked meat and poultry than they
are of the risks of consuming raw or undercooked eggs (Ref. 23). Thus,
we disagree with this comment and believe that the risk of foodborne
illness from consumption of SE-contaminated eggs is too high and
warrants Federal regulatory action.
    (Comment 2) Several comments stated that not enough is known about
the ecology of SE to develop credible on-farm prevention measures. The
comments further stated that the relationship between an environment
that is contaminated with SE and an egg that is contaminated with SE
has not been established and, therefore, it is not possible to develop
appropriate SE prevention measures.
    (Response) We do not agree with these comments. As stated in
section III.E of this document, data from the SE Pilot Project have
shown that certain measures (e.g., rodent and pest control,
biosecurity, use of SE-monitored chicks, and cleaning and disinfection)
have been effective in reducing the number of poultry houses with SE-
positive environments (Ref. 39). When these measures were implemented,
the number of positive houses decreased
 
[[Page 56846]]
 
from 38 to 13 percent over a 3-year period. Although we agree that more
information is needed on the ecology of SE, we believe that prior
experience from voluntary egg QA programs has indicated that there are
preventive controls that can be implemented on a farm that will prevent
SE contamination of eggs.
    We agree that the exact relationship between an environment that is
contaminated with SE and an egg that is contaminated with SE is not
known. However, data from existing QA programs have indicated that,
when a poultry house environment is contaminated with SE, the
prevalence of SE-contaminated eggs is approximately 1 in 3,600 or, as
estimated in the SE risk assessment, 1 in 1,400. A prevalence of SE-
contaminated eggs of 1 in 1,400, or even 1 in 3,600, is unacceptable
from a public health standpoint. Preventive measures have been
developed to prevent the SE-contamination of poultry houses on a farm,
which would reduce the production of SE-contaminated eggs that may
cause foodborne illness. Therefore, it is appropriate that we take
steps to ensure that producers are employing these preventive measures
to reduce the prevalence of SE-contaminated eggs by proposing to
require use of the SE prevention measures.
    (Comment 3) One comment stated that on-farm prevention measures are
not necessary because most of the outbreaks of SE illness can be
attributed to improper food handling.
    (Response) We do not agree with this comment. Although we are aware
that many outbreaks of foodborne illness occur as a result of cross
contamination during food handling, many egg-associated SE outbreaks
have been traced back to eggs contaminated during production. In
section II.A of this document, we discuss several outbreaks that were
traced back to eggs from farms that had SE-positive environments at the
time of traceback. In addition, the increase in egg-associated SE
outbreaks in the mid-1980s occurred at the same time that transovarian
contamination of SE in eggs was first being detected. Although proper
handling by retailers and consumers can reduce egg-associated
illnesses, it is important to take practical measures to prevent eggs
from becoming contaminated with SE in the first place.
    (Comment 4) Many comments maintained that induced molting of laying
hens is cruel to the birds and contributes to SE contamination of eggs
and, therefore, should be banned. In support of this position, these
comments cited the information outlined in the petition from United
Poultry Concerns, Inc., and the Association of Veterinarians for Animal
Rights (described in section II.J of this document) and data on induced
molting collected during the SEPP.
    (Response) The issue of whether induced molting should be stopped
because it is cruel to laying birds is outside the scope of this
proposed rule. With regard to the assertion that induced molting should
be banned because it contributes to SE contamination of eggs, we do not
agree with that comment at this time. However, we seek comment,
discussed below, on whether certain practices related to molting are
appropriate to reduce SE contamination of eggs within a poultry house.
    Several studies (described in section II.J of this document and
(Ref. 67)) have been cited in comments as evidence for the claim that
induced molting increases SE contamination of eggs and, thereby, SE
illness in consumers. Comments have cited studies by Holt and coworkers
that indicate that induced molting impairs the laying hens' immune
systems and invites SE infection. While we agree that the previously
mentioned studies have implications with regard to the health of laying
hens, the studies do not address infection of eggs from these birds
and, therefore, cannot be interpreted to conclude that induced molting
increases SE contamination of eggs (Ref. 67).
    The comments also cited studies by Holt and coworkers on the
relationship between indigenous intestinal microflora and induced
molting. These studies noted a difference in the kinetics of intestinal
infection between molted and unmolted birds but did not link intestinal
microflora to intestinal infection and did not discuss transmission of
SE to eggs. Studies by Henzler and Opitz (Ref. 48) linking induced
molting and rodents in the poultry house environment were cited in
comments. Although research has indicated that rodents are an important
factor in the epidemiology of SE in the poultry house, no evidence
exists that correlates infected rodents to molting (Ref. 67).
    Comments requesting that we ban induced molting cited a study by
Holt (Ref. 68) linking stress in molted hens to transmission of SE
within a poultry house. Possible stress during molting has been
suggested as a cause for increased intestinal shedding of SE, which
then increases transmission of SE within a poultry house, observed in
the Holt study. However, the author of the study did not provide
evidence to support the hypothesis that stress increases intestinal
shedding of SE, which then increases transmission of SE within a
poultry house. The author also suggested several other factors aside
from induced molting that could result in increased transmission of SE
to uninfected hens (Ref. 67).
    The comments also cited a study by Bailey and coworkers (Ref. 69),
as well as the Holt study (Ref. 68), that linked consumption of SE-
contaminated feathers during molting with increased infection. Although
feather consumption has been observed in molted hens, and some
researchers have noted that this behavior could contribute to the
spread of Salmonella in a poultry house, there is no evidence to
suggest that the behavior is related to stress-induced colonization of
SE in molted hens (Ref. 67).
    According to the comments, the environment, such as crowded
conditions, in which induced molting is conducted also encourages SE
infection and multiplication. Although induced molting in crowded
conditions may exacerbate transmission of SE, there is little or no
evidence to suggest that molting in crowded conditions affects SE
transmission any more than would molting or crowding independently.
    The comments also cited studies by Holt (Ref. 68), by Nakamura, and
by Seo and coworkers (Ref. 70) indicating that induced molting
increases fecal shed of SE and that induced molting promotes horizontal
transmission of SE within a poultry house. We agree that molting
induced by withholding feed increases fecal shedding of SE in birds
infected with SE in laboratory environments and increases horizontal
transmission of SE among birds. Therefore, we question whether certain
practices related to molting on a farm may be appropriate to reduce SE
contamination of the environment and, thus, to decrease production of
SE-contaminated eggs.
    In addition to concerns we have already expressed, we note that
most of the research conducted on induced molting was done in
conditions that limit its applicability. Most studies have been done
with single lines of specific pathogen-free chickens that have been
exposed to a narrower range of microflora than commercial laying hens.
Therefore, the pathogen-free chickens may be immunologically na[iuml]ve
and, consequently, may be more susceptible to serious infection than
commercial laying hens. Studies also have been performed in controlled
laboratory settings that do not accurately represent the conditions in
a poultry house. Finally, molting experiments have typically relied on
very high populations of a single, laboratory
 
[[Page 56847]]
 
modified, and propagated strain of SE. Behavior of single strains may
not indicate behavior of populations of wild strains of SE.
    The comments opposed to molting also have stated that field data,
which was used in the SE risk assessment, from the SEPP indicated that
molted birds lay more SE-contaminated eggs and, therefore, molting
should be prohibited for public health reasons (Ref. 71). In addition,
the comments maintained that statements made by Dr. John Mason
indicated that forced molting caused increased SE-contamination of
eggs.
    We agree that the field data collected in the SEPP suggest a link
between molting and production of SE-contaminated eggs. However, we
have several concerns about the conclusiveness of these data. First,
there may have been bias in sampling because flocks participating in
the SEPP were chosen by producers who may have had a tendency to choose
flocks that were known to be SE-positive in order to implement
procedures that might change the SE status of those flocks. Therefore,
these flocks may not be representative of all flocks. Second, the SEPP
report indicates that the authors realized that differences in egg
contamination that were being attributed to molting may also be a
result of the age of the layers since only older flocks are molted.
With regard to the statements made by Dr. John Mason, he has indicated
that, when he made statements about forced molting causing increased
SE-contamination of eggs, he was referring to information from the SEPP
study and research discussed in the previous paragraphs (Ref. 72).
    At this time we do not believe that we have adequate data upon
which to rely for a final decision on the issue of the relationship
between induced molting and SE contamination of the environment and of
eggs. We know that research currently is being conducted that will
address several of these data gaps. To discuss some of the research and
address the data gaps, FDA sponsored an SE research meeting in Atlanta,
GA, on September 8, 2000 (65 FR 51324, August 23, 2000). Ongoing
research that was generated or discussed at the meeting includes
projects on alternative diets for laying hens undergoing molting and an
on-farm study to evaluate the effect of molting on SE in eggs.
    We specifically request comment and data related to our discussion
of induced molting. In view of the scientific data that suggest that
molting by feed withdrawal may increase shedding of SE into the
environment or eggs (Refs. 68, 70, and 71), we seek comment on the
following potential prevention measures that we may consider for
inclusion in any final rule: (1) The use of alternative diets to
replace feed and water withdrawal to induce molting, (2) the use of
competitive exclusion (defined in footnote 3 of this document) to
reduce fecal shedding of SE during molting, (3) more frequent removal
of manure during and immediately following molting, (4) alternative
timing for environmental testing or additional environmental testing
during or immediately following molting, and (5) a prohibition of
molting in SE-positive houses. Depending upon the comments received, we
will consider including provisions regarding molting in any final rule.
These provisions may include, but are not limited to, the need for
additional testing of molted flocks or restrictions on the manner in
which a molt may be induced.
    (Comment 5) Many comments addressed the use of vaccines for laying
hens as an intervention against SE contamination of eggs. Several
comments stated that vaccines against SE have been proven effective in
field trials undertaken through PEQAP; flocks in the PEQAP program that
were vaccinated against SE had significantly fewer environmental
samples positive for SE than nonvaccinated flocks. In addition, no SE-
positive eggs from a vaccinated flock were found during the 3-year
study period. A few comments stated that vaccinating flocks against SE
would have the most significant impact on SE prevention of any possible
intervention. In addition, a few comments recommended vaccination for a
flock placed in a poultry house if the previous flock in that house had
a positive SE environmental test. Conversely, other comments stated
that the data from the PEQAP study were inconclusive because too few
flocks were included in the study.
    (Response) We agree that vaccines show promise in reducing the
prevalence of SE in laying hens. The PEQAP data indicate that the SE
bacterin vaccines used in that program were 70 percent effective in
reducing SE-positive environmental samples in flocks (Ref. 73). We find
these data to be encouraging. In addition, field trials in ME showed
that vaccination significantly reduced the mean fecal counts of
vaccinated birds compared to nonvaccinated birds (Ref. 74). We are also
aware that some existing egg QA programs require their participants to
vaccinate replacement flocks that are being placed into a house that
had an environmental SE-positive while the previous flock occupied that
house.
    However, we also agree that more information on the effectiveness
of vaccines needs to be generated before we would mandate vaccination
as an SE prevention measure. Although approximately 900 flocks
participated in the vaccination field trials in the PEQAP study, less
than 100 of those flocks were vaccinated (Ref. 73). Only seven poultry
houses participated in the ME field trials, three of which contained
vaccinated birds (Ref. 74).
    Vaccines are also expensive and labor intensive; we estimate that
vaccines cost 13.5 cents per layer, including labor (see discussion in
the Preliminary Regulatory Impact Analysis in section V. of this
document). Members of our national egg safety standards working group
indicated that vaccines are only economically justified for heavily
contaminated flocks. Since we know that cleaning and disinfection can
decontaminate an SE-positive poultry house (Ref. 39), we do not believe
that it is currently appropriate for the agency to propose to require
that producers incur the additional cost of mandatory vaccines when
cleaning and disinfection, biosecurity, and rodent and pest control may
resolve the problem. We encourage producers to use vaccines in the case
of persistent SE contamination within a poultry house or as prescribed
by a veterinarian, but do not believe that we currently can justify
mandating their use.
    (Comment 6) A few comments maintained that there is no indication
that feed or water has ever been associated with transfer of SE to
laying hens and should not be included in the required SE prevention
measures. However, one comment stated that potable water should be one
of the SE prevention requirements, and several comments stated that SE-
negative feed should be included in mandatory SE prevention measures.
    (Response) Although we acknowledge that feed and water cannot be
ruled out as potential sources of SE contamination in poultry houses,
we believe provisions for feed and water are not necessary in the
required SE prevention measures. We are proposing to establish minimum
national SE prevention measures, and evidence of feed and water being
the source of SE contamination of laying hens or shell eggs is rare.
    Although SE contamination of feed has been documented by
researchers, SE contaminated feed has not been implicated in the
occurrence of SE in laying hens or in eggs in the United States.
However, as the Layers study indicated, many producers perform
 
[[Page 56848]]
 
some testing of feed or feed ingredients for SE (Ref. 25). We encourage
this as a general good management practice.
    Water has not been directly implicated in the transfer of SE to
laying hens and, therefore, we have not included it in the proposed
provisions in proposed Sec.  188.4. However, we encourage producers to
ensure that their water meets the microbiological standards established
by the Environmental Protection Agency for potable water.
    (Comment 7) Several comments stated that routine, complete cleaning
of poultry houses is not practical, particularly if the house is SE-
negative. A few comments also maintained that wet cleaning and
disinfection of poultry houses, while it may reduce SE, is not
practical in colder months.
    (Response) We agree that cleaning and disinfection of poultry
houses is not warranted to reduce SE if the house is SE-negative.
Although cleaning and disinfection of an SE-negative poultry house at
depopulation may be prudent for the control of avian diseases, and dry
cleaning and manure removal at depopulation are prudent practices in
general, we do not have data and information that suggest that cleaning
and disinfecting an SE-negative poultry house would reduce the
incidence of SE-contaminated environments or SE-contaminated eggs. In
Sec.  118.4, we are proposing to require that, if an environmental test
or an egg test is positive for SE, then you must clean and disinfect
the poultry house before new laying hens are added to the house. If the
environmental test is negative, then cleaning and disinfection is not
needed to decontaminate the house of SE. However, we recommend manure
removal and dry cleaning of poultry houses between occupation by laying
flocks as a general good management practice.
    We recognize that there are situations in which it may be difficult
for producers to wet clean a poultry house (i.e., winter months, dirt
floors). Data from a voluntary QA program (Ref. 39) and the NAHMS SE
study (Ref. 27) indicate that wet cleaning is effective in
decontaminating SE-positive poultry houses. However, as we discussed in
section III.E.4 of this document, there are some studies in which wet
cleaning may have resulted in some previously SE-negative poultry
houses becoming positive. Even so, based on the totality of the
information we presently have, we believe that wet cleaning results in
an overall reduction in the number of SE-positive poultry houses
sufficient to justify its inclusion in the required SE-prevention
measures. We plan to consider comments we receive on the issue and any
other new evidence before deciding whether to require wet cleaning in a
final rule.
    (Comment 8) One comment stated that FDA should address on-farm
washing of eggs because certain producers wash eggs before they are
sent to a packer/processor.
    (Response) We do not agree with this comment. We are not aware that
on-farm washing of eggs in an offline operation (i.e., an operation
that sends its eggs elsewhere for processing for retail sale) is a
widespread practice. The Layers study indicated that prewashing of eggs
before processing was practiced on only 5 percent of farms (Ref. 26).
We would discourage the practice unless producers follow the procedures
for proper egg washing outlined by USDA in 7 CFR 56.76(e).
    We request comment specifically on the prevalence of on-farm
washing of eggs in offline operations. If comments indicate that
prewashing of eggs on the farm is more prevalent than indicated in data
the agency currently have, we may consider adding a provision for
washing of eggs to the required SE-prevention measures.
    (Comment 9) Several comments stated that egg testing and diversion
should not be used as SE management tools and that these activities
would just divert producers' attention away from practices that will
reduce SE in poultry houses.
    (Response) Although we agree that egg testing itself is not an SE
management tool, diversion of eggs that may be contaminated with SE
from the table egg market is a method of preventing consumer illness
and may be considered an SE management tool. In addition, we do not
agree that egg testing and diversion will divert producers' attention
away from SE prevention measures. We are proposing to require egg
testing only if the environmental test is SE-positive.
    As stated previously, data have indicated that flocks in an SE-
contaminated environment produce SE-contaminated eggs with greater than
average prevalence (see comment 2 of this section). These contaminated
eggs could reach the consumer and cause foodborne illness. It is an
important public health precaution for a producer to begin egg testing
upon finding that the poultry house environment is contaminated with
SE. If egg testing reveals that SE-contaminated eggs are being produced
by a flock, the eggs from that flock must be diverted to a treatment as
defined in Sec.  118.3. Diversion prevents foodborne illness that might
occur had those contaminated eggs reached a consumer. Prevention of
egg-associated foodborne illness is the goal of the provisions in this
proposed rule. We are proposing, in Sec.  118.6, egg testing protocols
by which a producer who must divert eggs can return, after certain
testing conditions are met, to producing eggs for the table egg market.
    (Comment 10) A few comments stated that any requirements that
mandated diversion of shell eggs to breaking facilities would be
devastating to the Hawaiian egg industry because there are no egg
breaking facilities in HI.
    (Response) We recognize that HI presently has no egg breaking
facilities to which eggs can be diverted. We will consider the status
of egg breaking facilities in HI prior to issuing any final rule and
seek further comment in this proposed rule on options for handling
diverted eggs in HI.
    (Comment 11) Many comments stated that environmental testing is
appropriate to indicate whether SE prevention measures are working
effectively; however, a few comments noted that other methods (e.g.,
egg yolk antibody testing) may prove to be equally effective as
environmental testing and could also be used to gauge the effectiveness
of SE prevention measures.
    (Response) We agree with these comments. We have stated in the
proposal that environmental testing must be used to evaluate the
effectiveness of the SE prevention measures and have discussed various
methods to sample manure in a poultry house. However, we have also
solicited comment on alternative methods of sampling the environment
that may be more uniform in different styles of poultry house than
manure testing. We encourage the development of methods that are at
least as indicative of SE contamination in a poultry house as manure
testing and that are more rapid and less expensive.
    (Comment 12) Several comments stated that any SE prevention
measures required for producers should take into account regional
differences in the egg industry.
    (Response) We agree with the comments. In this proposed rule, we
are proposing to require specific controls for SE prevention, but are
not specifying the exact manner in which individual producers must
comply with the provisions. Each producer must develop SE prevention
measures that are appropriate for his unique situation, including
regional differences. We recognize there are regional differences in
the egg industry and anticipate that they will be reflected in the
specific SE
 
[[Page 56849]]
 
prevention measures. For example, producers with different poultry
house styles (e.g., open-sided versus enclosed) may choose to perform
rodent control or cleaning and disinfection in different manners, as
the most effective method may be differ depending on house style.
    (Comment 13) A few comments requested that, if egg testing is
required, the number of eggs tested be based on flock size.
    (Response) We do not agree with this comment. We believe that it is
reasonable to require that producers with 3,000 or more laying hens
test a total of 4,000 eggs in 4 1,000-egg samples, should their poultry
house be SE-positive. It is important that enough eggs be tested to
achieve a certain level of assurance that SE is not present in the eggs
(see discussion in section III.G.2 of this document and (Ref. 61)).
    (Comment 14) Several comments requested that multiple environmental
tests be required during the life of a flock to ensure that the maximum
number of contaminated eggs is being diverted from consumption as table
eggs.
    (Response) In this proposed rule, we are establishing minimum
environmental testing requirements as an indicator of the effectiveness
of SE prevention measures. We do not agree that multiple environmental
tests are necessary. This minimum testing requirement does not preclude
producers from testing more frequently during the life of a flock. To
reach the public health goal of reducing SE illnesses, we have proposed
to require that producers use their resources towards implementing
measures that will prevent SE contamination of eggs. These measures
include use of chicks and pullets from SE-monitored breeder flocks,
biosecurity, rodent and pest control, cleaning and disinfection of an
SE-positive poultry house, and refrigerated storage of eggs held at a
farm more than 36 hours. Testing alone does not reduce SE contamination
of eggs. We believe that environmental testing can be a useful
indicator of whether the SE prevention measures are working
effectively. We believe one environmental test per laying cycle per
flock in a poultry house is sufficient as an indicator of the efficacy
of the prevention measures. (See discussion in section III.F.1 of this
document.)
 
N. Transportation of Shell Eggs
 
    To reach the goal of significantly reducing SE illnesses, egg
safety measures must be put in place along the entire farm-to-table
continuum. FDA is coordinating efforts with FSIS to cover the
refrigeration of shell eggs throughout distribution. Refrigerated
transport and storage of eggs packaged for the ultimate consumer and
refrigerated storage of eggs at retail are already required by
regulation (discussed previously in section II.D.1 of this document).
In a future proposed rulemaking, FSIS may consider applying safety
standards to the transport of eggs from packer to packer and from
packer to egg products processing plant. In order to close any gaps in
the farm-to-table continuum, FDA is seeking comment on whether to
require refrigerated transport of shell eggs not already required by
regulation or within USDA's jurisdiction; for example, transport of
shell eggs from a farm or a packer to a food manufacturing facility. We
will consider putting into place requirements similar to those we
finalized for refrigerated storage of shell eggs at retail (i.e.,
transport of shell eggs at or below 45 [deg]F ambient temperature).
 
IV. Handling and Preparation of Eggs by Retail Establishments
 
A. Inappropriate Handling of Raw Shell Eggs by Food Preparers
 
    SE outbreak investigations show that outbreaks commonly occur when
foods prepared with raw shell eggs are not properly handled by food
preparers. Common inappropriate practices for foods containing SE-
contaminated shell eggs include temperature abuse (e.g., failing to
keep eggs and foods prepared with eggs refrigerated) and inadequate
cooking. When shell eggs are combined to prepare a large volume of an
egg-containing food which is subsequently temperature abused or
inadequately cooked, these practices can cause illness in large numbers
of people if any of the shell eggs were initially contaminated with SE.
    Temperature abuse gives SE the opportunity to multiply, thereby
increasing the number of viable microorganisms ingested, especially
when eggs are consumed raw. Temperature abuse and consumption of raw
shell eggs were associated with an SE outbreak at a catered wedding
reception in New York, where Caesar salad dressing was implicated as
the cause of SE illnesses. The Caesar salad dressing was made with 18
raw shell eggs, left unrefrigerated for 2 hours at the catering
establishment, held in an unrefrigerated truck until delivered, and
served at the reception 4.5 hours later (Ref. 64).
    Incomplete cooking of raw shell eggs (e.g., soft-boiled, sunny-
side-up, and soft-poached) also allows ingestion of viable
microorganisms if any of the eggs were initially contaminated. In 1997,
incomplete cooking of raw shell eggs was associated with an SE outbreak
in Nevada where the consumption of Hollandaise sauce served in a
restaurant was linked to SE illnesses. Review of the food handling
practices showed that the sauce had been prepared from raw shell eggs
that were combined, incompletely cooked, and held at room temperature
for several hours before serving (Ref. 7).
    We also are aware that many consumers eat foods containing raw or
undercooked shell eggs. An FDA survey indicated that 53 percent of
1,620 respondents ate foods containing raw shell eggs at some time
(Ref. 75). Raw shell egg-containing foods mentioned in this survey
included cookie batter, homemade ice cream, homemade eggnog, Caesar
salad, frosting, homemade shakes, homemade Hollandaise sauce, and
homemade mayonnaise. The Menu Census Survey (1992 through 1995) (Refs.
76 and 77) showed that frosting accounted for 53 percent and salad
dressing 19 percent of occasions when raw shell egg-containing products
were consumed.
    The 1996 to 1997 Food Consumption and Preparation Diary Survey
(Ref. 77) showed that 27 percent of all egg dishes consumed were
undercooked (described as being runny or having a runny yolk or runny
white). On average, each person consumed undercooked shell eggs 20
times a year. Within the at-risk groups, women over 65 and children
under 6 consumed undercooked shell eggs 21 times a year and 8 times a
year, respectively. Moreover, consumer focus group research showed that
many participants did not realize that certain foods, such as chocolate
mousse or key lime pie, may contain raw or undercooked shell eggs and,
therefore, are potentially hazardous (Ref. 78).
 
B. SE and Highly Susceptible Populations
 
    Certain populations, such as children, the elderly, and
immunocompromised individuals, are more likely to experience severe
health problems from eating SE-contaminated eggs than the general
population (Ref. 16). For example, CDC reported that 54 of the 79
deaths associated with outbreaks of SE between 1985 and 1998 were of
individuals in nursing homes (Ref. 79). In addition, the agency found
that the likelihood of dying from a foodborne illness contracted in a
nursing home was 13 times higher than outbreaks in other settings.
According to a U.S. General Accounting Office (GAO) survey of State
regulatory officials, 24 states reported that they did not require food
service operators that serve highly
 
[[Page 56850]]
 
susceptible populations to use pasteurized eggs for any food item that
usually contains raw eggs or (2) is prepared by cracking, combining,
and holding a number of eggs prior to cooking or after cooking and
prior to service (Ref. 79). A 1998 Dietary Managers Association survey
of 136 private nursing homes, hospitals, and other care facilities and
23 Air Force hospitals across the nation showed that 35 percent of
these institutions use raw eggs to prepare batters for foods that may
not be fully cooked, such as French toast (Ref. 79).
 
C. The FDA Food Code
 
    As noted in section II.D.3 of this document, the FDA Food Code
provides FDA's best guidance to state and local authorities and to
retail industry on how to prevent foodborne illness, including special
provisions for those establishments that serve a highly susceptible
population. To date, 41 of 56 States and territories, representing 76
percent of the population, have adopted codes patterned after some
version (1993 or later) of the FDA Food Code. Twenty-one of those
States and territories (35.3 percent of the population) have adopted
codes patterned after the 1999 FDA Food Code, and 2 (2.3 percent of the
population) have adopted codes patterned after the 2001 version.
Moreover, agencies in 11 of the 15 remaining States and territories
that have not adopted a new code since 1993 are in the process of doing
so, and many efforts at adoption are targeted for completion in 2003.
Therefore, in 2003 and under the current system of state adoption, most
state and local authorities, as well as retail industry, will be
administering some aspects of FDA's best guidance as detailed in the
FDA Food Code. The egg-relevant safe handling and preparation practices
can be found in sections 3-202.11(C), 3-202.13, 3-202.14(A), 3-
401.11(A)(1)(a) and (2), and 3-801.11(B)(1) and (2), (D)(1) and (2),
and (E)(1) and (2) of the 2001 FDA Food Code.
 
D. Request for Comments
 
    As noted previously, the incidence and geographical distribution of
egg-associated SE illnesses have made SE a significant public health
concern. As discussed in section II.A of this document, data from SE
outbreaks show that outbreaks can occur when contaminated eggs are
mishandled by food preparers. Furthermore, consumption data establish
that some consumers, including highly susceptible populations, eat raw
or undercooked eggs.
    Many comments to the May 1998 ANPRM and year 2000 public meetings
maintained that proper handling of shell eggs is an important measure
that could reduce the incidence of foodborne illness. Some contended
that we should mandate those provisions of the FDA Food Code related to
egg safety. At the public meetings and in the current thinking document
distributed at the July 2000 current thinking meeting, FDA presented a
farm-to-table approach that proposed regulations to codify all egg-
related provisions of the FDA Food Code. Given State and local
government authority to manage retail food safety within their
jurisdictions, FDA is now requesting comment on whether: (1) The
current FDA Food Code system with State adoption and implementation
achieves the desired public health outcome among high-risk populations
or (2) the public health outcome for high-risk populations can only be
achieved through mandatory Federal standards and, if so, how those
standards would be best implemented. We consider high-risk populations
to be those persons who are more likely than other people in the
general population to experience foodborne disease because of the
following reasons: (1) Immunocompromised, preschool age children, or
older adults and (2) obtaining food at a facility that provides
services such as custodial care, health care, or assisted living, such
as a child or adult day care center, kidney dialysis center, hospital,
or nursing home, or that provides nutritional or socialization
services, such as a senior center.
    If you contend that the desired public health outcome for high-risk
populations can only be achieved through mandatory Federal standards,
we specifically request comment on which, if any, of the following
measures should be mandated for retail establishments that serve highly
susceptible populations:
    <bullet> Using raw eggs that are clean, sound, and meet the
restricted egg tolerances for U.S. Consumer Grade B, which minimizes
the entry of surface bacteria to the inside of eggs;
    <bullet> Using raw eggs that have been transported under
refrigeration, because refrigeration lengthens the effectiveness of the
eggs' natural defenses against SE and slows the growth rate of SE;
    <bullet> Using only egg products that have been pasteurized in
accordance with USDA's requirements under 9 CFR 590.570, which are
designed to kill or inactivate SE and other bacteria;
    <bullet> Cooking raw eggs and raw egg-containing foods thoroughly,
which kills viable SE that may be present;
    <bullet> Substituting eggs treated to achieve at least a 5-log
destruction of SE or pasteurized egg products for raw eggs in the
preparation of foods, e.g., soft-boiled, poached, or sunny-side-up
eggs, meringue, Caesar salad, hollandaise or B[eacute]arnaise sauce,
homemade mayonnaise, eggnog, homemade ice cream, that will be served
undercooked, which minimizes the risk of egg-associated SE illnesses in
consumers of those foods; and
    <bullet> Substituting eggs treated to achieve at least a 5-log
destruction of SE or pasteurized egg products for raw eggs in the
preparation of foods where eggs are combined, since combining raw eggs
to prepare a large volume of food that is subsequently temperature-
abused or inadequately cooked can cause illness in large numbers of
people if any of the eggs were initially contaminated with SE.
    If FDA were to require any of these measures, we would rely on
section 361 of the PHS Act, just as we are relying on it for the
requirements we are proposing in this document. (See section III.L of
this document.)
 
E. Response to Comments Related to Retail Standards
 
    (Comment 1) Several comments maintained that the agency should
place a greater emphasis on the retail segment of the farm-to-table
continuum because that is where the majority of the SE outbreaks occur,
with the implicated food containing undercooked eggs.
    (Response) We disagree with this comment. We do not believe that a
greater emphasis should be placed on any one segment of the farm-to-
table continuum, i.e., producer, packer, processor, or retail
establishment. In this document, FDA is proposing requirements for the
producer to produce safe eggs. As stated in section II.G of this
document, FSIS will develop standards for the packer to maintain the
safety of eggs, and for the processor to further enhance the safety of
eggs. At retail, the FDA Food Code provides guidance on handling and
preparing raw eggs to maintain or enhance egg safety. Additionally, we
are seeking comment on whether we should require facilities that
specifically serve a highly susceptible population to follow certain
safe handling and preparation practices for raw eggs.
    Most SE outbreaks occur at retail establishments because that is
where the same food is served to large numbers of people. This does not
mean that retail establishments cause the majority of SE outbreaks due
to eggs. Rather, the cause is a combination of factors starting at the
producer level, where the eggs may
 
[[Page 56851]]
 
become contaminated, and extending to the retail level, where
inappropriate handling or preparation practices may not eliminate or
minimize the impact of the contamination.
    (Comment 2) Many comments supported Federally-mandated food safety
education, training, and certification for retail food service managers
and employees.
    (Response) We agree that food safety education and training for
retail food service managers and employees is necessary, and manager
certification is a useful means of demonstrating food safety knowledge;
however, FDA has not decided whether food safety training and
certification should be Federally mandated. FDA has actively promoted
industry food safety training and certification, and encouraged joint
regulatory-industry-academia training initiatives.
    Presently, there are a wide variety of industry management training
and certification programs being offered by regulatory agencies,
academic institutions, food companies, industry groups, professional
associations, and third-party organizations. Most certification
programs share a common desire to have the food manager certificate
they issue universally recognized and accepted by others, especially by
the increasing number of regulatory authorities that require food
manager certification.
    Certification programs vary in focus and primary mission of
sponsors, organizational structures, staff resources, revenue sources,
testing mechanisms, policies toward applicants and employers of food
managers, and policies pertaining to such things as public information,
criteria for maintaining certification, and the need for
recertification. Where courses are offered, they vary in scope,
content, depth and duration, quality of instructional materials,
qualifications of instructors, and instructional approach (classroom,
on-the-job, PC-based, home study, etc.). Where testing is a program
component, varying degrees of attention are given to test construction
and test administration as they relate to nationally accepted standards
(reliability, validity, job analysis, subject weighting, cut scores,
test security, etc.).
    We believe in the utility of a mechanism for regulatory authorities
to use in determining which certificates should be considered credible
based on which certificate-issuing programs meet sound organizational
and certification procedures and use defensible processes in their test
development and test administration. Certified food protection managers
are knowledgeable about the development, implementation and enforcement
of specific policies, procedures, or standards aimed at preventing food
borne illness. Specifically, they understand the concepts necessary for
the identification of hazards, supervising or directing food
preparation activities, coordinating training, and taking corrective
action as needed to protect the health of the consumer. CFP recently
has provided the standards and procedures necessary for the independent
evaluation and accreditation of food protection manager certification
programs. (The CFP, founded in 1971, is a non-profit organization
designed to create a partnership among regulators, industry, academia,
professional organizations, and consumers to identify problems,
formulate recommendations, and develop and implement practices that
ensure food safety.)
    On May 28, 2002, the CFP entered into a cooperative agreement with
the American National Standards Institute (ANSI) regarding the
accreditation of certification bodies responsible for ensuring the food
safety knowledge of all managers it certifies. (ANSI, a private non-
profit organization, administers and coordinates the U.S. voluntary
standards and conformity assessment system.)
    On June 28, 2002, CFP published a revised version of ``Standards
for Accreditation of Food Protection Manager Certification Programs.''
These standards identify the essential components a Food Protection
Manager Certification Program must meet for universal acceptance of its
certificates. The standards have been developed after years of CFP
research into, and discussion about, Food Protection Manager
Certification Programs and are based on nationally recognized
principles used by a variety of organizations providing certification
programs for diverse professions and occupations.
    In January 2003, ANSI assumed responsibility for accrediting
certification bodies based on the CFP Standards for Accreditation of
Food Protection Manager Certification Programs.
    FDA has developed educational materials on safe egg handling and
preparation practices for food preparers and anticipates making these
materials widely available to all providers of food safety training or
certification services. While these materials will address safe
practices specific to eggs, we believe that all retail food service
establishments should ensure that their managers and employees are
properly trained in general safe food practices. We recommend that all
retail food service establishments follow the management and personnel
provisions in chapter 2 of the FDA Food Code, specifically sections 2-
101, ``Responsibility,'' 2-102, ``Knowledge,'' and 2-103, ``Duties.''
We further recommend that food regulatory officials recognize food
managers who have been certified through an ANSI-accredited program as
meeting the food safety knowledge requirement.''
    (Comment 3) One comment called for uniform recordkeeping
requirements for retail establishments to facilitate traceback and
recall activities.
    (Response) In the FDA Food Code, FDA recommends the implementation
of HACCP, of which recordkeeping is a vital component, in food
establishments because it is a system of preventive controls that is
the most effective and efficient way to ensure that food products are
safe. Use of a HACCP system emphasizes the industry's role in
continuous problem solving and prevention rather than relying solely on
periodic facility inspections by regulatory agencies.
    HACCP offers two additional benefits over conventional inspection
techniques. First, it clearly identifies the food establishment as the
final party responsible for ensuring the safety of the food it
produces. HACCP requires the food establishment to analyze its
preparation methods in a rational, scientific manner in order to
identify critical control points (CCPs) where food safety hazards might
occur and to establish critical limits and monitoring procedures. A
vital aspect of the establishment's responsibility under HACCP is to
establish and maintain records that document adherence to the critical
limits that relate to the identified CCPs, thus resulting in continuous
self-inspection.
    Secondly, as recognized in the FDA Food Code, a HACCP system allows
a regulatory agency to determine an establishment's level of compliance
more comprehensively. A food establishment's use of HACCP requires
development of a plan to prepare safe food. This plan and associated
monitoring records must be shared with the regulatory agency so that
the agency can verify that the HACCP plan is working. Using
conventional inspection techniques, an agency can only determine
conditions during the time of inspection, which provide a ``snapshot''
of conditions at the moment of the inspection. However, when evaluating
an establishment using a HACCP approach, an agency can determine both
current and past conditions. When regulatory agencies review HACCP
 
[[Page 56852]]
 
records, they have, in effect, the ability to look back through time.
Therefore, a regulatory agency can better ensure that processes are
under control. ``HACCP Guidelines'' are presented in annex 5 of the
2001 FDA Food Code.
    In section III.J.8 of this document, we are seeking comment on
whether we should require egg producers to maintain certain records.
    (Comment 4) One comment stated that the risk of illness is not
significantly increased if an egg is not fully cooked.
    (Response) We do not agree with this comment. As stated in section
IV.A of this document, SE outbreak investigations show that outbreaks
can occur when foods prepared with SE-contaminated eggs are not
appropriately handled by food preparers. Practices inappropriate for
foods containing SE-contaminated eggs include temperature abuse (i.e.,
failing to keep the eggs and foods prepared with eggs refrigerated) and
inadequate cooking. Combining raw eggs to prepare a large volume of an
egg-containing food that is subsequently temperature abused or
inadequately cooked can cause illness in large numbers of people if any
of the raw eggs were initially contaminated with SE.
    As discussed in section IV.A of this document, incomplete cooking
of raw eggs (e.g., soft-boiled eggs, sunny-side-up eggs) can allow
ingestion of viable microorganisms, including SE, if any of the eggs
were initially contaminated. In 1997, incomplete cooking of raw eggs
was associated with an SE outbreak in Nevada, where the consumption of
Hollandaise sauce served in a restaurant was linked to SE illnesses.
Review of the food handling practices showed that the sauce had been
prepared from raw eggs that were combined, incompletely cooked, and
held at room temperature for several hours before serving (Ref. 7).
Another outbreak of SE illness in an Indiana nursing home was linked to
the consumption of baked eggs. The baked eggs were prepared by
combining 180 Grade A raw shell eggs, mixing with a whisk, and baking
in a single pan at (an oven temperature of) 204 [deg]C (400 [deg]F) for
45 minutes to 1 hour. Investigators believed that inadequate cooking
occurred because the mixture was not stirred while baked (Ref. 64).
    (Comment 5) One comment asked that we cover rodent control and
Salmonella monitoring in institutional and commercial kitchens as we
would for producers as part of an on-farm SE prevention plan.
    (Response) We disagree with this comment. As discussed in section
IV.A of this document, SE outbreak investigations show that outbreaks
occur when foods prepared with SE-contaminated eggs are not
appropriately handled (i.e., temperature abuse, undercooking, combining
more than one egg) by food preparers. Although the retail establishment
environment may be the source for some foodborne illness outbreaks,
this proposed regulation focuses on the control of SE in shell eggs,
based on practices on the farm. We seek comment on whether we should
extend the rule to address the contamination of eggs or other foods
from food service environments serving a highly susceptible population.
    Furthermore, we expect that all retail establishments will make
sure that their facilities are clean and sanitary and do not contribute
to the contamination of food being prepared or served. Although this
proposal does not address rodents or other environmental factors of
retail establishments that may cause food to become contaminated, we
recommend that all retail establishments follow the physical facilities
provisions in chapter 6 of the FDA Food Code, specifically in
subsections 6-202.15, ``Outer Openings--Protected,'' 6-202.16,
``Exterior Walls and Roofs, Protective Barrier,'' 6-501.111,
``Controlling Pests,'' and 6-501.112, ``Removing Dead or Trapped Birds,
Insects, Rodents, and Other Pests.'' Of course, the retail standards
contained in the FDA Food Code are additions to basic sanitation
practices already established by Federal and State regulations covering
rodent control and environmental hazards.
    (Comment 6) One comment recommended that food handlers be
periodically tested for Salmonella, Listeria, and Escherichia coli.
    (Response) We disagree with this comment. As discussed in section
IV.A of this document, SE outbreak investigations show that outbreaks
can occur as a result of SE-contaminated eggs being inappropriately
handled by food preparers, including temperature abuse (i.e., failing
to keep eggs and foods prepared with eggs refrigerated), inadequate
cooking, and combining two or more eggs. While food preparers may be
the source for some foodborne illness outbreaks, the scope of this
proposed regulation addresses the prevention of SE in shell eggs and
does not extend to contamination of eggs or other foods from other
sources, such as food preparers. We expect that all retail
establishments will ensure that the health, cleanliness, and hygienic
practices of their employees do not contribute to the contamination of
food being prepared or served. Although this proposal does not require
that food service workers be tested for the presence of bacteria which
may cause foodborne illness, we strongly recommend that all retail
establishments follow the management and personnel provisions in
chapter 2 of the 2001 FDA Food Code, specifically in section 2-201,
``Disease or Medical Condition.''
 
V. Preliminary Regulatory Impact Analysis (PRIA)
 
A. Introduction
 
    FDA has examined the impacts of the proposed rule under Executive
Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and
the Unfunded Reforms Act of 1995 (Public Law 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; distributive impacts; and equity). Executive Order 12866
classifies a rule as significant if it meets any one of a number of
specified conditions, including having an annual effect on the economy
of $100 million, adversely affecting a sector of the economy in a
material way, adversely affecting competition, or adversely affecting
jobs. A regulation is also considered a significant regulatory action
if it raises novel legal or policy issues. FDA has determined that this
proposed rule is an economically significant regulatory action.
    The Small Business Regulatory Enforcement Fairness Act of 1996
(Public Law 104-121) defines a major rule for the purpose of
congressional review as having caused or being likely to cause one or
more of the following: an annual effect on the economy of $100 million;
a major increase in costs or prices; significant adverse effects on
competition, employment, productivity, or innovation; or significant
adverse effects on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic or export markets.
In accordance with the Small Business Regulatory Enforcement Fairness
Act, the Office of Management and Budget (OMB) has determined that this
proposed rule, if it becomes final as proposed, would be a major rule
for the purpose of congressional review.
 
B. Need for Regulation
 
    Private markets operating within the framework of the legal system
promote the health and safety of consumers. Limitations of both the
marketplace and the legal system, however, can result in inadequate
control of some health and
 
[[Page 56853]]
 
safety hazards, and reduce societal welfare.
    In a perfectly competitive market in which consumers and producers
both have full information, the optimal level of production of eggs
will be provided at an optimal level of safety. In the egg market,
however, consumers and producers do not have sufficient information on
the SE status of particular eggs. In the case of SE-contaminated eggs,
the lack of awareness and information about the risk suggests that an
inefficiently high demand exists for eggs that are produced without
using measures to prevent SE.\3\ Since the demand for eggs is not
sufficiently affected by safety considerations, the farmer's incentive
to invest in safety measures is diminished. Consequently, the market
does not provide the incentives necessary for optimal egg safety.
---------------------------------------------------------------------------
 
    \3\ Many consumers may not know that many common methods of
preparing eggs for consumption will not eliminate SE in a
contaminated egg.
---------------------------------------------------------------------------
 
    With sufficient information for consumers and producers, a legal
system that awards compensation for harm done due to SE-contaminated
eggs has the potential to remedy market imperfections by providing
producers with incentives to provide the level of safety that is best
for society. The legal system does not ensure the optimum level of
shell egg safety because consumers who become ill due to SE
contamination often do not know the reason for or source of their
illness. Even in cases where consumers are aware that their illness was
contracted from eggs, imperfect information makes it difficult to
determine who is ultimately responsible for their illness.
    In sum, the imperfect information about the risk associated with SE
from particular shell eggs means that neither the legal system nor the
marketplace is able to provide adequate economic incentives for the
production of SE free eggs. The government may therefore be able to
improve social welfare through targeted regulation. In what follows, we
will look at the costs and benefits of the provisions in the proposed
rule. We will also look at the costs and benefits of other measures to
control SE that we considered, but did not include in the proposed
rule.
 
C. Economic Analysis of Potential Mitigations: Overview
 
    We considered many possible SE prevention measures. Because of the
large number of provisions considered (and the large number in the
proposed rule) we begin our analysis in this section with an overview
of our methods of estimating the benefits and costs of the various
measures to control SE in shell eggs. In section V.D of this document,
we summarize the benefits and costs of the proposed rule and some
leading regulatory options. In section V.E of this document, we present
the detailed analysis of all of the SE prevention measures we
considered (including those in and those not in the proposed rule).
1. Measuring Benefits
    a. Modeling benefits. The primary benefit of the provisions in this
proposed rule (and the other possible measures) would be an expected
decrease in the incidence of SE-related illnesses. The benefits will be
calculated using the following model:
Benefits = base line risk x prevention (C1, C2,
C3, * * *) x value of prevention
where,
Benefits = annual health benefits realized due to this proposed rule;
base line risk = the base line level of risk facing consumers today,
expressed as the number of SE cases attributable to shell eggs;
prevention (C1, C2, C3, * * *) = the
prevention due to the implementation of a rule with components
C1, C2, C3, and so on; and
value of prevention = the social cost of one representative case of
salmonellosis. This cost includes medical costs, the value of lost
production, and the loss of welfare the individual experiences due to
pain and suffering and lost leisure time.
    We write the prevention component of the benefits equation in a
general functional form rather than an additive form because
combinations of the proposed rule's components (C1,
C2, C3, * * *) will usually not result in linear,
proportional reductions of risk. Instead, we assume that some
components are partial substitutes for one another while others
complement each other.\4\ The total risk reduction will not be the sum
of the individual components; the effectiveness of the rule could be
less than or greater than the sum of its parts.
---------------------------------------------------------------------------
 
    \4\ An example of substitute components would be rodent poisons
and traps. By themselves rodent poisons and traps may reduce the
problem of SE contamination by X percent and Y percent respectively.
However, when used together the effect on SE contamination will be
somewhat less than X percent + Y percent (though still higher than
each component alone).
    When prevention measures are complements, the total prevention
from using the two measures that reduce risk by A percent and B
percent separately is greater than A percent + B percent.
---------------------------------------------------------------------------
 
    b. Base line risk from SE in eggs. We estimated the reduction in SE
illnesses by applying the percentage prevention to the base line number
of illnesses. We estimated the base line levels of egg contamination
and the number of human illnesses that result from such contamination.
    The CDC passive surveillance system recorded 5,614 illnesses due to
SE in 2001. Using the CDC multiplier (used to estimate total cases
based on ratio of total to reported cases) of 38, we estimated the
number of illnesses due to SE to have been 213,330 in 2001.\5\ Because
SE is not unique to eggs, not all of the 213,330 illnesses due to SE in
2001 can be attributed to domestic shell eggs. CDC estimates that 16
percent of the cases reported were acquired outside of the United
States. Consequently, the base line level of domestic SE cases is
179,200. A total of 53 percent of all SE illnesses identified through
outbreak surveillance are attributable to eggs. Where a vehicle of
transmission was identified, 81 percent of outbreaks and 79 percent of
illnesses identified through outbreaks were attributed to eggs. The
midpoint of the lower bound (53 percent) and upper bound (79 percent)
estimates is 66 percent, which we assume to be the mean percent of
domestic SE illnesses attributable to eggs. Using these figures we
calculate a lower bound estimate of 94,980 (53 percent x 179,200), and
an upper bound estimate of 141,570 (79 percent x 179,200) cases due to
SE in eggs. The CDC method generates a mean point estimate, based on
2001 data, of 118,270 (66 percent x 179,200) cases for 2001.
---------------------------------------------------------------------------
 
    \5\ All data for the calculations in this paragraph and the
following paragraph are from Meade (Ref. 4) and CDC (Refs. 5, 6, 7,
and 9).
---------------------------------------------------------------------------
 
    To estimate a base line level of risk for this proposed rule, we
adjust the estimated number of cases downward to account for the
projected effects of the refrigeration and labeling rule, which will
reduce the number of cases in the coming years. We previously estimated
that the refrigeration and labeling rule will reduce illnesses from
shell eggs by 15 to 20 percent. We use the higher figure to ensure
against double counting, so the net result is a new expected base line
of 94,620 SE illnesses attributable to eggs and likely to be affected
by this proposed rule.
    Table 1 of this document illustrates how we arrived at our base
line.
 
    Table 1.--Base line Egg-Related Salmonella Enteritidis (SE) Cases
2001 Passive Surveillance Cases............................      5,614
Multiplier.................................................         38
Estimated SE Cases in 2001.................................    213,330
 
[[Page 56854]]
 
 
Cases From Outside the United States.......................        -16%
Estimated Domestic SE Cases................................    179,200
Percent of SE Cases From Eggs...........................................
  Minimum..................................................         53%
  Mean.....................................................         66%
  Maximum..................................................         79%
Egg related SE cases in 2001............................................
  Minimum..................................................     94,980
  Mean.....................................................    118,270
  Maximum..................................................    141,570
Adjustment for Refrigeration and Labeling rule.............        -20%
Future Egg Related SE Cases.............................................
  Minimum..................................................     75,980
  Mean.....................................................     94,620
  Maximum..................................................    113,250
------------------------------------------------------------------------
 
    c. Measuring the health benefits from preventing Salmonellosis. i.
The economic impact of illness from SE in eggs. Measuring the economic
impact of illness due to the consumption of SE-contaminated eggs is a
critical part of our analysis. It is therefore important that we
include all of the effects of SE on human health. These effects include
both monetary and non-monetary losses and are both acute and chronic in
nature.
    Epidemiological evidence suggests that SE leads to both acute and
chronic illnesses. The acute illness that accompanies SE generally
causes gastrointestinal symptoms. SE illness may also result in chronic
arthritis (Ref. 81). Finally, SE can result in death, especially for
the immunocompromised, children, and the elderly (Ref. 80).
    ii. The consequences of SE illness. We outline the consequences of
SE illnesses in table 2 of this document. Table 2 of this document
includes the medical outcomes of SE illness, the duration of conditions
acquired due to SE illness, and the probability of occurrence for each
condition with a given level of severity.\6\
---------------------------------------------------------------------------
 
    \6\ We use recent data from CDC to estimate the relative
prevalence of illnesses of different severities (Ref. 82). The
expected duration of illness for each category of severity is taken
from Zorn and Klontz (Ref. 81).
---------------------------------------------------------------------------
 
    We classify the gastrointestinal illness caused by SE illness as
either mild, moderate, or severe. A mild case of SE is defined as a
case that causes gastrointestinal symptoms, but is not severe enough to
warrant visiting the doctor. An individual with a mild case of SE
illness will be ill for 1 to 3 days. A moderate case of SE illness
lasts for 2 to 12 days and is characterized as a case severe enough to
necessitate a trip to the doctor or other health care professional. A
severe case of SE illness results in hospitalization and typically
lasts from 11 to 21 days.
 
                           Table 2.--Consequences of Salmonella Enteritidis Infection
----------------------------------------------------------------------------------------------------------------
                                                                                                    Percent of
         Condition and Severity                     Outcome            Duration (Days per Year)        Cases
----------------------------------------------------------------------------------------------------------------
Gastrointestinal Illness........................................................................................
  Mild..................................  No Physician Visit........  1 to 3....................           90.7
  Moderate..............................  Physician Visit...........  2 to 12...................            8.1
  Severe................................  Hospitalized..............  11 to 21..................            1.2
Arthritis.......................................................................................................
  Short-term............................  Waxing and Waning,          1 to 121..................            1.26
                                           Eventually Resolved.
  Long-term.............................  Chronic Arthritis.........  365.......................            2.40
Death...................................  Death.....................  ..........................            0.04
----------------------------------------------------------------------------------------------------------------
 
    We do not have direct estimates of the distribution of outcomes of
SE illnesses separate from the outcomes of illnesses for all
nontyphoidal Salmonella. In the absence of better information we assume
that all Salmonella serovars will result in similar distributions of
illness severity. We therefore use information that applies either to
all 1,400,000 estimated annual cases of salmonellosis or to the
1,340,000 estimated annual foodborne cases of salmonellosis. Using
general results for all diarrheal illnesses, CDC has estimated that
113,000 of the 1,400,000 Salmonella illnesses in 1997 could have
resulted in physician office visits, a rate of 8.1 percent (113,000 /
1,400,000) (Ref. 82). CDC also has estimated that foodborne Salmonella
cases lead to about 15,600 hospitalizations per year, which is about
1.2 percent (15,600 / 1,340,000) of annual foodborne cases (Ref. 4). We
assume that the remaining 90.7 percent of gastrointestinal illness
cases are mild.
    SE may also result in reactive arthritis. This illness can manifest
itself either as a relatively short-term bout of joint pain or as a
chronic condition. Studies of outbreaks imply that short-term arthritis
may last from 1 day to a total of 121 days. Chronic arthritis lasts
from the time of onset until death. Overall, we estimate that 1 to 10
percent of SE infections lead to some form of arthritis. We expect two-
thirds of these to be long-term and one-third to be short-term (Ref.
81).
    The most severe potential result of SE infection is death. CDC
estimates that 553 deaths occur due to foodborne Salmonella (Ref. 4).
The estimate implies that about 0.04 percent (553 / 1,340,000) of
foodborne cases result in death.
    iii. Quality adjusted life years (QALYs). The benefits from this
regulation will be presented in both monetary and non-monetary terms.
In section V.E of this document, the benefits will be expressed in
illnesses and deaths averted by each regulatory provision under
consideration. In the summary of benefits due to the regulation, we
present both a cost effectiveness framework (cost per illness averted
and cost per QALY saved) and a monetary benefits estimation.
    One approach to estimating health benefits involves the use of
QALYs. QALYs can be used to measure the loss of well being that an
individual suffers due to a disease or condition. QALYs do not include
the value of health expenditures caused by the condition in question;
we estimate health expenditures separately.\7\ QALYs range from 0 to 1
where 0 is equivalent to death and 1 is equivalent to perfect health.
---------------------------------------------------------------------------
 
    \7\ Although some QALY estimates include the value of medical
expenditures, particularly QALY estimates derived from survey data,
the QALY estimates used in this study do not.
---------------------------------------------------------------------------
 
    A number of methods have been constructed to measure QALYs. One
class of methods uses surveys to ask laypersons and doctors to use a
QALY scale to estimate how much someone else who is afflicted with a
given symptom or condition will suffer. This direct survey approach has
been used widely, partly because surveys of QALY values for a large
variety of symptoms and functional limitations have been
 
[[Page 56855]]
 
published (Ref. 81). An alternative method used by Cutler and
Richardson uses regression analysis to estimate the effect of
particular conditions on overall health status (Ref. 83). In our
analysis, we use both methods where appropriate.\8\
---------------------------------------------------------------------------
 
    \8\ The Cutler and Richardson approach has several advantages
over the Kaplan, Anderson, and Ganiats approach. However, it is not
clear that this approach is appropriate for valuing acute illnesses.
Therefore the Kaplan, Anderson, and Ganiats approach is used for
acute illnesses and the Cutler and Richardson approach is used for
chronic conditions. See Scharff and Jessup for a discussion of the
pros and cons of each approach (Ref. 84).
---------------------------------------------------------------------------
 
    In table 3 of this document, we present estimates of the number of
quality adjusted life days (QALDs) lost due to SE. Total QALDs lost are
derived by multiplying the estimated number of QALYs lost by 365. Then,
to calculate the disutility per day, or one QALD, we divide by the
average duration of the illness. Like QALYs, QALDs range from 0 to 1
where 0 is equivalent to death and 1 is equivalent to perfect health.
We report the loss in QALDs since most of the illnesses associated with
Salmonella Enteritidis last days rather than years. The QALD values
listed for mild, moderate, and severe cases of SE infection were
estimated by Zorn and Klontz using data from Kaplan, Anderson, and
Ganiats (Ref. 81). This approach calculated that the acute effects of
food poisoning (vomiting, diarrhea, and general gastrointestinal
illness) lead to a loss of QALDs greater than 0.5 for each day of
illness. Furthermore, these lost QALDs persist for 2 to 16 days. Thus,
the total loss of QALDs from gastrointestinal illness is calculated to
be 1.05 to 9.99.
 
                     Table 3.--Lost Quality Adjusted Life Days Due to Salmonella Enteritidis
----------------------------------------------------------------------------------------------------------------
                                                           Disutility per Day (QALDs Lost)
                                                ---------------------------------------------------- Total QALDs
                    Severity                                                              Average      Lost per
                                                  Functional    Symptom       Total       Days Ill     Illness
----------------------------------------------------------------------------------------------------------------
Illness.........................................................................................................
----------------------------------------------------------------------------------------------------------------
  Mild.........................................         0.44         0.08         0.53            2         1.05
  Moderate.....................................         0.44         0.08         0.53            7         3.68
  Severe.......................................         0.53         0.09         0.62           16         9.99
----------------------------------------------------------------------------------------------------------------
Arthritis.......................................................................................................
----------------------------------------------------------------------------------------------------------------
  Short-term...................................           --           --         0.22           25         5.41
  Long-term....................................           --           --         0.14       18,250     2,613.12
----------------------------------------------------------------------------------------------------------------
 
    For arthritis, we used the regression of Cutler and Richardson
(Ref. 83) The regression approach yields estimates of losses per day of
0.22 for short-term arthritis and 0.14 for long-term arthritis. We
estimate that short-term arthritis results in a loss of 5.4 to 10.8
QALDs while long-term arthritis results in a loss of 2,613 to 5,223
QALDs.
    We do not present the estimated QALYs saved for each provision
considered in this analysis. Instead, we present benefits by provision
in an ``illnesses averted'' metric for each option and provision. This
practice allows us to calculate cost per illness averted by each
provision. In the summary we present the result of alternate valuation
methods that do and do not rely on QALY estimates. Since a large
portion of the loss due to chronic reactive arthritis is due to pain
and suffering not associated with direct medical expenditures, it is
difficult to capture the full economic loss due to SE related arthritis
without using QALYs or some other measure of morbidity effects.
Benefits estimates not relying on QALY estimates will necessarily be
significantly lower than estimates with QALYs. The results of all
methods of valuation are presented in section V.E of this document.
    iv. Valuation of SE illnesses. Table 4 of this document illustrates
how we calculate the dollar value of a typical case of SE under
different assumptions. The first column of table 4 of this document
lists the type of ailment. The second and third columns of table 4 of
this document are taken from tables 2 and 3 of this document. The
health loss per case is calculated by multiplying the value of a QALY,
scaled to the value of a single day, by the actual number of QALDs
lost, and then discounting where appropriate (only values of chronic
cases of reactive arthritis are affected by the discount rate). The
values in this column will vary depending upon the particular
assumptions about the value of a statistical life (VSL), QALY, and the
discount rate. The assumptions about the different values for these
parameters will be discussed in a following paragraph. The fifth column
of table 4 of this document shows the annual medical costs of each
condition that is caused by SE infection (long term reactive arthritis
is the only condition where the afflicted will incur medical costs for
more than a single year). The sixth column of table 4 of this document
shows the weighted dollar loss per outcome caused by SE. The
probability that a case of SE infection results in a given outcome
(column 2) is multiplied by the sum of the average health and medical
costs per case. These results will vary depending on the economic
assumptions. The weighted dollar values in column 6 are summed to
calculate the total expected loss associated with a typical case of SE.
We present the range of estimates of dollar losses per case in table 5
of this document.
 
[[Page 56856]]
 
 
 
                        Table 4.--Valuing of a Typical Case of Salmonella Enteritidis\1\
----------------------------------------------------------------------------------------------------------------
                                                    Total QALDs                      Medical
         Type and Severity               Case        Lost  per    Health Loss per   Costs per    Weighted Dollar
                                       Breakdown      Illness          Case            Case       Loss per Case
----------------------------------------------------------------------------------------------------------------
Illness.........................................................................................................
----------------------------------------------------------------------------------------------------------------
  Mild.............................       90.7%          1.05    $864                       $0  $784
  Moderate.........................        8.1%          3.68    $3,025                    $74  $250
  Severe...........................        1.2%          9.99    $8,208                 $8,500  $203
----------------------------------------------------------------------------------------------------------------
Arthritis.......................................................................................................
----------------------------------------------------------------------------------------------------------------
  Short-Term.......................        1.26%         5.41    $4,442                   $100  $57
  Long-Term........................        2.40%     2,613.12    $592,411                 $531  $14,244
----------------------------------------------------------------------------------------------------------------
Death..............................        0.04%    18,250.00    $5,000,000        ...........  $2,143
----------------------------------------------------------------------------------------------------------------
Total Expected Loss per Case..................................................................  $17,682
----------------------------------------------------------------------------------------------------------------
\1\ The value of a typical case will actually vary widely depending on assumptions about the VSL, QALY, and the
  discount rate. These figures are based on an assumption of VSL=$5 million, QALY=$300 thousand, and a discount
  rate of 7%.
\2\ ``Health Loss per Case'' and ``Weighted Dollar Loss per Case'' for ``Death'' are calculated using a VSL=$5
  million. If we use the QALD calculation, assuming the average victim of death due to SE loses 50 years of
  life, the Health Loss per Case is $4.14 million and the Weighted Dollar Loss per Case is $1,773.
 
    Cost of illness estimates usually include the medical costs
associated with SE. For example, Buzby et al. produced a summary of
medical and other costs for U.S. salmonellosis cases (Ref. 80).\9\ The
figures they estimated include the lost productivity of workers due to
salmonellosis. Because we estimate lost productivity separately, we
must net out these costs.
---------------------------------------------------------------------------
 
    \9\ As with the CDC data above, we assume that the
characteristics of SE-related illnesses are similar to those of
Salmonella in general.
---------------------------------------------------------------------------
 
    For mild SE illnesses, we assume that most persons will not obtain
medical services. The cost estimated for this category chiefly reflects
lost productivity (Ref. 80).
    For medical costs for those who contract moderate illnesses, we use
figures from Williams (Ref. 85) updated with medical cost indices (Ref.
86). In 1996, the average total cost of treatment for a nonurgent
medical problem, including physician's fees and medication, was $62. We
adjust these numbers to account for the increased cost of medical care
since 1996. The consumer price index (CPI) for medical services rose
from 227.8 in 1996 to 272.5 in June 2001.
    The data for the medical cost of a severe case of SE was obtained
from the Health Cost and Utilization Project's (HCUP) Nationwide
Inpatient Sample (NIS) (Ref. 87). Medical costs due to arthritis are
based on Zorn and Klontz (Ref. 81). Zorn and Klontz estimated that
short-term arthritis medical costs were approximately $100 per case. We
estimate that long-term reactive arthritis costs had a present value of
$5,370 in 1992.\10\ We use the CPI for medical care in general to
update this cost to current dollars. Between 1992 and June 2001, the
CPI for medical care rose from 190.1 to 272.5 (Ref. 86).
---------------------------------------------------------------------------
 
    \10\ This is based on the fact that in 1992 there were $64.8
billion in costs due to arthritis, 24 percent of these costs were
medical costs, and there were 40 million arthritis sufferers. This
yields $389 per arthritis sufferer in direct medical costs.
Discounted at 7 percent, the present value of medical expenditures
for 50 years with reactive arthritis is $5,370.
---------------------------------------------------------------------------
 
    FDA uses a range to estimate the value of an additional year of
life to reflect the uncertainty in the literature. As a lower bound,
FDA uses $100,000 per (quality-adjusted) statistical life year. Cutler
and Richardson (Ref. 83) use a similar estimate, and Garber and Phelps
(Ref. 88) conclude that estimates of the value of a life year are about
twice the level of income, though they present a broad range to reflect
uncertainty associated with risk aversion and discount rates. Updating
Garber and Phelps' estimates suggests that $100,000 per life year is a
reasonable estimate, given that median family income in 2002 was about
$51,000 (Ref. 89). Moreover, this estimate is close to the estimate
used in FDA's economic analysis of the regulations implementing the
Nutrition Labeling and Education Act of 1990. To reflect other
underlying literature, and following suggestions from other federal
agencies, we begin with an estimate of the VSL of $6.5 million. This
estimate is consistent with the survey by Aldy and Viscusi (Ref. 90) on
the premium for risk observed in labor markets. Annualizing this value
over 35 years at 3 percent and at 7 percent discount rates implies
estimates of a value of an additional year of life of about $300,000
and $500,000. Therefore, calculations for estimated benefits will
reflect three estimates of the value of a statistical life year (VSLY):
$100,000, $300,000 and $500,000, for both of the methods of estimating
gains in life years. Total benefits differ from mortality-related
benefits by including the value of reduced morbidity and health care
costs. Furthermore, FDA assumes values of a statistical life of $5
million and $6.5 million. This range of VSL estimates is consistent
with one reasonable interpretation of studies of willingness to pay to
reduce mortality risks. (Refs. 90 and 91) FDA uses the lower value to
reflect the fact that many of the estimates of willingness to pay to
reduce mortality risk from papers not surveyed by Aldy and Viscusi are
relatively low.
    In table 5 of this document, value of a typical case of SE under
different assumptions is shown.
 
[[Page 56857]]
 
 
 
                            Table 5.--Value of a Typical Case of Salmonella Enteritidis Under Different Economic Assumptions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Discount Rate=$3%                     Discount Rate=7%
                                                                             ---------------------------------------------------------------------------
                                                                              VSL\1\=$5 million   VSL=$6.5 million    VSL=$5 million    VSL=$6.5 million
--------------------------------------------------------------------------------------------------------------------------------------------------------
VSLY\2\=$0                                                                               $2,646             $3,289             $2,464             $3,107
--------------------------------------------------------------------------------------------------------------------------------------------------------
VSLY=$100 thousand                                                                      $11,885                 --             $7,602                 --
--------------------------------------------------------------------------------------------------------------------------------------------------------
VSLY=$300 thousand                                                                      $30,363            $31,006            $17,879            $18,522
--------------------------------------------------------------------------------------------------------------------------------------------------------
VSLY=$500 thousand                                                                           --            $49,484                 --            $28,799
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ VSL means value of a statistical life.
\2\ VSLY value of a statistical life year.
 
    The expected value of a typical case of SE varies greatly depending
on the assumptions. The values when the QALY is taken out of the
calculation are, as expected, the lowest, ranging from $2,464 per case
to $3,289 per case. These values do not account for pain and suffering,
which are a large part of the economic loss associated with chronic
arthritis. The highest expected value for a case of SE, $49,484, occurs
when we assume a VSL of $6.5 million, a QALY of $500 thousand, and a
discount rate of 3 percent. The average of all of the values is $17,254
per case. This most closely corresponds to the assumption set where VSL
= $5.0 million, QALY = $300 thousand, and the discount rate = 7
percent, which produces a value of $17,879 per case.
    d. Other benefits. Pathogens other than SE have been associated
with eggs. In particular, Campylobacter (Ref. 92) and non-SE Salmonella
(Ref. 14) have been found on the shells of eggs. The presence of
pathogens on the eggshell may be harmful to humans if one of two
scenarios occurs. First, under certain conditions, pathogens may
migrate through the shell of the egg to infect the egg's contents (Ref.
93). Second, eggshell contamination could result in the contamination
of egg contents if eggs are broken in such a way that the shell of the
egg comes into contact with the contents of the egg (Ref. 93).\11\
Current USDA washing and sanitizing standards are designed to reduce
pathogens on the exterior of the egg. Also, pathogen migration is
unlikely given current USDA standards and industry practices.\12\
Consequently, we do not expect benefits from the reduction of illnesses
due to pathogens other than SE to be large.
---------------------------------------------------------------------------
 
    \11\ The use of centrifuges would cause this to occur.
    \12\ Most modern egg washing machines are spray-washers (63 FR
27502 at 27505, May 19, 1998). Migration of SE through the eggshell
is more commonly associated with immersion washing (Ref. 94).
---------------------------------------------------------------------------
 
2. Measuring Costs
    The measurement of costs is relatively straightforward. We measure
costs based on the best available information from government,
industry, and academic sources. Furthermore, we assume that total costs
are typically the sum of the costs of individual provisions. What this
assumption means is that, unlike benefits, the cost of one provision is
generally independent of the cost of other provisions. Where economies
of scope with respect to SE mitigation exist, we adjust the costs
downward to account for the economies.\13\
---------------------------------------------------------------------------
 
    \13\ Where economies of scope with regards to SE mitigation
occur, we observe that the incremental cost of one provision
decreases with the implementation of another provision. For example,
if rodent control decreases the chance of SE detection through
environmental testing, we would expect the amount (and the cost) of
follow up egg testing to decline.
---------------------------------------------------------------------------
 
3. Coverage of the Analysis
    We estimate costs and benefits of potential prevention measures for
all farms that produce eggs for distribution in retail markets. Because
the proposed rule exempts very small farms (< 3,000 layers) from all
provisions, wherever the data permit we calculate costs and benefits
separately for both very small farms and for larger farms (>3,000 Layers).
The separation of costs and benefits by size of farm allows us
to estimate the total costs and benefits of the proposed rule, as well
as the total costs and benefits of regulatory alternatives that do not
necessarily exempt very small farms. In addition, calculating what the
proposed rule would cost very small farms allows us to measure the
regulatory relief provided by the exemption for very small farms.
Farmers who sell all of their eggs directly to consumers are exempt
from all provisions. Sales of eggs directly to consumers include sales
of a farmer's own eggs to neighbors, at farmers markets, and at
roadside stands. Farms that sell their eggs to another person for
distribution or resale are not assumed to be exempt from the listed
provisions. We do not anticipate any control measures for farms that
sell all of their eggs directly to consumers, so we exclude them from
the analysis.
    We estimate that approximately 4,100 farm sites with roughly 8,600
poultry houses may be covered by some or all parts of the proposed
rule. These figures are calculated as follows:
    <bullet> We used the NASS 1997 Census of Agriculture to determine
the number of farm sites with layers on hand. NASS estimated that there
are 69,761 farms with layers over 20 weeks old in their inventory (Ref.
22).
    <bullet> Next, we adjusted for the fact that a large portion of
farms with fewer than 3,000 layers either sell their eggs directly to
the consumer or do not sell their eggs at all. We estimated that, of
the approximately 64,800 farms with fewer than 3,000 layers,\14\ over
33,800 of these farms sell their eggs, but not directly to the
consumer.\15\
---------------------------------------------------------------------------
 
    \14\ The NASS Census of Agriculture uses farms with 3,200 birds
as its cutoff point for categorization. FDA uses 3,000 birds as its
cutoff point for small versus large farms, because this is the
measure that is used in other egg and poultry regulations. To adjust
the NASS data, FDA assumes that all flocks are uniformly distributed
across the 400 to 3,200 bird category. Using this assumption, 7.1
percent (200 / 2,800) of these farms fall in the over 3,000 bird
category while the remaining 92.9 percent fall in the small farm
category.
    \15\ Based on assumptions that the expert members of the egg
safety action group did not disagree with, we have calculated that
approximately 2,860 farms sell eggs via retail channels other than
farmers markets, roadside stands, and neighborhood sales (Refs. 95,
96, and 97). Many of the remaining 61,940 very small farms sell
their eggs to consumers indirectly at roadside stands or farmers
markets (Ref. 97). In the absence of better information, we assume
that half of those remaining 61,940 very small farms sell eggs
indirectly to consumers.
---------------------------------------------------------------------------
 
    <bullet> NASS data suggested that 82 percent of layers are table
egg layers (Ref. 98). For those farms with more than 3,000 layers, we
adjusted the estimated number of farms affected by the NASS estimate.
The resulting estimated number of farm sites is illustrated in the
first column of table 6 of this document.
    <bullet> The estimated number of houses per farm site is broken
down by size
 
[[Page 56858]]
 
category in table 6 of this document. We used data from the 1999 Table
Egg Layer Management in the U.S. Survey (Refs. 25 and 26) to estimate
the number of houses per farm site for those farms with more than 3,000
layers.\16\ For those farms with fewer than 3,000 layers, we assumed
that there is only one house per farm site.
---------------------------------------------------------------------------
 
    \16\ Data from the Layers study are used throughout this
document. We acquired the data either directly from the NAHMS Web
site or through direct correspondence with Lindsey Garber, Centers
for Epidemiology and Animal Health (CEAH), Veterinary Services (VS),
APHIS, USDA.
---------------------------------------------------------------------------
 
    <bullet> We calculate the total number of poultry houses that will
be affected by this rule by multiplying the adjusted number of farm
sites by the expected number of houses per farm site. As table 6 of
this document demonstrates, the majority of the houses are on farm
sites with fewer than 3,000 layers.
 
                                                Table 6.--Farms Potentially Covered by the Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Farm Size (No. of layers)                         Adjusted No. of Farm Sites   No. of Houses Per Site      Total No. of Houses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than 3,000                                                                              33,824                  1.0                          33,824
--------------------------------------------------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                                               2,337                  1.4                           3,155
--------------------------------------------------------------------------------------------------------------------------------------------------------
20,000 to 49,999                                                                                940                  1.4                           1,317
--------------------------------------------------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                                                359                  2.4                             861
--------------------------------------------------------------------------------------------------------------------------------------------------------
100,000 or more                                                                                 443                  7.4                           3,279
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Potential Coverage                                                                     37,903                  1.1                          42,435
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
D. Summary of Costs and Benefits of Regulatory Options and the Proposed
Rule
 
    In this section of this document, we summarize the costs and
benefits of the proposed rule and the regulatory options. In section
V.E of this document, we provide a detailed analysis of the costs and
benefits of all of the SE prevention measures we considered, both those
in and those not in the proposal.
    We considered a number of regulatory options that may be used to
prevent the problem of SE in eggs, including no new regulatory action,
classification of SE-positive eggs as restricted or SE-positive, HACCP,
the proposed rule, more extensive on-farm prevention measures, less
extensive on-farm prevention measures, and retail prevention measures.
1. No New Regulatory Action
    One possible alternative to the proposed rule is to rely on current
Federal, State, and industry efforts to control SE in shell eggs. These
efforts include relying on an FDA final rule for labeling and
refrigerating shell eggs, FDA educational programs, and the growth of
membership in State and industry quality assurance programs. We believe
these methods of control, while valuable, are unable to fully address
the problem of SE contamination of shell eggs.
    FDA issued a related rule designed to help prevent the growth of SE
in eggs by requiring refrigeration of shell eggs at retail and
requiring shell egg labeling (65 FR 76092, December 5, 2000). As part
of that rule, we set refrigeration temperatures to reduce the potential
growth of SE inside shell eggs at the retail level, and required safe
handling instructions on all cases and cartons of shell eggs. We expect
that the consumption of undercooked and raw eggs will decline as a
result of that rule. Nevertheless, labeling and refrigeration standards
do not prevent or limit the growth of SE while eggs are in production.
    FDA also is pursuing a program designed to inform consumers about
microbial hazards in egg preparation. The nationally distributed Fight
BAC! program targets children in schools and television audiences with
a more general food safety message that likely results in better egg
handling practices. Again, this program, while useful, does not prevent
the initial contamination of eggs with SE.
    Several of the large egg producing States and industry groups have
encouraged producers of eggs to follow on-farm practices aimed at
mitigating SE in their flocks. One of the first States to implement a
structured quality assurance program was Pennsylvania. Though
voluntary, the Pennsylvania Egg Quality Assurance Program has been
accompanied by a significant decrease in SE-related illnesses in those
areas where eggs from Pennsylvania are marketed. Industry groups also
have drawn up quality assurance plans as guidelines for their members
to follow. The voluntary programs have achieved some success in
reducing SE contamination in eggs, and the more comprehensive plans
contain many preventive measures similar to those in this proposed rule
(Ref. 99). These voluntary programs have now been in operation for many
years and are well-known throughout the industry. Although the State
and industry programs are potentially effective, many producers choose
not to participate. As data from CDC show, SE illnesses continue to be
associated with shell eggs even in those areas where voluntary programs
are in place. Option 1, relying on current Federal, State, and industry
efforts to control SE in shell eggs, will be used as a baseline for the
rest of the analysis.
2. Classification of SE-Positive Eggs as Restricted or SE Positive
    FDA considered the option of labeling eggs that are diverted to
breaker plants (called ``breakers'') from an SE-positive flock with a
label similar to the USDA ``restricted'' label or with a ``SE
positive'' label. The advantage of requiring a label would be that
high-risk eggs would be identified and could not be resold in the table
egg market.
    The economic loss associated with labeling eggs as either
``restricted'' or ``SE positive'' would be very high, as is illustrated
in table 7 of this document. It has been estimated that eggs labeled SE
positive will be discounted up to $0.08 per dozen at breaker plants.
The price received for restricted eggs at the breaker plant is
equivalent to the price received for checked eggs.\17\ Restricted eggs
generally command a price that is
 
[[Page 56859]]
 
$0.13 to $0.14 less per dozen than do nest run eggs.
---------------------------------------------------------------------------
 
    \17\ Checked eggs are eggs with minute fissures in their
eggshells. These eggs generally command less of a price in the
breaker market because they are more likely to break in transit and
are more susceptible to contamination.
---------------------------------------------------------------------------
 
    We believe that the pasteurization process used at breaker plants
is sufficient to largely eliminate any threat from SE-positive eggs. As
long as eggs sent to the breaker plant are subjected to pasteurization,
the benefits from requiring eggs from an SE-positive flock to be
labeled are insignificant. We rejected the option of labeling eggs from
an SE-positive flock because the public health benefits of labeling
these eggs likely would be small and the cost of doing so would be very
high.
 
                                             Table 7.--Egg Prices\1\
                                             (Price per Dozen Eggs)
----------------------------------------------------------------------------------------------------------------
                                                                Breaking Eggs              Cost of Diversion
                                 Regional    Shell Egg  --------------------------------------------------------
            Region             Weight  (in    Price to                  Checks And                   Checks and
                                    %)        Producer     Nest Run   Undergrades\2\    Nest Run    Undergrades
----------------------------------------------------------------------------------------------------------------
North Atlantic                      17.0         $0.42        $0.31          $0.17         $0.11         $0.26
----------------------------------------------------------------------------------------------------------------
North Central                       68.4         $0.39        $0.30          $0.17         $0.09         $0.22
----------------------------------------------------------------------------------------------------------------
South Atlantic                       4.3         $0.43        $0.31          $0.17         $0.12         $0.26
----------------------------------------------------------------------------------------------------------------
South Central                        5.1         $0.47        $0.30          $0.17         $0.17         $0.30
----------------------------------------------------------------------------------------------------------------
West                                 5.2         $0.55        $0.31          $0.17         $0.25         $0.39
----------------------------------------------------------------------------------------------------------------
Average Cost of Diverting Eggs\3\                                                          $0.13         $0.24
-------------------------------------------------------------------------------------
Additional Discount for SE+ Eggs\4\ $0.00 to 0.08                                                        $0.00
--------------------------------------------------------------------------------------------------
Total Cost of Diverting Eggs $0.13 to 0.21                                                               $0.24
----------------------------------------------------------------------------------------------------------------
\1\ See section V.F.2 of this document for a full description of the derivation of this table.
\2\ Data on the price received for checks and undergrades is from the Poultry Yearbook (Ref. 100).
\3\ The average cost of diverting eggs is weighted by regional production (Ref. 98).
\4\ SE-positive eggs are intrinsically less valuable than other eggs because they are limited in how they may be
  used.
 
3. HACCP
    We could require that a HACCP system be implemented on layer farms.
Although the general sanitation and hazard control measures in the
proposed rule contain some HACCP-like features, the agency has not
defined and is not ready to mandate HACCP on farms. HACCP requires the
science-driven identification of critical control points throughout
production. The technological knowledge needed to identify critical
control points for eliminating SE from shell eggs, however, is
incomplete. In addition, HACCP is most appropriate in situations where
there are many chemical, physical, and microbiological hazards to
control. In this proposal, we are concentrating only on the
microbiological hazard of transovarian SE, a subset of the hazards that
might be covered under HACCP.
4. The Proposed Rule
    The proposed rule (as described in the previous paragraph) includes
the following requirements for farms with more than 3000 layers that do
not have all of their eggs treated or sell all of their eggs directly
to consumers: Rodent and pest control, biosecurity, cleaning and
disinfecting, use of SE-monitored chicks and pullets, testing and
diversion, records of testing and diversion, and refrigeration.
    The benefits from the SE prevention measures in the proposed rule
would take time to be fully realized, but the costs would be more
immediately incurred. Table 8 of this document shows the initial costs
and illnesses averted and the eventual costs and illnesses averted of
the proposed rule.\18\ Following are the detailed calculations
underlying table 8 of this document, in section V.E of this document.
---------------------------------------------------------------------------
 
    \18\ The interest rate is used here to annualize the costs of
refrigeration equipment, plan designs, and training. For simplicity,
subsequent summary tables will only include figures reflecting the
interest rate of 7 percent. Those interested in the total cost
number reflecting a 3-percent interest rate should subtract roughly
$5 million from the calculations performed with a 7-percent interest
rate. The exact difference is shown in section E.1.i of this
document, describing the costs and benefits of the refrigeration
option, and section E.2, describing the costs of administrative
measures.
 
                        Table 8.--Annual Costs and Illnesses Averted of the Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                                                                Cost per Illness
                                                               Costs        Illnesses Averted       Averted
----------------------------------------------------------------------------------------------------------------
Initially.......................................................................................................
----------------------------------------------------------------------------------------------------------------
  Interest Rate = 7%...................................        $84,000,000             22,132             $3,795
  Interest Rate = 3%...................................        $79,000,000             22,132             $3,569
----------------------------------------------------------------------------------------------------------------
Eventually......................................................................................................
----------------------------------------------------------------------------------------------------------------
  Interest Rate = 7%...................................        $82,000,000             33,452             $2,451
  Interest Rate = 3%...................................        $77,000,000             33,452             $2,302
----------------------------------------------------------------------------------------------------------------
 
 
[[Page 56860]]
 
5. More Extensive On-Farm SE Prevention Measures
    FDA could issue a proposed rule that provides the following
information: (1) Does not exempt farms with fewer than 3,000 layers
from any provisions and (2) includes more on-farm provisions than those
in the proposed rule. Additional on-farm provisions include requiring
training, the use of SE-negative feed, and vaccinating flocks against
SE. We could also require record keeping for all provisions, rather
than only for sampling, testing, and diversion.
    The option of more extensive controls leads to total eventual costs
of $243 million and eventual expected number of illnesses averted of
33,604 (the cost-effectiveness of each additional provision is
calculated separately and presented in table 33 of this document and in
the analysis of on-farm prevention measures in section V.E of this
document). This approach increases costs by over $160 million, while
only increasing the number of illnesses averted by about 150 cases, for
a marginal cost-effectiveness of more than $1 million per additional
illness averted. The main reason for the small increase in benefits
relative to costs is that much of the increase in costs comes from
adding farms with fewer than 3,000 layers. The large number of such
farms (over 33,000, as shown in table 5 of this document) means that
requiring them to comply with all provisions of the proposed rule would
greatly increase costs. These farms, however, account for less than 1
percent of egg production, so requiring them to comply with all of the
SE prevention measures would have a small effect on the volume of shell
eggs that could be contaminated with SE. In addition, including these
very small farms likely would result in the cessation of egg production
at a large number of farms. For these reasons, FDA has decided not to
pursue this option.
6. Less Extensive On-Farm SE Prevention Measures
    We could also require fewer controls than the proposed rule.
Several provisions could be combined to provide a less extensive set of
controls than in the proposed rule. Many of the prevention measures
could be put forth as stand-alone regulations. We have not presented
each of these prevention measures as a separate option, but the reader
can see the individual effects of the various on-farm prevention
measures in table 28 (see section V.E of this document). As documented
in table 28 of this document, the various individual measures would, by
themselves, generate lower net benefits than the integrated program
outlined in the proposed rule.
7. Retail SE Prevention Measures
    FDA examined the possibility of including a retail component in the
proposed rule. In particular, we have qualitatively examined the costs
and benefits of applying certain SE prevention measures to
establishments that specifically serve highly susceptible populations.
Those measures include using only eggs that are clean, sound, contain
no more restricted eggs than the proportion allowed in U.S. Consumer
Grade B, and have been transported at an ambient temperature of 45
[deg]F or below. Other measures that could apply to establishments
serving highly susceptible populations, but for which we lack data,
include thoroughly cooking raw eggs and raw egg-containing foods, and
substituting pasteurized eggs or egg products for raw eggs in the
preparation of foods where eggs are combined or served undercooked.
    At present, we do not have adequate information to accurately
estimate the total costs and benefits of all the retail measures.
Nevertheless, we have estimated that more than 130,000 retail
establishments would be affected by the retail provisions we examined.
We ask for comment regarding the costs and benefits of retail
prevention measures.
 
E. Benefits and Costs of Potential SE Prevention Measures: Detailed
Analysis
 
    In this section, we describe the SE prevention measures we
considered, including provisions that were not included as proposed
requirements or that were only required for certain producers in the
proposed rule. For example, we calculated costs and benefits for SE
prevention measures, such as rodent control and biosecurity, for
producers with fewer than 3,000 layers, but these measures would not be
required of such producers in the proposed rule. In addition, FDA
looked at a number of administrative requirements designed to support
the direct SE prevention measures. Finally, we calculated the total
costs and benefits for the provisions in the proposed rule.
    We examined a number of on-farm measures, which includes the
following measures:
    <bullet> Rodent and pest control,
    <bullet> Biosecurity measures,
    <bullet> Cleaning and disinfecting of layer houses between flocks,
    <bullet> The use of SE monitored chicks or pullets,
    <bullet> The use of SE negative feed,
    <bullet> Vaccinating flocks against SE,
    <bullet> Refrigeration of eggs,
    <bullet> Layer house environmental testing,
    <bullet> Followup egg testing, and
    <bullet> The diversion of SE positive eggs.
    For each of the on-farm measures previously discussed, we estimated
the costs of the following administrative measures: registration,
training, plan design, and recordkeeping.
    Finally, FDA considered retail provisions to help prevent illness
from SE positive eggs. The retail provisions would cover retail
establishments that specifically serve highly susceptible populations.
1. On-Farm SE Prevention Measures
    a. Interdependence of on-farm measures. Rodent control, pest
control, biosecurity and cleaning and disinfecting all have a role in
eliminating SE in the poultry house. Although the actions taken under
each heading may be distinct, the effects of each action are related.
For example, a biosecurity plan may include provisions to limit
standing water and high grass in areas adjacent to the poultry house.
Although categorized as biosecurity measures, these practices also help
control both rodents and pests. Similarly, cleaning and disinfecting
removes not only SE, but also rodents and pests.
    This interdependence means that the efficacy of on-farm controls
cannot be determined by adding the effects of each provision (as
determined by studies that focus on each provision separately). The
measurement difficulty arises for two reasons. First, as mentioned
earlier, when two practices substitute or complement one another, the
efficacy of the first practice is affected by the introduction of a
second. Second, a simple comparison of farms that use a given practice
with farms that do not use that practice is insufficient in measuring
the effectiveness of the practice in question. The use of one good
practice tends to be positively correlated with the use of other good
practices and therefore a simple comparison between farms will
overstate the effectiveness of the practice. For example, those houses
that use the best rodent control practices are also likely to be using
other SE controls as well, so a measure of rodent control effectiveness
is likely to pick up the effects of good biosecurity, pest control, and
cleaning and disinfecting practices. On the other hand, a simple farm
to farm comparison of practices that are correlated with prevalence may
understate the effectiveness of the practice. For example, a group of
farms may have practices in place because
 
[[Page 56861]]
 
they are part of a voluntary SE plan, which in turn may have been put
in place in areas with higher than average prevalence. In this case the
practices would appear to be correlated with higher than average
prevalence.
    b. Organization of economic analysis of potential provisions. FDA
has considered a number of on-farm SE prevention measures. The
provisions that we considered are examined below. We have included
some, but not all, of these provisions in the proposed rule. The costs
and benefits of the provisions included in the proposed rule are
summarized in table 35 in section V.F of this document.
    c. Control of rodents and other pests. i. Rodent and pest control
provisions. One potential rodent and pest control provision is a
requirement that each layer house be under a rodent and pest control
program. Such a program could include the use of traps or poisons to
reduce rodents and other pests. A provision also might require that
each farm have a written rodent and pest control plan and that rodent
and pest control records be kept to verify that the program is
accomplishing its goals.
    ii. Current industry practices--rodent and pest control. Most farms
currently address rodent and pest control problems to some extent.
However, if SE-positive eggs are required to be diverted, there will be
a financial incentive to find ways to prevent SE in poultry houses. As
a result, the effectiveness of rodent and pest control in eliminating
SE in the poultry house will lead many farms to institute rodent and
pest control programs that are more stringent than those currently in
place.
    Currently, 99.2 percent of all commercial farms with more than
30,000 layers use some form of rodent control, but not all methods of
rodent control are compatible with the goal of eliminating SE in
poultry houses. In particular, we believe that biological predators
such as cats should not be used as a method of rodent control because
cats can be vectors for SE contamination.
    Table 9 of this document illustrates, by farm size, the number of
programs of rodent control that would satisfy the provisions in the
proposed rule. Farms that do not use rodent controls as specified in
this provision (e.g., many farms primarily use cats as a rodent control
measure) are counted as having unacceptable rodent control programs.
Based on data from the Layers study (Refs. 25 and 26), we estimate that
the number of farms with inadequate rodent control programs will range
from 1.8 percent for farms with over 100,000 layers to 21.0 percent for
farms with 20,000 to 49,999 layers.\19\ Furthermore, we believe that
the potential costs of diversion of SE-positive eggs will encourage
farmers currently using a level of rodent control that would satisfy
the proposed provision to increase their rodent control efforts.\20\
Without better information about the number of farms that would
increase rodent control efforts, we assume the true number will lie
between 0 percent and 100 percent of those currently using an
acceptable level of rodent control.
---------------------------------------------------------------------------
 
    \19\ Our primary source for on-farm practices related to SE
prevention measures is the Layers study (Refs. 25 and 26). As the
only major current survey of the industry, this study has provided
us with data that has allowed us to characterize the industry. The
study, however, does not fully represent the industry. A total of
526 farm sites responded to the first part of the survey and 252
responded to the second part of the survey. Furthermore, only
operations with more than 30,000 layers were included in the survey.
Consequently, we had to approximate the practices of smaller farms
based on a limited amount of information. Nonetheless, the Layers
study has added greatly to our understanding of the industry and its
practices.
    \20\ This conclusion assumes that there will also be a testing
and diversion component to the proposed rule. If the proposed rule
does not include a testing and diversion component, it is unlikely
that farms with an acceptable testing and diversion program would
increase rodent control efforts beyond what is required, because the
incentive to avoid diversion would not be present.
 
                                                                Table 9.--Rodent Control
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Unacceptable Rodent          No. of Farms With          No. of Farms Increasing
                     Farm Size (No. of layers)                           Control (in %)        Unacceptable Rodent Control             effort
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than 3,000                                                                    50.0%                            16,912                         8,456
--------------------------------------------------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                                    18.8%                               439                           949
--------------------------------------------------------------------------------------------------------------------------------------------------------
20,000 to 49,999                                                                   21.0%                               197                           371
--------------------------------------------------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                                    3.8%                                14                           172
--------------------------------------------------------------------------------------------------------------------------------------------------------
100,000 or more                                                                     1.8%                                 8                           218
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Farms                                                           ........................                        17,570                        10,166
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
    We assume that between 25 percent and 75 percent of very small
farms (those with fewer than 3,000 layers) are using an acceptable
level of rodent control.
    Pests, other than rodents, commonly found in poultry houses include
flies, mites, beetles, and ants (Ref. 101). For the purposes of this
provision, however, we chiefly are interested in the presence of flies
and fly control because they have been implicated in the transmission
of Salmonella (Ref. 102).
    The survey used to develop the Layers study asked questions about
on-farm fly control practices (Refs. 25 and 26). Using these data, we
estimate that over 90 percent of those farms with over 3,000 layers use
some form of fly control. Some of these methods, however, should not be
used. In particular, we do not suggest the use of biological predators,
such as wild birds, for fly control since these predators may
themselves be vectors for SE transmission (Ref. 102).
 
[[Page 56862]]
 
 
 
                                                                 Table 10.--Fly Control
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Unacceptable Fly            No. of Farms With          No. of Farms Increasing
                     Farm Size (No. of layers)                           Control (in %)         Unacceptable Fly Control               effort
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than 3,000                                                                    50.0%                            16,912                         8,456
--------------------------------------------------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                                    26.9%                               629                           854
--------------------------------------------------------------------------------------------------------------------------------------------------------
20,000 to 49,999                                                                   17.5%                               165                           388
--------------------------------------------------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                                   11.8%                                42                           158
--------------------------------------------------------------------------------------------------------------------------------------------------------
100,000 or more                                                                    21.7%                                96                           173
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Farms                                                           ........................                        17,844                        10,030
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
    Table 10 of this document shows the number of farms with
unacceptable (not sufficient to satisfy the proposed rule) programs of
fly control. We assume that farms that do not use fly control or that
use biological predators, such as birds, as their primary method of fly
control are not using acceptable methods. We estimate that a total of
17,844 farms are using unacceptable methods of fly control.
    The actual number of farms that are using unacceptable methods of
fly control is likely to be higher than the estimates in table 12 of
this document would suggest. The mere fact that a particular method is
used does not automatically guarantee that it is used at its optimal
level. As with rodent control, even farmers in compliance with the
proposed provision would be likely to increase their use of fly
controls. We assume that between 0 and 100 percent of farms using
acceptable fly control methods will increase their fly control efforts.
Consequently, an additional 10,030 farms will increase their fly
control efforts.
    iii. Costs of rodent and pest control.\21\ We estimate the cost of
rodent and pest control to farms in table 11 of this document. We
assume that a farm with an adequate rodent and pest control program
will be using a number of control measures.
---------------------------------------------------------------------------
 
    \21\ All cost estimates in this section are from data supplied
to the FDA through a contract with Research Triangle Institute.
Derivations of estimates are described more fully in a memorandum to
the record (Ref. 103).
---------------------------------------------------------------------------
 
    Included in the cost of rodent control are the cost of setting up
and maintaining bait stations and the cost of rodent indexing. The
annual cost of rodent control ranges from $30 for the average farm with
less than 3,000 layers to $4,970 for the typical farm with over 100,000
layers. The costs of limiting rodents' access to feed and patching
holes in the walls of poultry houses are not included in our estimates.
    Pest control measures include the cost of sprays, baits, fly
monitoring, and manure pit fans. We expect the annual cost of pest
control to range from $110 for farms with less than 3,000 layers to
$63,500 for farms with more than 100,000 layers.
 
                                   Table 11.--Cost of Rodent and Pest Control
                                                 (In Thousands)
----------------------------------------------------------------------------------------------------------------
                                    Rodent Control                         Pest Control
  Farm Size (number of  ----------------------------------------------------------------------------
        layers)             Unacceptable                          Unacceptable                          Total
                              Controls      Increased  Effort       Controls      Increased  Effort
----------------------------------------------------------------------------------------------------------------
Less than 3,000                       $501               $125             $1,905               $476       $3,008
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999                       $241               $260             $2,355             $1,600       $4,456
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999                      $133               $125             $1,125             $1,326       $2,709
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                       $15                $93               $544             $1,016      $1,667,
----------------------------------------------------------------------------------------------------------------
100,000 or more                        $40               $541             $6,102             $5,507      $12,187
----------------------------------------------------------------------------------------------------------------
All Farms                             $929             $1,144            $12,031             $9,922      $24,027
----------------------------------------------------------------------------------------------------------------
 
    The total cost of rodent and pest control, as expressed in table 11
of this document, is found by multiplying the cost per farm by the
number of farms affected, as illustrated in tables 9 and 10 of this
document. For those farms that are already using acceptable rodent and
pest control methods, but that will increase their rodent and pest
control efforts, we estimate that the cost of rodent and pest control
will be approximately half of the cost of farms with unacceptable
controls. This provision would result in costs of $3.0 million for
farms with less than 3,000 layers and costs of $21.0 million for farms
with over 3,000 layers.
    iv. Benefits of rodent control. Rodent control appears to be
effective in controlling SE. As a critical vector, rodents may spread
SE throughout a given poultry house and between houses. Rodents spread
the disease through their droppings, which often are consumed by
layers. In this section of this document, we merge
 
[[Page 56863]]
 
epidemiological data with estimates of the current level of rodent
infestation on farms to assess the benefits from increased rodent
control.
    We used the Layers study (Refs. 25 and 26) to determine the
magnitude of the rodent problem on farms. The first four rows of table
12 of this document show the percentages of farms in four size
categories with four severities of mouse or rat infestation.\22\ Table
12 shows that larger farms are generally more likely to experience
moderate or severe rodent problems. The greater prevalence in the
larger houses means that, while only 17 percent of houses have moderate
or severe rodent problems, 33 percent of all layers are currently in
houses with moderate or severe problems.\23\
---------------------------------------------------------------------------
 
    \22\ Severity level is self-assessed by respondents to the
survey.
    \23\ To determine the percent of houses affected, the percent of
farms with a given rodent problem was weighted using the number of
houses in each size category. The number of birds affected was
determined by weighting the percent of farms with a given rodent
problem in each size category by the number of birds in each size
category.
 
                                      Table 12.--Severity of Rodent Problem
----------------------------------------------------------------------------------------------------------------
                                                                 Severity in %
                                             ----------------------------------------------------  No. of Houses
                                                 Severe      Moderate      Slight        None       in Category
----------------------------------------------------------------------------------------------------------------
Farm Size (No. of Layers)
----------------------------------------------------------------------------------------------------------------
  < 20,000                                           0.0         14.8         81.7          3.5            36,979
----------------------------------------------------------------------------------------------------------------
  20,000 to 49,999                                  9.1         13.2         70.1          7.6             1,317
----------------------------------------------------------------------------------------------------------------
  50,000 to 99,999                                  1.2         28.4         52.3         18.1               861
----------------------------------------------------------------------------------------------------------------
  100,000 or more                                   1.5         32.1         60.1          6.3             3,279
----------------------------------------------------------------------------------------------------------------
Percent of Houses Affected                          0.5         16.9         78.7          3.8    ..............
----------------------------------------------------------------------------------------------------------------
Percent of Layers Affected                          2.9         31.4         60.2          5.5    ..............
----------------------------------------------------------------------------------------------------------------
Risk Ratio                                          4.2          3.1          2.1          1.0             Total
----------------------------------------------------------------------------------------------------------------
Percent of Layers in Houses with Positive          19.2         14.3          9.5          4.6                11
 Environments
----------------------------------------------------------------------------------------------------------------
Maximum Expected SE Reduction from Increased       38.1         34.0         25.8          0.0              27.3
 Rodent Control\1\
----------------------------------------------------------------------------------------------------------------
\1\ These values are calculated using the following equations:
Severe: [( 19.2 - 4.6) / 2] / 19.2 = 38.1%.
Moderate: [( 14.3 - 4.6) / 2] / 14.3 = 34.0%.
Slight: [( 9.5 - 4.6) / 2] / 9.5 = 25.8%.
None: [( 4.6 - 4.6) / 2] / 4.6 = 0.0%.
 
    Henzler examined the link between rodents and SE, and found that
environmental tests of manure in houses with large rodent populations
were 4.2 times more likely to be positive for SE than similar tests in
houses with small rodent populations.\24\ We assume that the risk ratio
for SE can be linearly extrapolated between 1 for those farms with no
rodent problem and 4.2 for those farms with a severe rodent control
problem. This extrapolation is presented in table 11 of this document
along with the estimated level of rodent infestation for farms of
different sizes.
---------------------------------------------------------------------------
 
    \24\ A total of 84 flocks were examined in Pennsylvania (Ref.
48).
---------------------------------------------------------------------------
 
    The third section of the Layers 99 study (Ref. 27)\25\ supports the
Henzler study. The Layers study finds that farms with a rodent index of
at least 20 mice have an SE prevalence rate of 10.1 percent, while
farms with a rodent index of less than 20 mice have a prevalence of SE
of only 2.0 percent.\26\ This difference is statistically significant.
---------------------------------------------------------------------------
 
    \25\ The third part of the Layers study (Ref. 27) provides
estimates for the prevalence of SE on 200 farm sites with different
management practices. For many of the variables analyzed, however,
the sample size was too small for statistically significant
differences to be measured.
    \26\ The standardized rodent index is calculated as (number of
rodents trapped) x (7 / number of days) x (12 / number of functional
traps).
    The index standardizes the number of rodents trapped to the
equivalent of having 12 traps function for 7 days (Ref. 27).
---------------------------------------------------------------------------
 
    Using data from the Henzler study, we estimated the base level of
environmental SE prevalence for houses without rodent problems to be
4.6 percent when the overall prevalence of SE-positive houses is 11
percent. We calculated the base as Base = Overall /
[(preventionSEV x BirdsSEV) +
(preventionMOD x BirdsMOD) +
(preventionSLT x BirdsSLT) +
(preventionNON x BirdsNON)]; where Base is the
base level of prevalence for a rodent free house; ``Overall'' is the
total prevalence for all houses; ``prevention'' is the risk ratio for
each level of rodent infestation; and ``Birds'' is the percentage of
layers in houses with a given rodent problem. The subscripts SEV, MOD,
SLT, and NON refer to the cases of severe, moderate, slight, and no
rodent problems. The percentage of layers in houses with environments
positive for SE is found by multiplying the SE risk ratio times the
base level of risk. Again, houses with severe rodent control problems
are 4.2 times more likely to be positive for SE than houses with no
problems (19.2 percent versus 4.6 percent).
    In the last row of table 12 of this document, we estimate the
expected reduction in SE due to increased rodent control. If rodent
control were wholly effective, we would assume that it would result in
a drop in SE from current levels to 4.6 percent, the level associated
with no rodent problem. For a severe rodent infestation, rodent control
would therefore result in a 76.2 percent decline in SE, but such a
large decline is not likely for most farms. Those farms with a rodent
control problem probably have a problem partly because of factors not
experienced by those farms without a problem. House design (open walls,
dirt floors, and other
 
[[Page 56864]]
 
features), unfavorable location (near other rodent-infested entities,
climate, and so on), and lack of knowledge regarding proper rodent
control techniques are likely to diminish the effectiveness of rodent
control. Consequently, we assume that the effectiveness of rodent
control for a particular farm will be uniformly distributed between no
reduction and reduction to an SE risk of 4.6 percent. Overall, this
leads to an estimated average 27.3 percent reduction in SE, as shown in
table 12 of this document.
    Based on information from the egg industry, we believe that rodent
control may take up to 4 years to be fully effective. During the 4-year
transition period, we assume that the effectiveness of rodent control
will average 13.7 percent, half of the eventual effectiveness.
    We use the base line number of SE cases due to eggs and the value
of a typical case of salmonellosis to estimate the value of rodent and
pest control benefits. For farms with fewer than 3,000 layers a rodent
and pest control program would result in benefits of 71 illnesses
averted initially and 142 cases averted eventually at a cost of $58,450
per case averted. For farms with more than 3,000 laying hens, the
benefit from rodent and pest control increases from an expected 12,853
illnesses averted initially to 25,701 illnesses averted eventually at a
cost of $1,390 per illness averted.
    The narrow definition of rodent control is limited to direct
methods of catching, killing, and blocking rodents from entering a
poultry house. Measures such as pest control, biosecurity, and cleaning
and disinfecting also affect rodent control. Cleaning and disinfecting
a house, when done properly, removes rodents and their nests from an
infested house. Similarly, biosecurity makes rodent penetration of a
house more difficult. As a result, the benefits estimated for rodent
control are partly due to the adoption of other measures that may be
required. We therefore believe that the expected effect of rodent
control by itself (assuming no other control measures) would be smaller
than our estimates suggest.
    v. Benefits of pest control. Pests other than rodents also have
been shown to be vectors in the spread of SE. In particular, Davies and
Wray showed that the ingestion of SE-contaminated maggots by a chicken
protects Salmonella from the stomach acids of the chicken and aids in
the establishment of SE in the chicken's gut (Ref. 102).\27\ Beetles
and wild birds have also been implicated in the transmission of SE
(Ref. 102). Wild birds currently have access to layer feed troughs on
23.5 percent and flies on 91.3 percent of farms (Refs. 25 and 26).
---------------------------------------------------------------------------
 
    \27\ See also Olsen (2000) (Ref. 49).
---------------------------------------------------------------------------
 
    Despite the high prevalence of pests other than rodents on farms,
most farms do attempt to limit their presence. Approximately 82 percent
of farms currently use fly control methods other than the use of
biological predators (Refs. 25 and 26).\28\ As with rodents, the
effectiveness of fly control is limited by the characteristics of the
farm. Farms that operate in damp climates and that are not able to seal
their facilities against pests (many houses have dirt floors and open
walls) are likely to have more difficulty reducing infestation of all
pests.
---------------------------------------------------------------------------
 
    \28\ Use of biological predators is not seen as an effective
pest control technique because the predators may themselves become a
vector for SE transmission.
---------------------------------------------------------------------------
 
    The third section of the Layers study (Ref. 27) illustrates the
effect of pest control. On those farms in which pests have access to
feed storage sites, the prevalence of SE is estimated to be 9.6
percent. For farms on which pests do not have access to feed in
storage, the prevalence of SE is only 5.8 percent.
    vi. Other benefits of rodent and pest control. The rodent control
provisions are expected to decrease the rodent population in poultry
houses. Since rodents consume large amounts of feed, this reduction
will benefit producers by lowering their feed costs.
    The Cooperative Extension Service of Oklahoma State University
estimates that each rat in a poultry house consumes $2.18 worth of feed
annually (Ref. 104). Since mice eat 5 to 10 percent as much as rats
(Ref. 101), the expected annual loss of feed for each mouse in a house
is estimated to cost $0.11 to $0.22.
    The upper bound of the savings from increased rodent control due to
this provision is the cost of implementing the rodent control measures.
In the absence of mandated rodent control, an informed producer will
use a level of control that maximizes profits. Any increased rodent
control that leads to feed savings in excess of the cost of the control
program already will have been implemented before the implementation of
a quality assurance program.
    We estimate that an infested house may have over 1,000 mice (Ref.
48). This infestation will cost a farmer approximately $165 for that
house (1,000 ' $.165). A house infested with rats may have as many as
700 rats (Ref. 105). In this case, the infestation costs the farmer
$1,526 (700 ' $2.18).
 
                                   Table 13.--Feed Savings from Rodent Control
----------------------------------------------------------------------------------------------------------------
                                  Rodents in a    Feed Savings     % of         Houses in      Cost to Houses in
            Problem                   House        Per House     Houses\1\  Classification\2\    Classification
----------------------------------------------------------------------------------------------------------------
Mice
----------------------------------------------------------------------------------------------------------------
  Severe                                  1,000        $165.00        2.4                114             $18,800
----------------------------------------------------------------------------------------------------------------
  Moderate                                  500         $82.50       25.5              1,212            $100,000
----------------------------------------------------------------------------------------------------------------
  Slight                                    250         $41.25       62.4              2,966            $122,300
----------------------------------------------------------------------------------------------------------------
  None                                        0          $0           9.7                461                  $0
 
----------------------------------------------------------------------------------------------------------------
Rats
----------------------------------------------------------------------------------------------------------------
  Severe                                    700      $1,526.00        1.6                 76            $116,000
----------------------------------------------------------------------------------------------------------------
  Moderate                                  350        $763.00        6.9                328            $250,200
----------------------------------------------------------------------------------------------------------------
  Slight                                    175        $381.50       43.7              2,077            $792,300
----------------------------------------------------------------------------------------------------------------
 
[[Page 56865]]
 
 
  None                                        0          $0          47.8              2,272                  $0
----------------------------------------------------------------------------------------------------------------
Total Cost of Rodents                                                                                 $1,399,700
----------------------------------------------------------------------------------------------
Expected Savings from Control (Assumes 50% reduction)                                                   $699,850
----------------------------------------------------------------------------------------------------------------
\1\ The percentages are from the Layers study (Refs. 25 and 26).
\2\ Because rodent populations are estimated for large houses only (over 54,000 layers), we estimate the number
  of houses to be the number of large house equivalents. This implies that two 27,000-bird houses are counted as
  one house in this analysis.
 
    The total feed savings from rodent control are illustrated in table
13 of this document. If rodent control leads to just half of all
rodents being eliminated, the savings in lost feed from rodent control
are estimated to be almost $700,000 annually.
    d. Biosecurity. i. Biosecurity provisions. We have examined the
effects of several potential biosecurity provisions. These include the
following effects: (1) Limiting visitor access; (2) avoiding the
movement of contaminated equipment between poultry houses; (3) ensuring
that employees are hygienic; (4) keeping stray poultry, birds, and
other animals away from the layer houses; and (5) prohibiting employees
from keeping poultry at home.
    The first biosecurity measure we examine is the limitation of
visitors' access on poultry farms. Limiting a visitor's access may
include prohibiting a visitor from entering a house on one farm if that
person has already entered a house on another farm. Also, visitors may
be banned from entering poultry houses altogether.
    Contaminated equipment can also spread SE on a farm. One way to
mitigate this problem is to ensure that equipment that is used in
multiple houses (such as forklifts and manure removing equipment) is
kept clean.
    The hygiene of persons moving between houses affects the likelihood
of cross-contamination. To protect against cross-contamination, farms
may require that employees and visitors use footbaths, change their
clothing, or use protective clothing when on the farm. Farms also may
choose to require that their employees work on only one farm site on a
given day.
    Stray poultry, birds, and other animals must also be kept away from
the farm's grounds and facilities. This may be done keeping grass and
weeds cut, minimizing the existence of standing pools of water near the
house, and fencing off the farm site.
    Finally, biosecurity precludes employees of the farm from keeping
poultry at home.
    ii. Current industry practices; biosecurity. Most farms already
practice some form of biosecurity.\29\ According to the Layers study,
68.1 percent of farms do not allow non-business visitors and 22.1
percent do not allow business visitors into layer houses. Of those that
do allow visitors to enter, 65.6 percent have biosecurity rules for
non-business visitors and 69.5 percent have biosecurity rules for
business visitors.
---------------------------------------------------------------------------
 
    \29\ All data in this section are from the Layers study (Refs.
25 and 26).
---------------------------------------------------------------------------
 
    Farms use different methods to keep employee, contract crew, and
visitor hygiene at an acceptable level. The Layers study estimates that
24.5 to 24.6 percent use footbaths, 3.9 to 4.8 percent require showers
to be taken, and 17.6 to 32.0 percent require persons to change clothes
or wear coveralls.
    Many farms use biosecurity measures aimed at keeping stray poultry,
birds, and other animals away from the layer houses. While data on the
number of farms that trim grass and discourage standing pools of water
are not available, the Layers study did estimate that fencing is
currently used at 26.7 percent of farms.
    Finally, 75.7 percent of farms do not allow employees to keep their
own layers at home.
    iii. Costs of biosecurity. It is difficult to quantify many of the
costs of biosecurity. This is especially true because the biosecurity
measures may be implemented in different ways, allowing each farm to
adapt the measures to their operation, as appropriate. However, a few
of the costs can be quantified.
    First, the cost of limiting visitors can be estimated as the cost
of monitoring and providing protective clothing to visitors who are
allowed on the farm. The cost of monitoring visitors includes the cost
of posting signs asking visitors to check in, the cost of having
visitors sign in, and the cost of accompanying visitors around the
farm. Protective clothing costs $78.75 for a box of 25 disposable
coveralls and $105.38 for a box of 200 plastic shoe covers (Ref. 106).
Because farms will choose to implement this part of biosecurity in
different ways, it is impossible to determine what the actual cost will
be.
    The cost of cleaning contaminated equipment is uncertain because we
do not know how individual farmers will choose to do this. In our
analysis, we assume that the amount of equipment that needs to be kept
clean increases linearly with the number of houses on a farm. In
particular, we assume that a farm with two houses requires 1 hour of
cleaning per week, a farm with three houses requires 2 hours, and so
on. Using data from the Layers study, we find that the average farm
with more than 3,000 layers will devote 69 labor hours annually to
cleaning equipment. At a labor rate of $8.84 per hour, doubled to
include overhead costs, the total expected labor cost of this provision
is $1,210 per farm, or $5.0 million for all farms with more than 3,000
layers. We expect that there will be little or no cost for farms with
fewer than 3,000 layers because the vast majority of these farms have
only one layer house.
    The cost of chlorine footbaths also can be estimated. We calculate
the cost of a footbath as the sum of the cost of the plastic vessel,
the cost of bleach, and the cost of the labor needed to fill footbaths.
We estimate the total cost per house on farms with more than 3,000
layers to be $420 per year.\30\ Houses with fewer than 3,000 layers
generally are very small and will need only one footbath. As a result,
the cost per house for farms with fewer than 3,000 layers would be
$210. Because only 24.6 percent of houses currently use footbaths, the
total annual cost of footbaths is estimated to be (100 - 24.6 percent)
x 8,612 houses x $420 per house = $2.7 million. We assume
 
[[Page 56866]]
 
that an insignificant number of farms with fewer than 3,000 layers use
footbaths. Therefore, the cost to these very small farms is $7.1
million (33,824 houses x $210 per house).
---------------------------------------------------------------------------
 
    \30\ This estimate is based on the following assumptions: (1)
The plastic vessel costs $5 and is replaced annually; (2) bleach
costs $1 a gallon, a gallon is used per footbath, and it is changed
once a week; (3) there are two footbaths per house; (4) labor costs
$8.84 an hour (Ref. 107) and is doubled to include costs of
overhead; and (5) changing the bleach-water mixture takes 10
minutes. The estimate in the text is calculated as 2 x ($5 + $1 x 1
x 52 + $17.86 x 0.67 x 52) = $420 per year.
---------------------------------------------------------------------------
 
    Employee biosecurity also includes the cost of using protective
clothing when moving between houses. As noted above, the cost of
plastic coveralls is $78.75 per box of 25, and the cost of plastic shoe
covers is $105.38 per box of 200. Because employees will only wear
these garments under certain conditions, it is impossible to precisely
estimate the annual cost to a farm. We assume that the cost of
protective clothing increases linearly with the number of houses on a
farm. In particular, we assume that a farm with two houses will use one
coverall and two shoe covers per day, a farm with three houses will use
2 coveralls and 4 shoe covers, and so on. If only one coverall and two
shoe covers are used per day because of this provision, the annual cost
would be $1,534 per farm (365 x ($78.75 / 25 + $105.38 / 100)). The
average cost for a farm with more than 3,000 layers would be $2,027. We
estimate that the total cost of protective clothing would be $8,268,400
for farms with more than 3,000 layers. We do not foresee that employees
on very small farms will use protective clothing because cross-
contamination of SE-positive flocks with SE-negative flocks is unlikely
(most small farms have one flock), and the cost of protective clothing
is relatively high for these producers.
    Finally, the cost of keeping stray poultry, birds, and other
animals away from poultry houses already is accounted for under rodent
and pest control costs. The estimated cost for a complete rodent and
pest control program includes all biosecurity measures that contribute
to rodent and pest control.
    There are potentially significant costs that we have not included
here. These include the cost of creating barriers (such as fences) to
keep stray poultry and wildlife from entering a layer house.
    The total measured costs of biosecurity provisions are $16.0
million for farms with 3,000 or more layers and $7.1 million for farms
with fewer than 3,000 layers.
    iv. Benefits of biosecurity. The importance of biosecurity in the
reduction of disease transmission is well established.\31\ For example,
the Layers study (Ref. 27) estimates that farms allowing non-business
visitors onsite are five times more likely to test positive for SE than
farms that ban such visitors. Farms allowing non-business visitors have
a prevalence of SE of 17.0 percent while farms that do not only have an
SE prevalence of 3.6 percent. We include the benefits from biosecurity
with those of rodent control, because the effects cannot be estimated
separately.
---------------------------------------------------------------------------
 
    \31\ A number of State extension services have written
extensively about the importance of biosecurity (Refs. 108, 109, and
110).
---------------------------------------------------------------------------
 
    e. Cleaning and disinfecting. i. Cleaning and disinfecting
provisions. Specific cleaning and disinfecting provisions include the
removal of all visible manure, a dry clean followed by a wet clean of
the house, and disinfecting of the house.
    ii. Current industry practices; cleaning and disinfecting. To a
large extent the layer industry already performs adequate cleaning and
disinfecting procedures. For larger houses, the Layers study (Refs. 25
and 26) estimates that, at some point, manure is removed from 100
percent of houses, 80.5 percent of houses are dry cleaned, 53.6 percent
of houses are wet cleaned, and 65.1 percent of houses are disinfected.
The prevalence of these practices on large farms is illustrated in
table 14 of this document.
 
                                         Table 14.--Current Cleaning and Disinfecting Practices for Large Farms
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Manure Removal (%)      Dry Clean (%)        Wet Clean (%)        Disinfect (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Between each flock (cleaned annually)                                             96.6                 79.4                 30.6                 44.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
After two or more flocks (cleaned occasionally)                                    3.4                  1.1                 23.0                 20.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Never                                                                              0                   19.5                 46.4                 34.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
    We assume that smaller farms are likely to remove manure and dry
clean at the same rate as larger farms. The likely economies of scale
for wet cleaning and disinfecting houses, however, imply that the cost
per square foot wet cleaned or disinfected would be higher for small
farms than for larger farms. The cost of hiring someone to complete the
job includes the cost of travel time, overhead, and the cost of setting
up equipment. Farmers may find it economical to rent or buy equipment.
When this occurs, the farmer's labor hours expended on cleaning and
disinfecting are likely to be higher than that of trained
professionals.
    iii. Costs of cleaning and disinfecting. The cost of cleaning and
disinfecting houses with more than 3,000 layers is illustrated in table
15 of this document. For each component of cleaning and disinfecting,
we estimate the annual cost as the number of houses that this provision
will affect each year times the cost per house. We calculate the number
of houses affected as the product of the percent of houses not using a
practice (100 minus the percent using the practice in table 15 of this
document), the probability of a positive flock, and the number of
houses with 3,000 or more layers (8,612, calculated from data in table
6 of this document).
 
                                      Table 15.--Cost of Cleaning and Disinfecting Houses with 3,000 or more Layers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Probability of a
                                                               Houses Using      Positive Env.     No. of Houses     Cost Per  House   Cost to  Industry
                                                               Practice (%)        Test (%)           Affected
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dry Clean                                                             79.8               8.4                   146             $1,054           $154,090
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
[[Page 56867]]
 
 
Wet Clean                                                             38.3               8.4                   446             $5,750         $2,564,834
--------------------------------------------------------------------------------------------------------------------------------------------------------
Disinfect                                                             51.4               8.4                   351               $513           $180,094
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Cost                                                                                                                                    $2,899,018
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
    The percentages of houses engaged in the different cleaning and
disinfecting practices (the first column of numbers in table 15 of this
document) is based on the first two rows of table 14 of this document.
In table 15 we calculate the percent as CA + (CO x PC), where CA is the
percent of farms that are cleaned and disinfected annually, CO is the
percent of farms that are cleaned and disinfected occasionally, and PC
is the probability that a farm that is cleaned occasionally would have
been cleaned in a year that it had a positive environmental test. We
assume that PC is distributed uniformly between 0 and 0.667, with a
mean value of 0.333. CA and CO are taken directly from table 14 of this
document.
    The per-house cost for each component is taken from Morales and
McDowell (Ref. 111). We assume that the true cost of each component is
distributed uniformly between the low and the high estimates given.
    We show the cost of cleaning and disinfecting separately for farms
with fewer than 3,000 layers in table 16 of this document. For the
reasons stated above, we assume that it will be more economical for
small farmers to do their own cleaning and disinfecting, as opposed to
hiring professionals.
 
                Table 16.--Cleaning and Disinfecting Costs for Farms with Fewer than 3,000 Layers
----------------------------------------------------------------------------------------------------------------
                                                                     Dry Clean       Wet Clean       Disinfect
----------------------------------------------------------------------------------------------------------------
Equipment Cost                                                               $10             $90              $0
----------------------------------------------------------------------------------------------------------------
Chemical Costs                                                                $0             $30            $100
----------------------------------------------------------------------------------------------------------------
Labor                                                                       $141            $283             $71
----------------------------------------------------------------------------------------------------------------
Cost per House                                                              $151            $403            $171
----------------------------------------------------------------------------------------------------------------
Percent of Houses Affected                                                  1.7%            6.8%            6.2%
----------------------------------------------------------------------------------------------------------------
No. of Houses Affected                                                       574            2295            2109
----------------------------------------------------------------------------------------------------------------
Total Cost                                                               $86,674        $924,885        $360,639
----------------------------------------------------------------------------------------------------------------
 
    For each category of cleaning and disinfecting we have estimated
the equipment, chemical, and labor costs of performing the task. We
value labor at the average hourly wage for livestock and poultry
workers, $8.84, doubled to include overhead costs (Ref. 107).
    Dry cleaning is a necessary precursor to wet cleaning. In this
stage of the process, loose dirt, cobwebs, rodent nests, organic
matter, litter, and feed are removed from the house. Equipment needs
include brooms, shovels, wheelbarrows, and other implements. We assume
that farms already will have these types of equipment but may need to
pay for protective clothing and masks. We estimate that it will take a
day of labor to dry clean a small house.
    Wet cleaning is more complicated than dry cleaning. The first step
of wet cleaning is to cover all sensitive equipment in the house (such
as lighting and any other electrical appliances) with plastic. Next, a
pressure washer (in conjunction with an acceptable detergent) is used
to thoroughly clean the cages and walls of the house. We assume the
pressure washer will be rented for 3 days. Finally, standing pools of
water are expelled from the house and the house is left to dry. We
assume that 2 days worth of labor will be required to complete a wet
clean on a small house.
    In the final stage, a disinfectant is sprayed throughout the dried
house (or the house may be professionally fumigated). We assume that
this will take only a half of a day worth of labor for a small farm.
    We assume that the probability of a positive flock is the same for
all size farms (8.4 percent). We also assume that the percent of houses
that would be affected by the drying cleaning provisions would be the
same for farms with fewer than 3,000 layers as for farms with 3,000 or
more layers: The percent not dry cleaning multiplied by the probability
of a positive flock ((1 - 0.798) x 0.084). Small farms are less likely
to wet clean and disinfect; we assume that the percentage of farms with
fewer than 3,000 layers not using those practices is uniformly
distributed between the percentage of farms with 3,000 or more layers
not using those practices and 100 percent. We therefore estimate that
81 percent of farms with fewer than 3,000 layers do not wet clean and
74 percent do not disinfect houses. We multiply these estimates by the
probability of a positive flock to estimate the percentage of small
farms affected by the wet cleaning and disinfecting provisions.
    To estimate the number of farms with fewer than 3,000 layers that
would be affected by dry cleaning, wet cleaning, and disinfecting
provisions, we multiply the percentage affected by each provision by
the number of such farms (33,824). For each practice, dry cleaning, wet
cleaning, disinfecting, we multiply the costs per house by the number
of houses affected. We then sum the results to estimate the total costs
of
 
[[Page 56868]]
 
cleaning and disinfecting houses on farms with fewer than 3,000 layers.
The total increased cost of cleaning and disinfecting on these very
small farms would be about $1.4 million.
    iv. Benefits of Cleaning and Disinfecting. Cleaning and
disinfecting is another tool that may decrease or eliminate SE in an
infected house. Schlosser et al. estimate that cleaning and
disinfecting a house reduces, by 50 percent, the probability that a
previously infected house will test positive (Ref. 39). Because cross-
contamination is not addressed in this study, the 50 percent reduction
is likely to be an overestimate of the actual efficacy of cleaning and
disinfecting. Furthermore, the same study estimates that 28 percent of
negative houses tested positive after cleaning and disinfecting.
    The Layers Report (Ref. 27) finds that farms that are cleaned and
disinfected are less likely to be contaminated with SE. No surveyed
farms that performed wet washes of houses between flocks were found to
be positive. By contrast, houses that neither wash nor fumigate between
flocks had SE prevalence rates of 12.2 percent. These results suggest
that cleaning and disinfecting a layer house is negatively correlated
with SE prevalence.
    f. SE-Monitored chicks and pullets. i. Chick and pullet provisions.
We also considered the provision that farmers obtain their chicks or
pullets from an SE monitored breeder flock.\32\
---------------------------------------------------------------------------
 
    \32\ NPIP certified or the equivalent.
---------------------------------------------------------------------------
 
    ii. Current industry practices--SE-monitored chicks and pullets.
According to the Layers study (Refs. 25 and 26), 94.6 percent of farm
sites representing 94.5 percent of layers received their chicks from
flocks that were bred under the NPIP program. Furthermore, NPIP has
successfully integrated all of these layers into the NPIP U.S.
Salmonella Enteritidis monitored program (Ref. 112).
    NASS estimates that a total of 138,292,380 pullets and chicks were
sold in 1997 (Ref. 22). If 94.5 percent of these birds were purchased
from breeder facilities that are NPIP SE monitored, then 5.5 percent
(7,606,080) of chicks and pullets are not currently monitored for SE.
    iii. Costs of SE-monitored chicks and pullets. We do not have data
for the cost of monitoring chicks for SE. However, Morales and McDowell
(Ref. 111) estimated that pullets monitored for SE cost approximately
$0.003 to $0.02 more per pullet. If we assume the cost difference is
the same for chicks, the total increased annual cost of requiring SE-
monitored chicks is estimated to be $22,820 to $152,120 with a mean
expected value of $87,470.\33\ If we assume that all farms would be
proportionally affected by this provision, the approximate annual cost
to farms with fewer than 3,000 layers would be $500, and the annual
cost to farms with 3,000 or more layers would be $87,000.
---------------------------------------------------------------------------
 
    \33\ If monitoring costs $0.003 per layer, the total cost is
7,606,080 layers x $0.003 = $22,820. If monitoring costs $0.02 per
layer, the total cost is 7,606,080 layers x $0.02 = $152,120. The
average of these two figures is $87,470.
---------------------------------------------------------------------------
 
    iv. Benefits of SE-monitored chicks and pullets. The prevalence of
SE in breeder flocks is relatively low.\34\ Between 1994 and 1996 only
9 out of 847 breeder flocks (1.1 percent) had environments that tested
positive for SE. Furthermore, over the same period only two breeder
flocks (0.2 percent) had layers that tested positive for SE.\35\ For
our estimate of benefits, we used the 0.2 percent figure because
breeders under the NPIP program must destroy their flocks when layers
test positive, not when the environment tests positive.
---------------------------------------------------------------------------
 
    \34\ The data for this paragraph is drawn from Rhorer (Ref.
113).
    \35\ Under the NPIP program a flock only loses its certification
as a NPIP SE-monitored flock if birds test positive.
---------------------------------------------------------------------------
 
    The 0.2 percent estimate understates the probability that a farm
not currently using NPIP SE-monitored layers will test positive. To the
extent that farmers obtain their chicks from multiple sources,\36\ we
would expect the probability that a farm obtains SE-positive chicks to
be greater than the underlying prevalence of SE in hatchery flocks.\37\
---------------------------------------------------------------------------
 
    \36\ The Layers study estimates that 38.2 percent of farms
obtain pullets from multiple sites (Refs. 25 and 26).
    \37\ The following example illustrates this point. If a farmer
obtains pullets from two different flocks, each of which has a 0.2
percent chance of having SE positive birds, the probability that the
farm will obtain SE positive birds is 0.2 percent + 0.2 percent -
0.04 percent = 0.36 percent.
---------------------------------------------------------------------------
 
    We calculated the expected benefit of this provision using the
percentage of farms affected by the provision multiplied by the
probability of a positive test. Because only 5.5 percent of farms
receive birds from breeder flocks that are not SE monitored, the
expected effect of this provision on SE contamination on the farm and,
hence, human illness, is projected to be slightly greater than 0.01
percent (5.5 percent x 0.2 percent). This percent translates into an
expected benefit of less than one case of SE per year averted at farms
with fewer than 3,000 layers, and 10 illnesses averted for farms with
3,000 or more layers. The cost per illness averted is $8,960 for farms
with fewer than 3,000 layers and $8,410 for farms with more than 3,000
layers.
    This provision attempts to bar the introduction of SE onto the
farm. SE can be difficult to control once it has been introduced onto a
farm, but if SE is never introduced, it is impossible for it to spread.
For this reason, effective SE control in chick populations has been
cited as critical.
    g. SE-Negative feed. i. Feed provisions. We considered proposing to
require the use of feed that meets the standards for SE-negative feed,
as defined by FDA's Center for Veterinary Medicine (CVM). CVM defines
SE-negative as 10 subsamples that are negative for SE (measured using
the Bacteriological Analytical Manual method) collected for a lot of
feed (60 FR 50098, September 28, 1995). Composite samples may be used
to reduce testing costs. We received comments that SE-negative feed is
not currently available commercially.
    ii. Current industry practices--SE monitoring of feed. The layer
 
industry obtains feed from both independent feed mills and from egg
farmers that produce feed in their own mills. The Economic Research
Service (ERS) report on the feed manufacturing industry estimates that
egg producers operated a total of 144 feed mills in 1984 (Ref. 114). In
the absence of more recent data, we assume that they operated the same
number in 2002. To isolate the number of independent feed mills
operating in the United States, we used the July 2000 version of Dun's
Market Identifiers (Ref. 115). Using this database, we were able to
isolate 210 mills that primarily produce poultry and chicken feeds. We
consider this figure to be the lower bound of the number of independent
feed mills producing layer feed. For the upper bound, we assume that
all 2,459 establishments that Dun's Market Identifiers reports as
producers of animal feeds produce layer feed.\38\ This estimate is
similar to the 1984 Economic Research Service estimate of 2,432 primary
feed manufacturers. Assuming that the true number of feed mills
producing layer feed is uniformly distributed between the upper and
lower bounds, we estimate that approximately 1,300 feed mills produce
layer feed.
---------------------------------------------------------------------------
 
    \38\ The lower bound estimate is likely to underreport the
number of mills producing layer feed because most firms did not
report to Dun's Market Identifiers what kinds of feeds they
produced.
---------------------------------------------------------------------------
 
    iii. Costs of monitoring feed for SE. The cost of this provision to
a feed mill would be the sum of the labor, laboratory, and shipping
costs for testing, multiplied by the number of lots
 
[[Page 56869]]
 
tested. In addition, SE-positive feed would have to be treated or
destroyed.
    The laboratory cost per test has been estimated to be approximately
$49.75 per sample.\39\ In addition, we estimate that the collection and
preparation of each subsample will take approximately 10 minutes. Given
an hourly wage of $14.65 for production inspectors at grain and feed
mills (Ref. 117), doubled to include overhead costs, we estimate the
cost of labor to be $48.84 ($29.30 x 1.667 hours) for each full sample.
The cost of shipping each sample to a lab is estimated to be $22.\40\
The total cost per composite sample is $121.47 ($49.75 + $48.84 +
$22.88).
---------------------------------------------------------------------------
 
    \39\ This is the cost of an Association of Official Analytical
Chemists test for Salmonella genus and a serotype test at Silliker
Laboratories (Ref. 116). One option that mills have is to initially
test for the genus of Salmonella ($19.75) and then, if the test is
positive, follow through with a test for the serotype enteritidis
($30). We assume that mills will not choose this option because
Salmonella positive feed is considered adulterated and firms will
not want to test to see if their feed is adulterated unless mandated
to do so by FDA.
    \40\ The cost of shipping a 2-pound package overnight in the
United States ranges from $18.00 to $27.75. These figures include a
$3 pick-up charge. The average charge is estimated to be $22.88
(Ref. 118).
---------------------------------------------------------------------------
 
    Samples must be taken for each lot of feed. We expect that, because
of limited storage space for finished feed, a lot of feed will not
exceed 3 days worth of production for most large mills. For some small
mills, however, a lot may be a week's worth of production; for some
large mills a lot may be a day's worth of production. Given these
parameters, we assume that the frequency of feed testing will be
distributed uniformly between once a week and five times a week with a
mean frequency of 3 times a week. Consequently, the expected annual
cost of testing for a typical feed mill is calculated to be
approximately $18,950 ($121.47 per sample x 52 weeks x 3 times a week).
The cost of testing all of the approximately 1,450 entities that
produce feed is estimated to be $27.5 million. If these costs are
passed on to farmers at a rate proportional to the number of layers on
the farm, the total cost to farms with fewer than 3,000 layers would be
$137,500 and the cost to farms with more than 3,000 layers would be
$27,362,500.
    In the event of a positive feed test, feed mills would have to
treat or destroy the suspect feed. It is also likely that the mill
would take action to address the problem at its source. Furthermore,
any feed that the mill has shipped would be considered adulterated. The
mill would have to recall this feed and treat or dispose of it, which
could be very costly. If, however, an SE positive lot were identified
through testing, this provision would result in increased benefits.
    iv. Benefits of monitoring feed for SE. Feed contaminated with SE
is theoretically also a vehicle for the introduction of SE on the farm.
In 1997, SE was found in 0.3 percent of finished feed samples that were
serotyped in the United Kingdom (Ref. 119). In the United States,
however, testing for SE in finished layer feed at the mill has almost
never yielded positive results.\41\ Nonetheless, the fact that SE has
been isolated from finished feed at mills in the United Kingdom and
from feed ingredients suggests that SE contamination is a potential
problem (Ref. 102).
---------------------------------------------------------------------------
 
    \41\ SE has been isolated in ingredients at feed mills in the
United States (Ref. 120).
---------------------------------------------------------------------------
 
    If feed is contaminated with SE, the consequences for human health
are potentially large. A feed mill that does not test feed for SE and
becomes contaminated with SE could deliver a large number of shipments
of contaminated feed before the problem is uncovered. The potential
financial consequences to the farms using the feed include costs due to
increased cleaning and disinfecting, egg testing, and diversion of
eggs. Also, there likely would be adverse health effects from the
consumption of SE-positive eggs.
    h. Vaccination of flocks. i. Vaccination provision. Inoculating
layers with vaccines is another potential way of preventing the growth
of SE in layers. FDA could mandate that all layers be inoculated
against SE.
    ii. Current industry practices; vaccination of flocks. The Layers
study (Refs. 25 and 26) estimates that at least 14.6 percent of all
layers on farms with 3,000 or more layers are vaccinated against SE. We
assume that an insignificant number of layers on farms with fewer than
3,000 layers are vaccinated against SE.
    iii. Cost of vaccinating flocks. Vaccination costs approximately
$0.135 per layer for an inoculation\42\ (Ref. 121). Given 255.5 million
layers on larger farms and 1.4 million layers on smaller farms, we
expect that this provision would result in 218.0 million new
vaccinations on larger farms and 1.4 million new vaccinations on
smaller farms. Consequently, the cost of vaccination on farms with at
least 3,000 layers would be $29.3 million. The total cost for farms
with fewer than 3,000 layers would be $0.2 million.
---------------------------------------------------------------------------
 
    \42\ This is based on a per layer cost of $0.035 for vaccine
plus $0.10 for labor (Ref. 121).
---------------------------------------------------------------------------
 
    iv. Benefits of vaccinating flocks. The evidence regarding the
efficacy of vaccines in reducing SE in laying hens is mixed. Gast et
al. showed in an experimental setting that vaccines do partially reduce
the shed of SE from laying hens (Ref. 122). By contrast, Davison et al.
used a field experiment to show that vaccines are relatively
ineffective in stopping the spread of SE on farms (Ref. 123).
    v. Refrigeration. i. Refrigeration provisions. We considered a
refrigeration provision that all eggs held for more than 36 hours after
lay be refrigerated at a maximum ambient temperature of 45 [deg]F.
    ii. Current industry practices; refrigeration. Because eggs packed
on the farm do not have to be transported to a packing plant, we assume
that eggs on these farms are packed for sale within 36 hours of lay.
Accordingly, we assume that this provision would impose additional
costs only on those farms that do not pack their eggs for the ultimate
consumer, are currently storing their eggs for longer than 36 hours,
and currently do not refrigerate their eggs at an ambient temperature
at or below 45 [deg]F. We use data from the Layers study (Refs. 25 and
26), shown in table 17, to determine the percentage of farms affected
by the on-farm storage temperature requirements.
 
                                        Table 17.--Farms Affected by On-Farm Egg Storage Temperature Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Stored Longer     Temp >45
                     Farm Size (No. of Layers)                       Packed Off-Farm    Than 36 Hours    Degrees F   Percent of Farms     No. of Farms
                                                                           (%)               (%)            (%)           Affected          Affected
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than 3,000                                                             100.0             100.0          81.2             81.2                27,465
--------------------------------------------------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                              98.3              98.2          78.1             75.4                 1,762
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
[[Page 56870]]
 
 
20,000 to 49,999                                                             96.3             100.0          75.8             73.0                   686
--------------------------------------------------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                             83.1              83.4          92.1             63.8                   229
--------------------------------------------------------------------------------------------------------------------------------------------------------
100,000 or more                                                              65.6              75.0          72.6             35.7                   158
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total                                                                        81.2              87.3          81.2             57.6                30,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
    The first three columns of table 17 of this document are taken
directly from data collected for the Layers study. The percentage of
farms affected (fourth column) is the product of multiplying the first
three columns. The number of farms affected (final column) is estimated
by multiplying the percent of farms affected by this provision by the
total number of farms covered by the provision.
    It is clear from the percentages of farms affected (fourth column)
that temperature requirements are more likely to affect smaller farms
than larger farms. For those farms with fewer than 3,000 layers, we
assume that all eggs are packed off the farm,\43\ all are stored for
more than 36 hours, and 81.2 percent (the average for all other
categories) are stored at a temperature higher than what is required
for the provision.\44\
---------------------------------------------------------------------------
 
    \43\ Although there are some small farms that pack their eggs on
the farm, we assume that most small farms that pack their own eggs
sell all of their eggs directly to consumers, and therefore are not
covered by the proposed rule. We have no information regarding how
many farms that are covered by this rule pack their eggs. We request
comment on the prevalence of this practice.
    \44\ The assumptions that all eggs from farms with fewer than
3,000 layers are packed off of the farm and are stored for longer
than 1 day are based on an extrapolation of the trends by farm size
that are apparent in table 17 of this document. Because there is no
obvious trend for compliance with temperature requirements, we use
the mean value for all farms as our assumption for farms with fewer
than 3,000 layers.
---------------------------------------------------------------------------
 
    iii. Cost of refrigeration.\45\ The refrigeration provision will
cause producers to choose to perform the following tasks: (1) Turn down
the thermostats in their coolers, (2) install new refrigeration, or (3)
renegotiate their shipping contracts to require more frequent pickup of
unpacked eggs.
---------------------------------------------------------------------------
 
    \45\ All cost estimates in this section are from data supplied
to FDA through a contract with the Research Triangle Institute.
Derivation of estimates is more fully described in a memorandum to
the record (Ref. 124).
---------------------------------------------------------------------------
 
    In table 17 of this document, we estimate that a total of 30,300
farms do not meet the standards set by the refrigeration provision. Of
these farms, some are currently using refrigeration, albeit at higher
temperatures than the proposed provision would permit. Others do not
have any refrigeration installed on their farms. We assume that those
farms that report storing their eggs between 45 and 60 [deg]F already
have refrigeration installed. For these farms, the cost of complying
with the refrigeration provision is simply the cost of increasing
electricity usage to further cool their eggs. For farms that store
their eggs at a temperature greater than or equal to 60 [deg]F, we
assume that no refrigeration is currently installed. The cost to these
farms includes the cost of installing an insulated egg room with
refrigeration units.
    In table 18, we use data from the Layers study to determine how
many covered farms will have to install refrigeration and how many will
only have to reduce the temperatures in their egg rooms. The majority
of smaller farms lack refrigeration facilities, while larger farms are
more likely to use refrigeration at an inadequate level.
    The cost of this provision to farms that are using refrigeration at
an inadequate level is assumed to be the cost of increased energy
usage.\46\ If temperatures in egg rooms on these farms are uniformly
distributed between 45 and 60 [deg]F, the average needed temperature
reduction is 7.5 [deg]F. If the electricity rate is $0.09 per kilowatt-
hour, farms will spend between $23 for farms with fewer than 100 layers
to over $2,200 for farms with more than 100,000 layers. These estimates
are based on the assumption that refrigeration must be run 18 hours a
day to achieve the 45 [deg]F mark, while it must be run 15 hours a day
to achieve the 60 [deg]F mark. We estimate that the average farm with
20,000 to 50,000 layers would need to run one 5-horsepower
refrigeration unit and one 1-horsepower unit to sufficiently cool its
egg room. A 5-horsepower unit uses 4.83-kilowatt hours per hour of
operation, while a 1-horsepower unit only uses 1.73-kilowatt hours.
Therefore, the cost of cooling to 60 [deg]F is (4.83 + 1.73) kilowatt
hours used per hour x 15 hours of operation x $0.09 per kilowatt hour
used x 30 days [ap] $265 per month, or about $3,190 per year. The cost
of cooling to 45 [deg]F is (4.83 + 1.73) kilowatt hours used per hour x
18 hours of operation per day x $0.09 per kilowatt hour x 30 days [ap]
$319 per month, or about $3,830 per year. The resulting cost of
decreasing the ambient temperature in the egg cooler by 15 [deg]F is
approximately $640. Assuming a linear relationship between
refrigeration and cost gives us an estimate of approximately $320 for a
7.5 [deg]F reduction.
---------------------------------------------------------------------------
 
    \46\ We recognize that some of these farms may require
additional refrigeration units to achieve the 45 [deg]F threshold.
However, because we do not currently have information that allows us
to estimate how many farms fall into this category, we assume that
the only cost facing farms that use an inadequate level of
refrigeration will be the cost of increased energy usage.
 
[[Page 56871]]
 
 
 
                             Table 18.--Annual Cost of Refrigerating Affected Farms
----------------------------------------------------------------------------------------------------------------
                                  No Refrigeration            Inadequate Refrigeration       Total Cost (in
                      -----------------------------------------------------------------        thousands)
  Farm Size (no. of                   Cost per     Cost per                            -------------------------
       Layers)                        Farm (7%     Farm (3%                  Cost per
                          Number      discount     discount      Number        Farm     7% interest  3% interest
                                       rate)        rate)                                   rate         rate
----------------------------------------------------------------------------------------------------------------
Fewer than 100              13,950         $325         $312       11,565          $23       $4,800       $4,618
----------------------------------------------------------------------------------------------------------------
100 to 3,000                 1,066         $833         $733          884          $42         $925         $819
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999                963       $7,763       $5,882          799         $201       $7,636       $5,825
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999               205      $15,026      $11,052          482         $319       $3,234       $2,419
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                94      $28,510      $20,716          135         $553       $2,755       $2,022
----------------------------------------------------------------------------------------------------------------
100,000 or more                 35     $121,329      $87,497          123       $2,219       $4,519       $3,335
----------------------------------------------------------------------------------------------------------------
 
    The fixed cost of new refrigeration for larger farms includes the
cost of constructing an egg room, insulating that room, and installing
refrigeration units. Storage rooms and their insulation are assumed to
last 30 years. Refrigeration units last from 10 to 20 years. Using
these values, along with a 7-percent interest rate, we estimate that
the annualized cost of installing new refrigeration would be from $330
for a farm with 300 layers to $94,700 for a farm with 400,000 layers.
With an interest rate of 3 percent, we estimate that the annualized
cost of installing new refrigeration would be from $230 for a farm with
300 layers to $60,870 for a farm with 400,000 layers.
    The cost of constructing an egg room equals the number of square
feet required times the construction cost per square foot. The number
of square feet required is estimated as the number of square feet
required per 1,000 dozen eggs times the number of eggs produced in a
24-hour period (1,000 dozens) times the number of days the eggs are
expected to be stored. The cost of construction per square foot has
been estimated to be between $50 and $75. Therefore, for the average
farm with 20,000 to 50,000 layers the cost of construction is 294
square feet per thousand dozen eggs x 1.7 thousand dozen eggs x $62.50
per square foot x 3.9 days worth of storage = $125,000. The amortized
cost over 30 years at 7 percent is approximately $10,050.
    The cost of insulating an egg room equals the number of square feet
to be covered times the insulation cost per square foot. Insulation
costs $11.80 for a 32 square foot sheet. For a farm with 20,000 to
50,000 layers the expected cost of insulation is therefore 3,670 square
feet x $0.37 per square foot = $1,350. The annualized cost of
insulation (amortized over 30 years at 7 percent) is $110.
    The fixed cost of refrigeration for an egg room is the cost of
buying and installing refrigeration units. We assume that installation
costs are approximately 5 percent of the purchase price of the unit.
For a farm with 20,000 to 50,000 layers, the cost of refrigeration is
the purchase price for needed refrigeration units ($9,100) plus the
cost of installation ($9,100 x 5 percent) = $9,100 + $455 = $9,555.
Amortizing this cost over 15 years at 7 percent yields an annual cost
of $1,050.
    The total annualized cost of installing a refrigerated egg room on
a farm with 20,000 to 50,000 layers is estimated to be approximately
$11,200. This figure does not include the cost of energy. Including the
cost of energy increases the total cost to $15,026.
    The smallest farms (those with fewer than 100 layers) will not have
to install egg rooms. We believe that farms with fewer than 100 layers
will be able to store their eggs in a household refrigerator without a
freezer. We estimate the cost of a 16.7 cubic foot frost-free stand-
alone refrigerator (without a built-in freezer) to be $500. Amortized
at 7 percent over 15 years brings the annualized cost of this purchase
to $55. Amortized at 3 percent over 15 years brings the annualized cost
of this purchase to $42.
    For all types of refrigeration, there also will be a cost
associated with the use of electricity to run the cooling units. Given
that electricity costs $0.09 per kilowatt-hour, we estimate that farms
will spend an additional $270 to $26,600 annually for power.\47\
---------------------------------------------------------------------------
 
    \47\ As noted previously, for a farm with 20,000 to 50,000
layers the annualized cost of cooling an egg room to 45 [deg]F is
(4.83 + 1.73) kilowatt hours used per hour x 18 hours of operation
per day x $0.09 per kilowatt hour x 30 days [ap] $319 per month, or
about $3,830 per year.
---------------------------------------------------------------------------
 
    The cost of this provision to a farm without any refrigeration in
place is estimated to range from about $325 for farms with fewer than
100 layers to over $121,300 for farms with more than 100,000 layers.
The total cost of the refrigeration provision is approximately $23.9
million ($5.7 million of which is incurred by farms with fewer than
3,000 layers) using a 7-percent interest rate and approximately $19
million ($5.4 million of which is incurred by farms with fewer than
3,000 layers) using a 3-percent interest rate. However, some farms will
choose to increase the frequency of egg pickups instead of installing
additional refrigeration to remain in compliance with the provision. If
more frequent egg pick-ups are a lower cost alternative to
refrigeration installation, the previously mentioned figures may
overstate the actual cost of increased refrigeration.
    iv. Impact of refrigeration on egg processors. Eggs washed at a
temperature more than 40 degrees over their internal temperature are
more likely to suffer thermal checks. These minute cracks increase the
chance of egg breakage and egg contamination with pathogens from
outside of the egg. Because of this problem, egg processors will not
want to wash eggs that have an internal temperature of less than 50
degrees.
    We are considering a refrigeration provision requiring that eggs be
kept at an ambient temperature of 45 degrees, if they are held by the
producer for more than 36 hours.
    Whether high wash water temperatures will damage refrigerated eggs
depends on whether the internal temperature of the eggs is less than 50
degrees. As a result, the cooling rate of refrigerated eggs becomes an
important question. We ask for comment on this question and on the
costs to processors.
    v. Benefits of refrigeration. The probability that an individual
will become ill from an SE-contaminated egg
 
[[Page 56872]]
 
depends, among other things, on the number of bacteria within the
infected egg. Refrigeration of eggs at 45 [deg]F significantly slows
the reproduction of the SE bacteria (Ref. 15). This provision would
require that eggs that are stored for more than 36 hours after laying
be refrigerated at 45 [deg]F while on the farm. In this section, we
calculate the effectiveness of potential storage and refrigeration
requirements using the USDA SE risk assessment model (Ref. 15). This
model is designed to estimate the effects of preventive measures on SE
illness.
    In the following cost model, we estimate that 35.7 percent (farms
with fewer than 3,000 layers) to 81.2 percent (farms with more than
100,000 layers) of farms currently meet the refrigeration standards of
the proposed provision. Taking a weighted average, we estimate that
46.6 percent of eggs are produced on farms that do not currently meet
the standards set forth in the provision.\48\ We programmed the SE risk
assessment to estimate the effects on SE if all farms meet the
refrigeration requirement. A storage and refrigeration provision is
expected to incrementally reduce illnesses by 2.3 percent. In the
absence of other provisions this percentage reduction translates into a
benefit of 10 illness averted annually for farms with less than 3,000
layers and more than 2,160 illnesses averted for farms with more than
3,000 layers. The cost per illness averted on farms with less than
3,000 layers is $563,206 when we use a 7 percent interest rate
($534,829 when we use a 3 percent interest rate). The cost per illness
averted on farms with more than 3,000 layers is $8,380 when we use a 7
percent interest rate ($6,282 when we use a 3 percent interest rate).
---------------------------------------------------------------------------
 
    \48\ The weighted average number of eggs affected by this
proposed rule is calculated using the following formula. Percent of
eggs affected = the sum of (farms affectedi x percent of
birds in size categoryi), where i is an index for farm
size. This formula yields: Percent of eggs affected = (78.8 percent
x 0.23 percent) + (71.8 percent x 10.55 percent) + (63.7 percent x
10.51 percent) + (56.1 percent x 9.67 percent) + (27.5 percent x
69.04 percent) = 38.9 percent.
---------------------------------------------------------------------------
 
    j. Routine environmental testing. Environmental testing does not
serve directly as an SE prevention measure. Testing serves primarily as
an indicator of the effectiveness of the SE prevention measures.
    i. Environmental testing provision. This potential provision would
require every farm to routinely test the environment of their layers
for SE. For flocks that do not undergo a molt, this requirement would
be limited to a test for SE in the environment when each group of
layers in the flock is 40 to 45 weeks of age. For those flocks that do
undergo a molt, testing would be required when each group of layers is
40 to 45 weeks of age and 20 weeks after molting for each group is
completed.
    Testing would be accomplished by a method such as swabbing manure
piles in the poultry house and then culturing those swabs using a
primary enrichment testing method. We are considering variants of
sampling protocols that are currently in use. California currently uses
a sampling plan that relies on randomly swabbing 30-foot sections of
the poultry house (Ref. 125). To obtain a 95 percent probability of
catching a house that is 10 percent infected, we estimate that 32
samples would have to be taken. Many other States, including
Pennsylvania, require the span of each row of the layer house to be
swabbed with one swab, regardless of row length (Ref. 39).
    ii. Current industry molting practices. Molted flocks face
additional testing under this provision, so current industry molting
practices are an important element in determining the cost of this
provision. Overall, 62.1 percent of all large flocks are molted once
and 12.1 percent are molted twice before depopulation (Refs. 25 and
26). Industry molting practices, however, vary by region and by farm
size.
    Farms in the Central and Great Lakes regions are least likely to
molt their flocks while farms in the Southeast and West are most likely
to use molting as a practice. (See table 19 of this document.)
 
                                    Table 19.--Regional Molting Practices\1\
----------------------------------------------------------------------------------------------------------------
                                                                    Times Molted (percent)
                   Region                   --------------------------------------------------------------------
                                                       0                      1                      2
----------------------------------------------------------------------------------------------------------------
Great Lakes                                              30.0                   65.2                    4.8
----------------------------------------------------------------------------------------------------------------
Southeast                                                 7.3                   80.2                   12.5
----------------------------------------------------------------------------------------------------------------
Central                                                  48.8                   51.2                    0.0
----------------------------------------------------------------------------------------------------------------
West                                                     17.9                   50.0                   32.1
----------------------------------------------------------------------------------------------------------------
\1\ Layers study data provided by Animal and Plant Health Inspection Service.
 
    The implication of the regional disparities in molting practices is
that any rule that treats molted and non-molted flocks differently will
also affect regions differently.
    Molting practices also vary by farm size. As table 20 of this
document illustrates, smaller farms are less likely to molt their
layers than are larger farms. While almost 85 percent of all farms with
50,000 or more layers molt their layers, only 27.8 percent of farms
with fewer than 20,000 layers molt their flocks. This disparity plays a
significant role in the determination of the expected cost of testing
and diversion.
 
                                  Table 20.--Molting Practices by Farm Size\1\
----------------------------------------------------------------------------------------------------------------
                                                                     Times Molted (in %)
         Farm Size (No. of layers)          --------------------------------------------------------------------
                                                       0                      1                      2
----------------------------------------------------------------------------------------------------------------
Fewer than 20,000                                        72.2                   27.8                    0.0
----------------------------------------------------------------------------------------------------------------
 
[[Page 56873]]
 
 
20,000-49,999                                            35.3                   54.0                   10.7
----------------------------------------------------------------------------------------------------------------
50,000-99,999                                            13.6                   68.4                   18.0
----------------------------------------------------------------------------------------------------------------
100,000 or more                                          15.7                   72.3                   12.0
----------------------------------------------------------------------------------------------------------------
\1\ Layers study data provided by Animal and Plant Health Inspection Services.
 
    iii. Current environmental testing practices. According to the
Layers study, approximately 52 percent of all farms with more than
30,000 layers currently conduct some routine environmental tests for SE
(Refs. 25 and 26). The vast majority of these producers are also
members of formal quality assurance programs. Because very few small
farmers are members of these programs, we assume that no farmers with
fewer than 3,000 layers currently engage in routine testing of the
environment for Salmonella. This assumption is likely to lead to an
overestimation of testing costs. However, we also assume that all
houses contain only one group of layers. Because there are some multi-
age houses that are considered to have multiple groups for the purposes
of testing, assuming that each house has only one group is likely to
lead to an underestimation of costs.
    iv. Environmental testing costs. The cost of routine environmental
testing depends on how many samples are tested, the labor cost of
collecting the samples, the cost of shipping the samples to a
laboratory, and the laboratory cost per sample tested.
    We assume that it will take approximately 15 minutes to collect and
pack each sample. Since the wage for a typical livestock and poultry
worker is approximately $8.84 per hour (Ref. 107), doubled to reflect
overhead costs, the cost of labor is assumed to be (15 / 60) x $17.68 =
$4.42 per sample collected.
    The cost of shipping samples will vary by the weight of the
shipment. We assume that a swab, with its packing material, weighs
approximately one pound. To calculate the cost of shipping, we estimate
the average number of swabs sent per shipment and use rate tables (Ref.
118) to determine the cost of shipment.
    We estimate the laboratory cost of testing for SE that has been
collected from the environment to be approximately $37.50 per
sample.\49\
---------------------------------------------------------------------------
 
    \49\ This is the average of in-State and out-of-State pricing in
the California Animal Health & Food Safety Laboratory System (Ref.
126).
---------------------------------------------------------------------------
 
    The average cost of routine testing for SE in a given house is
determined by multiplying the number of tests required for that house
by the expected cost per test. For any plan that is used, the per house
cost of testing is estimated to be Cost = SWABS x (LABOR + MAIL + LAB),
where SWABS is the number of required swabs, LABOR is the cost of labor
per test, MAIL is the cost of shipping samples to a lab, and LAB is the
laboratory costs of testing for SE.
    To determine the testing cost of the row-based plan, we multiply
the cost per test by the estimated number of rows that will have to be
swabbed. We assume that all farms that are currently conducting routine
testing (52 percent) (Refs. 25 and 26) are in compliance with the row-
based plan.
    The number of rows that will have to be swabbed in larger houses is
estimated in table 21 of this document. Information for the first three
columns is drawn from the Layers study (Refs. 25 and 26). We estimate
the number of houses affected by the provision (the fourth column) by
multiplying the number of large houses (8,560) by the percent of houses
affected by the provision (48 percent), and then multiplying the
product by the percent of houses in the given category. We estimate the
number of rows that will have to be swabbed because of the provision as
the number of rows per house times the number of houses affected by the
provision. A total of 24,960 rows would have to be swabbed due to this
provision.
 
                                      Table 21.--No. of Rows to be Swabbed
                                       (Houses With 3,000 or More Layers)
----------------------------------------------------------------------------------------------------------------
                                                        Average No.   Percent of   No. of Houses    No. of Rows
           No. of Rows or Batteries of Cages             of Rows\1\     Houses       Affected        Affected
----------------------------------------------------------------------------------------------------------------
1                                                             1.0          1.9                80              80
----------------------------------------------------------------------------------------------------------------
2 to 3                                                        2.5         12.5               520           1,290
----------------------------------------------------------------------------------------------------------------
4 to 5                                                        4.5         50.8             2,100           9,450
----------------------------------------------------------------------------------------------------------------
6 or more                                                    10.0         34.2             1,410          14,140
----------------------------------------------------------------------------------------------------------------
Total                                                         6.1    ...........           4,110          24,960
----------------------------------------------------------------------------------------------------------------
\1\ The average number of rows per house is estimated as the midpoint of the range estimated by Layers study.
  For the ``6 or more'' category we assume that these houses have an average of 10 rows each. We ask for comment
  on the validity of this assumption.
 
    Because each row has two sides, each of which will have to be
swabbed, the total number of swabs required is estimated to be
approximately 49,910. On average, 12.1 swabs will be used for each
house with more than 3000 layers.
 
[[Page 56874]]
 
The total cost of testing the average large house is $541 (12.1 swabs x
($4.42 labor + $2.77 shipping\50\ + $37.50 lab culture)) when two swabs
are used per row.
---------------------------------------------------------------------------
 
    \50\ The cost of shipping 12 swabs (12 pounds) overnight is
estimated to be between $26.25 and $40.25, including pickup charges
(Ref. 118). We divide the average cost of shipping by 12 to obtain
the cost per swab ($2.77).
---------------------------------------------------------------------------
 
    We assume that no houses with fewer than 3,000 layers currently
conduct these tests. Furthermore, we assume that these smaller houses
have from one to two rows of cages. Thus, the estimated average number
of swabs used per small farm is three. The total cost of one round of
testing for each very small farm is $148 (3 swabs x [$4.42 labor +
$7.42 shipping\51\ + $37.50 lab culture]) when two swabs are used per
row.
---------------------------------------------------------------------------
 
    \51\ The cost of shipping 3 swabs (3 pounds) overnight is
estimated to be between $19.25 and $25.25, including pickup charges
(Ref. 118). We divide the average cost of shipping by 3 to obtain
the cost per swab ($7.42).
---------------------------------------------------------------------------
 
    The random swabbing plan requires that 32 samples be taken per
house. Although 52 percent of houses are in compliance with the row-
based plan, far fewer are likely to be in compliance with the random
swabbing plan. In the absence of better information, we assume that
between 0 and 52 percent (uniformly distributed) of large houses that
are currently testing use random swabbing plans.\52\ The cost per swab
under the random swabbing sampling plan is $43.65 ($4.42 labor + $1.73
shipping\53\ + $37.50 lab culture). The total cost of one round of
testing under the random swabbing plan is calculated to be $47.2
million for farms with fewer than 3,000 layers (33,820 houses not in
compliance x 32 swabs per house x $43.65 cost per swab) and $12.0
million for farms with more than 3,000 layers (8,610 houses not in
compliance x 32 swabs per house x $43.65 cost per swab).
---------------------------------------------------------------------------
 
    \52\ We assume that no small houses are testing using random
swabbing plans.
    \53\ The cost of shipping 32 swabs (32 pounds) overnight is
estimated to be between $40.50 and $70.50, including pickup charges
(Ref. 118). We divide the average cost of shipping ($55.50) by 32 to
obtain the cost per swab ($1.73).
---------------------------------------------------------------------------
 
    k. Followup egg testing. i. Egg testing provisions. Followup egg
testing would occur if an environmental test is positive for SE. If egg
testing is triggered, the following protocol must be followed. First,
the farmer must submit 1,000 eggs to a recognized lab initially, and
subsequently every 2 weeks, for a total of 4,000 eggs. Consistent with
the method described by Valentin-Bon et al (Ref. 62), the eggs that are
submitted for testing may be pooled in samples of 10 to 20 eggs each.
If pooled into samples of 20 eggs each, a total of 200 egg tests are
conducted. If any of these egg tests are positive, the farm will be
required to divert its eggs until four consecutive rounds of egg tests
are found to be negative. Furthermore, a farm that has had a positive
egg test must continue to test 1,000 eggs each month for the life of
the flock.
    If the cost of egg testing is high enough, however, the farmer may
simply choose to forego egg testing and divert all eggs for the life of
the flock.
    ii. Current industry practices; Followup egg testing. We assume
that those farms currently under a recognized quality assurance plan
that mandates egg testing following a positive environmental test are
currently in partial compliance with this provision. Of the major
plans, only the Pennsylvania and Maryland plans have followup testing
provisions that are largely the same as this provision (Ref. 99).
According to ``Chicken and Eggs'' (Ref. 98), egg production in Maryland
and Pennsylvania accounted for 9.7 percent of the U.S. total. Only 85
percent of the eggs in these States fall under the State quality
assurance programs. We therefore estimate that 8.2 percent (9.7 percent
x 85 percent) of all eggs are currently in partial compliance. Because
farms with fewer than 3,000 layers are not currently in these quality
assurance programs, we assume that no farms with fewer than 3,000
layers conduct followup egg tests.
    Even farms in compliance with the Pennsylvania and Maryland plans
are not currently in full compliance with the provision described in
this section. This provision would require that batches of 1,000 eggs
be tested, while the Pennsylvania and Maryland plans only require 480
eggs to be tested in each batch. Farms on either the Pennsylvania or
the Maryland plans are only 48 percent (480 / 1000) in compliance with
the provision.
    These numbers suggest that the current net level of compliance with
the provision is 0 percent for farms with fewer than 3,000 layers and
3.9 percent (8.2 percent x 48 percent) for farms with more than 3,000
layers.
    iii. Egg testing costs. The cost of followup egg testing is
composed of the following: (1) The labor cost of collecting the eggs,
(2) the value of the eggs being tested, (3) the cost of shipping the
eggs to a qualified laboratory, and (4) the lab costs of testing the
eggs.
    The cost of collecting the eggs is the hourly cost of labor times
the number of hours spent collecting the eggs. We assume that it will
take the typical farmhand approximately one-half minute per egg to
randomly select eggs for testing, so the labor cost of egg testing is
$146.74 per 1,000 eggs tested (50 samples x 20 eggs per sample x 0.0083
hours per egg x $17.68 dollars per hour) (Ref. 107).
    The lost value of the eggs used for testing is the number of eggs
tested times the value of an unpacked egg. To avoid the double counting
of the cost of diversion (for those eggs being tested), we modify this
value to account for the fact that as many as 26 percent of eggs being
tested may be under required diversion at the time of testing. The
price that the typical producer receives for table eggs is about $0.43
per dozen, while the price a producer receives for diverted eggs is
about $0.26 per dozen eggs (See table 23). The expected value of a
diverted egg is the weighted average of the value of a table egg and a
diverted egg, or about $0.03 per egg.\54\ The value of the eggs tested
is the value per egg times the number of eggs tested. The value of
every 1,000 eggs tested is $32.47.
---------------------------------------------------------------------------
 
    \54\ The following calculation is used to reach this figure.
[(74 percent of farms not under diversion x $0.46 per dozen table
eggs) + (26 percent of eggs under diversion x $0.26 per dozen
diverted eggs)] / 12 eggs in a dozen = $0.03 per egg.
---------------------------------------------------------------------------
 
    Eggs that are collected will have to be shipped to a laboratory for
analysis. The cost of shipping these eggs depends on the weight of the
eggs being shipped. We estimate that 1,000 large eggs weigh
approximately 111 pounds. The cost of shipping these eggs in two 60-
pound packages (including packing) to the laboratory is approximately
$179.50.\55\
---------------------------------------------------------------------------
 
    \55\ The cost of shipping a 60-pound package overnight is
between $64.50 and $115.00, including pickup charges (Ref. 118). We
multiply the average cost of shipping ($89.75) by 2 to obtain the
total cost of $179.50.
---------------------------------------------------------------------------
 
    The largest cost of egg testing is the laboratory; we estimate the
lab cost for 1 batch of 20 eggs to be $30 (Ref. 111). Hence, for 50
tests the laboratory cost of eggs testing is $1,500 per 1,000 eggs
tested (50 batches x $30 per test).
    The total cost of egg testing is the sum of each of the previously
stated costs. Therefore, the cost of egg testing is $1,859 per 1,000
eggs tested ($146.74 collection costs + $32.47 lost income from egg
sales + $179.50 shipping costs + $1,500 lab costs).
    l. Diversion. i. Diversion provisions. Under this provision, farms
that test positive for SE in their eggs would be required to divert
their eggs to breaker plants until they are able to show via testing
that SE is not present in the eggs produced in the infected house. Both
the expected level of diversion and the expected cost of diversion will
vary by each operation's location and size.
    ii. Regional differences in the cost of diversion. Regional
differences in the
 
[[Page 56875]]
 
cost of production have led to the centralization of the breaker
industry in the North Atlantic and North Central regions of the United
States. As table 22 of this document shows, these regions are
responsible for only 52 percent of overall egg production, but over 86
percent of breaker eggs.\56\ The centralization of the breaker industry
is even more cogently illustrated in the fourth column of table 22 of
this document. While 36 to 44 percent of eggs make it to breaker plants
in the northern regions, the corresponding figures for the west and
south are only 10 percent and 6 to 7 percent. The primary purpose of
breaker plants outside of the North appears to be as an outlet for eggs
not suitable for retail sale as table eggs.
---------------------------------------------------------------------------
 
    \56\ In table 22 of this document, the number of eggs produced
includes hatching eggs as well as table eggs. Because most hatching
eggs are produced in the South and hatching eggs do not go to
breaker plants, the percentages of eggs going to breaker plants are
biased downward for the southern regions.
 
                                   Table 22.--Production and Breaking of Eggs
----------------------------------------------------------------------------------------------------------------
                                            Eggs Produced                Eggs Broken
                                    --------------------------------------------------------   Percent of Eggs
               Region                  Millions of                Thousands of                Produced That Are
                                         Eggs\1\       Percent      Dozens\2\      Percent          Broken
----------------------------------------------------------------------------------------------------------------
North Atlantic                               10,106       12.31         300,406       17.12              35.67
----------------------------------------------------------------------------------------------------------------
North Central                                32,869       40.03       1,212,758       69.12              44.28
----------------------------------------------------------------------------------------------------------------
South Atlantic                               13,979       17.03          69,774        3.98               5.99
----------------------------------------------------------------------------------------------------------------
South Central                                14,512       17.68          84,071        4.79               6.95
----------------------------------------------------------------------------------------------------------------
West                                         10,636       12.95          87,662        5.00               9.89
----------------------------------------------------------------------------------------------------------------
Total                                        82,102      100          1,754,671      100.00              25.65
----------------------------------------------------------------------------------------------------------------
\1\ National Agricultural Statistical Services (NASS) (Ref. 98).
\2\ NASS (Ref. 127).
 
    To predict how the industry will respond to a provision mandating
diversion, it is important to know the following reasons: (1) Why the
breaker egg industry is regionally concentrated while the shell egg
industry is distributed more evenly throughout the United States and
(2) why the concentration has occurred in the northern regions of the
United States.
    There are a couple of reasons why the breaker industry is
centralized and the shell egg industry is not. First, it is much more
expensive to transport shell eggs than it is to transport egg products.
Shell eggs are relatively bulky and are susceptible to breakage in
transit. Second, shell eggs are ultimately delivered directly to
consumers in their natural state, while egg products are often used as
ingredients in large-scale food manufacturing operations. Since
processed foods are less costly to transport than are their
ingredients, it makes sense to locate processed foods facilities in
areas where ingredients are locally available. To the extent that these
ingredients are available in the northern regions, processed food
plants will locate there. Consequently, it makes sense to locate
breaker plants in this region as well.
    If centralization of breaker plants is going to occur, it will
likely occur in the northern regions, for several reasons. The cost of
egg production is lowest in the north, partly because feed grains (such
as corn and wheat) are locally available at low prices in this
region.\57\ Also, farms in the north are more likely to be
characterized by large in-line houses (up to 250,000 layers). These
houses take advantage of economies of scale to produce more eggs more
cheaply. Furthermore, since the demand for egg products is higher in
the northern regions, breaker plants can avoid the high transportation
costs of shipping to food processors by locating closer to their
customers.
---------------------------------------------------------------------------
 
    \57\ Shipping grains from the Midwest to the West Coast by rail
can cost over $1 per bushel (Ref. 128).
---------------------------------------------------------------------------
 
    The implication of the industry structure, as laid out above, is
that there are likely to be regional disparities in the cost of
diversion. Egg products and, hence, breaker egg prices are not expected
to vary regionally by as much as shell egg prices. Where the cost of
egg production is high (such as in California), the cost of diversion
is likely to be high. Similarly, where the price of egg production is
low (such as in Ohio and Pennsylvania), the cost of diversion is likely
to be low. Furthermore, there are some remote areas, such as Hawaii,
where the absence of breaker plants makes local diversion infeasible.
Because it is not economical to ship these eggs to breaker plants in
the continental United States, the cost of diversion is simply the lost
value of a clean table egg.
    FDA met with industry representatives in each of the above regions
and was given estimates of diversion costs that are consistent with the
above reasoning. The diversion cost per dozen eggs in PA was estimated
to be insignificant while the diversion cost in CA was estimated to be
$0.21 to $0.42 per dozen.
    iii. Effect of operation size on diversion costs. Operation size
can have a significant effect on average diversion costs for a given
producer. A large producer is less likely to be affected by an
individual house that tests positive, because the risk is generally
spread across many houses and farm sites. Furthermore, in areas where
it is economically feasible to produce eggs that are dedicated to
breaker plants, large operations are less likely to have contract
problems because they can simply substitute SE-positive eggs for the
eggs that originally were contracted to go to the breaker plant. By
contrast, the economic losses from a positive house may be devastating
to a small farm with one house.
    iv. Effect of SE-positive status on diversion costs. It has been
suggested that eggs from an SE-positive flock will command a lower
price at the breaker than will other eggs. Indeed, some concern has
been raised over whether, because of liability concerns, breakers will
be willing to accept these eggs. The
 
[[Page 56876]]
 
pasteurization process for breaker eggs is designed to achieve at least
a 5-log reduction in any SE that may be in eggs. Furthermore, eggs from
an SE-positive flock are not explicitly labeled as such under this
provision. However, because these eggs are limited in how they may be
used, SE-positive eggs are intrinsically less valuable than SE-negative
eggs.
    Contracts for both table and breaker eggs are generally in place
before a specific flock is tested for SE. Producers with SE-positive
flocks may therefore have to break existing contracts for table eggs
and make new contracts for breaker eggs. This new contracting not only
will be costly in its own right, but also may send a signal to packers
that the eggs that are being supplied under these new contracts are
more likely to be from an SE-positive flock. To some extent, the packer
will take this possibility into account and purchase these eggs at a
discount.
    v. Cost of a diverted egg. Given all of the factors stated in the
previous paragraphs, we estimate that, on average, breaker eggs from an
SE-positive flock will command a price below that received for shell
eggs. Table 23 illustrates the prices that producers receive for shell
and breaker eggs by region. As expected, the North Central region, with
its proximity to inexpensive feed and a large food processing industry,
has the highest level of production, the lowest prices for eggs, and
the lowest cost for diversion. The West, with its higher feed costs and
smaller layer houses, has the highest prices for eggs and the highest
cost of diversion. We find the weighted average cost of diversion to be
approximately $0.13 per dozen eggs. If there is an additional discount
for those eggs with SE, the total cost could rise as high as $0.21 per
dozen eggs.
 
                                     Table 23.--Total Cost of Diverting Eggs
----------------------------------------------------------------------------------------------------------------
                                                                          Breaking
             Region                Regional Weight   Shell Egg Price      Eggs(Nest      Cost of Diversion (Nest
                                       (in %)        to Producer\1\        Run)\2\                Run)
----------------------------------------------------------------------------------------------------------------
North Atlantic                             12.3              $0.42             $0.31    $0.11
----------------------------------------------------------------------------------------------------------------
North Central                              40.0              $0.39             $0.30    $0.09
----------------------------------------------------------------------------------------------------------------
South Atlantic                             17.0              $0.43             $0.31    $0.12
----------------------------------------------------------------------------------------------------------------
South Central                              17.7              $0.47             $0.30    $0.17
----------------------------------------------------------------------------------------------------------------
West                                       13.0              $0.53             $0.31    $0.22
----------------------------------------------------------------------------------------------------------------
Average Cost of Diverting Eggs\3\                                                       $0.13
---------------------------------------------------------------------------------------
Additional Discount for SE+ Eggs (Ref. 111)                                             $0.00 - 0.08
---------------------------------------------------------------------------------------
Total Cost of Diverting Eggs                                                            $0.13 - 0.21
----------------------------------------------------------------------------------------------------------------
\1\ The shell egg price paid to producers for the North Central Region was estimated as equivalent to the prices
  Agricultural Marketing Service (AMS) reported as paid in Iowa, Minnesota, and Wisconsin. For regions other
  than the North Central Region, the shell egg price to the producer was calculated by discounting the price to
  retailer by a percentage equal to the percent difference between the price to the producer and the price to
  retailer in the North Central Region. All figures were taken from AMS data accessed through The Institute of
  Food and Agricultural Services at the University of Florida (Ref. 129).
\2\ All figures are from AMS data accessed through the North Carolina Department of Agriculture (Ref. 130).
\3\ The average cost of diverting eggs is weighted by regional production (Ref. 98).
 
    vi. Expected cost of diversion. The expected cost of diversion is
determined by the cost of diverting an egg, the number of eggs in
commerce affected by the provision, and the probability that a given
egg will be diverted.
    m. A model of testing and diversion costs. i. The model. We use a
dynamic model for estimating testing and diversion costs. We model
these costs as depending on the probability of SE detection, farm size,
molting practices, and the farmer's choice between conducting followup
egg tests and diverting until depopulation.
    In the first stage of the model, we estimate the probabilities
associated with environmental and egg tests. For environmental tests,
we estimate that 9.7 percent of all flocks currently test positive. We
then adjust this estimate downwards to 8.4 percent initially and 7.1
percent eventually to account for the expected reduction of SE on the
farm due to adoption of other provisions to reduce SE. In the
experience of Pennsylvania, a flock with at least one environmental
positive is likely to have at least one egg test positive 26 percent of
the time (Ref. 131). We do not know if the experience of Pennsylvania
is representative of the nation as a whole. In the absence of better
information, we used the Pennsylvania figure.
    In the next stage of the dynamic model, the expected cost of
testing and diversion is calculated for farms in each of the five size
categories used throughout this analysis. There are two reasons why
this is a necessary step. First, the estimation of cost for different
size categories allows for the explicit representation of the fact that
both the number of tests required and the cost of diversion are
directly related to the number of layers on the farm. Second, using
different size categories facilitates an algebraic model design that
uses logical operators to allow farmers (in the model) to make the low
cost choice between egg testing and diversion.
    Molting practices are accounted for in the next stage. The
different testing protocols for molted and non-molted layers makes it
necessary to look at the cost of testing and diversion separately for
each of these types of flocks. At this stage of the model, we set out
the possible scenarios for testing and diversion, derive the expected
cost of each scenario, and calculate the statistical probability that
each scenario will occur. The mathematical model for this stage is
contained in appendices A and B of this document.
    In the final stage of the testing cost model, we insert logical
operators into the model in such a way that farmers are given the
choice of diverting rather than testing eggs when it is cost-efficient
to do so. Failure of the model to give the farmer this choice may lead
to estimated costs that are up to double the actual expected costs.\58\
---------------------------------------------------------------------------
 
    \58\ A further refinement of the model would be to include the
option of depopulating the flock and starting over with a new flock.
There is a large degree of uncertainty over whether this is feasible
given that the growing cycle of chicks and pullets must be
coordinated with the laying cycle of flocks. Therefore, we did not
include this option in our analysis. For the final rule we invite
comment on the feasibility of this option.
 
---------------------------------------------------------------------------
 
[[Page 56877]]
 
    ii. The costs of testing and diversion. The model described in the
previous paragraph produces estimates of the annual expected cost of
testing and diversion for layer houses. Estimates are obtained for each
of the size categories by molting practice.
    As tables 24 and 25 in this document illustrate, the expected costs
of testing and diversion for a poultry house range from $150 to $3,760
depending on house size, environmental testing protocol, and molting
practices.\59\ The low figures in the environmental testing and total
cost columns represent costs given the row-based sampling scheme, while
the high estimates represent the random swab sampling method. The costs
for molted houses are annualized for the purpose of comparison.
---------------------------------------------------------------------------
 
    \59\ Tables 24 and 25 of this document present the cost
estimates for houses based on the current estimated prevalence of
SE. In the total cost tables (26 and 27 of this document), we also
present an estimate that reflects the expected prevalence following
the full implementation of this rule.
 
                                  Table 24.--Cost Per House (Non-Molted Flocks)
----------------------------------------------------------------------------------------------------------------
    Farm Size (No. of
         layers)          Environmental Testing  Egg Testing   Diversion   Dynamic Total Cost  Static Total Cost
----------------------------------------------------------------------------------------------------------------
Fewer than 3,000          $150 to $1,400                  $0           $4  $154 to $1,404       $1,010 to $2,260
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999           $540 to $1,400                  $0         $750  $1,290 to $2,150     $1,520 to $2,380
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999          $540 to $1,400                $620         $470  $1,630 to $2,490     $1,690 to $2,550
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999          $540 to $1,400                $860         $410  $1,810 to $2,670     $1,810 to $2,670
----------------------------------------------------------------------------------------------------------------
Over 100,000              $540 to $1,400                $860         $760  $2,160 to $3,020     $2,170 to $3,020
----------------------------------------------------------------------------------------------------------------
 
 
                                    Table 25.--Cost Per House (Molted Flocks)
----------------------------------------------------------------------------------------------------------------
    Farm Size (No. of
         layers)          Environmental Testing  Egg Testing   Diversion   Dynamic Total Cost  Static Total Cost
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999           $540 to $1,400                $610         $640  $1,800 to $2,650     $1,920 to $2,780
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999          $540 to $1,400                $900         $690  $2,130 to $2,990     $2,180 to $3,040
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999          $540 to $1,400                $920         $700  $2,170 to $3,030     $2,360 to $3,210
----------------------------------------------------------------------------------------------------------------
Over 100,000              $540 to $1,400              $1,050         $940  $2,530 to $3,370     $2,900 to $3,760
----------------------------------------------------------------------------------------------------------------
 
    The inclusion of a choice to opt out of egg testing also results in
egg testing costs increasing with farm size. The choice to opt out of
egg testing significantly increases diversion costs for smaller farms
while having a limited effect on larger farms.\60\ This difference is
apparent in the comparison between dynamic total costs and static total
costs. If the incentive to switch from egg testing into diversion were
removed, the costs incurred would be the static total costs.
Nonetheless, diversion costs also generally rise with farm size.
---------------------------------------------------------------------------
 
    \60\ It is never in the interest of the smallest farms to test
eggs because the expected cost of testing exceeds the revenue loss
from simply diverting all eggs for the life of the flock.
---------------------------------------------------------------------------
 
    Whether or not a farmer chooses to molt the flock also has an
effect on cost. The annual cost of testing and diversion for a molted
flock is greater than that for a non-molted flock, largely because a
molted flock forced to divert for the life of the flock is expected to
experience diversion for a longer time. In the dynamic model, where the
farmer can opt out of testing, molting has a secondary effect of
increasing egg-testing costs due to the high expected cost of opting
out.
    For comparison with dynamic costs, the static cost of testing and
diversion is included in the final column of tables 24 and 25 of this
document. As expected, when the producer is given the choice of opting
out of egg testing the total cost of testing and diversion falls. The
savings to the farmer are greatest on the smallest farms, where
expected costs may fall by over 75 percent.\61\ On the largest farms,
it is less economical to divert, and thus the cost savings can be
insignificant.
---------------------------------------------------------------------------
 
    \61\ This conclusion assumes that the farmer will be paying all
of the costs of testing and diversion.
---------------------------------------------------------------------------
 
    To obtain the total cost of testing and diversion for all houses on
all farms we multiplied the cost per house in each category by the
number of houses in each category and the percentage of houses that
would be affected by the provision. These costs are summarized in
tables 26 and 27 of this document.
 
            Table 26.--Total Cost of Testing and Diversion: Row-Based Sampling (Thousands of Dollars)
----------------------------------------------------------------------------------------------------------------
   Farm Size (No. of       No. of      Percent     Environmental
        layers)            Houses       Molted        Testing       Egg Testing      Diversion      Total Cost
----------------------------------------------------------------------------------------------------------------
Fewer than 3,000             33,824            0          $5,006              $0            $122          $5,129
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999               3,155           28          $1,268            $513          $2,088          $3,869
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999              1,317           65            $529          $1,017            $736          $2,282
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                861           86            $346            $756            $523          $1,625
----------------------------------------------------------------------------------------------------------------
 
[[Page 56878]]
 
 
Over 100,000                  3,279           84          $1,317          $3,200          $2,747          $7,264
----------------------------------------------------------------------------------------------------------------
All Farms, Initially                                      $8,466          $5,487          $6,216         $20,169
----------------------------------------------------------------------------------
All Farms Eventually                                      $8,466          $4,608          $5,236         $18,310
----------------------------------------------------------------------------------------------------------------
 
 
           Table 27.--Total Cost of Testing and Diversion: Random Swab Sampling (Thousands of Dollars)
----------------------------------------------------------------------------------------------------------------
   Farm Size (No. of       No. of      Percent     Environmental
        layers)            Houses       Molted        Testing       Egg Testing      Diversion      Total Cost
----------------------------------------------------------------------------------------------------------------
Fewer than 3,000             33,824            0         $47,353              $0            $122         $47,475
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999               3,155           28          $3,269            $513          $2,088          $5,870
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999              1,317           65          $1,364          $1,017            $736          $3,117
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                861           86            $892            $756            $523          $2,171
----------------------------------------------------------------------------------------------------------------
Over 100,000                  3,279           84          $3,397          $3,200          $2,747          $9,344
----------------------------------------------------------------------------------------------------------------
All Farms, Initially                                     $56,275          $5,487          $6,216         $68,978
----------------------------------------------------------------------------------
All Farms, Eventually                                    $56,275          $4,608          $5,236         $66,119
----------------------------------------------------------------------------------------------------------------
 
    As shown in table 26 of this document, the estimated total cost of
testing and diversion is approximately $20.2 million when row-based
sampling is used. When we assume that a random swab method of
environmental sampling is used, as in table 27, the estimated costs
increase to $69.0 million. There also will be a cost associated with
reviewing and updating the SE prevention measures when a poultry house
tests positive.\62\ We assume that the review and updating would take
approximately 20 hours of supervisory labor for the typical house. We
assume that, as with plan design and implementation (see following),
farms with fewer than 3,000 layers that are subject to SE prevention
measures would not be equally burdened. We therefore assume that the
review and updating of the measures for these smaller houses would take
10 hours of supervisory labor. We estimate the total initial cost of
review and updating to be $524,900 for farms with at least 3,000 layers
(20 hours x $36.28 an hour x 8,612 larger houses x 8.4 percent of
houses testing positive) and $1,030,800 for smaller farms (10 hours x
$36.28 an hour x 33,824 smaller houses x 8.4 percent of houses testing
positive). The decline of positive houses from 8.4 percent to 7.1
percent over 4 years will be met with a corresponding decline in the
cost of prevention measure review. In particular, the total cost to
larger farms will fall to $443,700, while the total cost to very small
farms will fall to $871,300.
---------------------------------------------------------------------------
 
    \62\ All estimates related to plan design, review, and
recordkeeping are based on estimates used to calculate the cost of
HACCP for juice producers (63 FR 24253 at 24275 to 24285, May 1,
1998).
---------------------------------------------------------------------------
 
    n. Benefits of testing and diversion. While the primary purpose of
testing is to obtain an indication of the effectiveness of the farm's
SE prevention measures, the testing and diversion program would also
directly reduce SE infection by preventing SE-positive eggs from
reaching consumers. To the extent that SE-positive eggs are diverted to
pasteurization, the number of these eggs that reach the consumer in an
untreated form would decline. We estimate the benefits from diversion
using the experience of the States.
    The first key measure to be determined is the probability that the
environment of a flock will test positive. We use two sources to
estimate the current prevalence of SE-positive houses. Our first source
is the Layers study (Ref. 27), which recruited 200 farm sites to be
tested across the United States. We also use estimates based on the
experience of testing under quality assurance plans.
    The Layers study estimates that 7.1 percent of all houses are
positive for SE. Regionally, SE prevalence ranges from a low of 0
percent in the Southeast to a high of 17.2 percent in the Great Lakes
region. Nonetheless, because only 200 of an original sample of 526 farm
sites chose to participate in this phase of the study, we are hesitant
to rely solely on this figure for SE prevalence.
    Regional quality assurance programs have also collected data on SE
prevalence on the farm. As an upper bound, Pennsylvania experienced a
prevalence of 40 percent in the early 1990's (Ref. 132). As a lower
bound, we use 1 to 3 percent, which is the current prevalence of houses
with SE-positive environments in Maine (Ref. 133). We believe that
Pennsylvania's current prevalence of 7 to 9 percent (Ref. 131) is a
likely prevalence for the nation as a whole.\63\ When we put this data
into a Beta-Pert probability distribution using a uniform distribution
over 1 to 3 percent as the lower bound, 40 percent as the upper bound,
and a uniform distribution over 7 to 9 percent as the mode, or most
likely value, we estimate a national prevalence rate of 12.3 percent.
---------------------------------------------------------------------------
 
    \63\ This assumption is based on the fact that the number of
outbreaks in the Northeast (where Pennsylvania is located) has
fallen to a level equivalent with the rest of the nation (Ref. 7).
---------------------------------------------------------------------------
 
    We assume that the Layers study and quality assurance program
estimates are equally likely to be valid. Therefore, we put these
values in a uniform distribution (7 to 12.3 percent) to estimate that
9.7 percent of farms would currently test SE-positive. Based on the
experience of Pennsylvania, we estimate that 26 percent of houses that
are environmentally positive also will have eggs that test positive
(Ref. 131).
    These figures imply that 502 million eggs from farms with more than
3,000 layers and 10 million eggs from farms
 
[[Page 56879]]
 
with less than 3,000 layers,\64\ a combined 0.7 percent of all shell
eggs,\65\ would be diverted each year following the initial effective
date. Of these eggs, we expect eggs to be positive at a rate of 2.75
per 10,000 (Ref 39). Consequently, within the pool of all diverted
eggs, we estimate that an average of 138,000 SE positive eggs from
farms with more than 3,000 layers and 2,800 SE-positive eggs from farms
with fewer than 3,000 layers would be diverted annually. Given a total
estimated number of positive eggs of 1.5 million, we can estimate that
diversion would decrease the number of SE-related illnesses by 9.4
percent. This translates to potentially 46 cases of SE per year
prevented by farms with fewer than 3,000 layers and 8,883 illnesses
prevented by farms with more than 3,000 layers. For farms with 3,000 or
fewer layers the cost is $571,800 per SE case prevented. For farms with
more than 3,000 layers the cost is $2,000 per SE case prevented.
---------------------------------------------------------------------------
 
    \64\ The total cost of diversion is divided by the cost of
diversion per egg to obtain the number of eggs diverted.
    \65\ The percent of shell eggs that is diverted is determined by
dividing the number of eggs diverted by the total number of shell
eggs produced (69,771 million) as published in the USDA's Chicken
and Eggs report (Ref. 98).
---------------------------------------------------------------------------
 
    o. Summary of costs and benefits potential on-farm SE prevention
measures. Table 28 summarizes the costs and benefits of the potential
on-farm SE prevention measures. Some features of these summary
estimates are worth addressing here. First, because the effectiveness
of rodent and pest control is strongly linked to biosecurity and
cleaning and disinfecting practices, we estimated the benefits of these
provisions jointly. Second, we derive benefits without taking into
account the interdependence of all proposed provisions. Therefore,
table 28 reflects the incremental effects of each provision starting
from a baseline of no new regulation. For example, the benefits of
testing and diversion alone for large farms is 8,883 illnesses avoided
annually at a cost of $1,800 per SE case avoided. As shown in table 4,
a typical case of SE costs society roughly $17,700, assuming the VSL=$5
million, QALY=$300 thousand, and a 7 percent discount rate. Therefore,
net benefits of testing and diversion alone are $141 million annually
(8,883 cases avoided* ($17,700 - $1,800)). The benefits reported for
the provisions in table 28 can be added together, mixed and matched, to
achieve a rough upper bound estimate of the effectiveness of different
combinations of provisions. Because there is some substitutability in
benefits between some of the provisions, particularly between diversion
and rodent and pest control, the actual benefits of combinations of
provisions, as well as the proposed rule, will be somewhat smaller than
what is reflected in table 28. A rough lower bound estimate of the
incremental effect of each provision when combined with another is
shown in table 33. Third, we estimate costs and benefits separately for
farms with fewer than 3,000 layers and for farms with more than 3,000
layers.
 
Table 28.--Annual Costs, Illnesses Averted, and Cost per Illness Averted
               of Potential On-Farm Measures, by Farm Size
------------------------------------------------------------------------
                                                   Farm Size
                                     -----------------------------------
                                        <3,000 Layers     >3,000 Layers
------------------------------------------------------------------------
Costs (thousands of dollars)............................................
------------------------------------------------------------------------
  Rodent and Pest Control...........          $3,008           $21,019
                                     -----------------------------------
  Biosecurity.......................          $7,100           $15,954
                                     -----------------------------------
  Cleaning and Disinfecting.........          $1,372            $2,441
                                     -----------------------------------
  SE Monitored Chicks and Pullets...              $0.5             $87
                                     -----------------------------------
  SE Negative Feed..................            $138           $27,363
                                     -----------------------------------
  Vaccination.......................            $188           $29,261
                                     -----------------------------------
  Refrigeration.....................          $5,718           $18,120
                                     -----------------------------------
  Environmental Tests (Row Based              $5,006            $3,460
   Sampling)........................
                                     -----------------------------------
  Environmental Tests (Random                $47,353            $8,922
   Sampling)........................
                                     -----------------------------------
  Egg Tests.........................              $0            $4,608
                                     -----------------------------------
  Diversion.........................            $103            $5,133
                                     -----------------------------------
  Review of SE Prevention Measures..            $871              $444
------------------------------------------------------------------------
Cases of SE Averted (eventual)..........................................
------------------------------------------------------------------------
  Rodent and Pest Control...........             142            25,701
                                     -----------------------------------
  Biosecurity.......................      Included in Rodent Control
                                     -----------------------------------
  Cleaning and Disinfecting.........      Included in Rodent Control
                                     -----------------------------------
  SE Monitored Chicks and Pullets...             <  1                10
                                     -----------------------------------
 
[[Page 56880]]
 
 
  SE Negative Feed..................              Theoretical
                                     -----------------------------------
  Vaccination.......................               Uncertain
                                     -----------------------------------
  Refrigeration.....................              10             2,162
  Testing and Diversion.............              46             8,883
------------------------------------------------------------------------
Other Benefits..........................................................
------------------------------------------------------------------------
  Rodent Control (Feed Savings -                  $3.8            $696
   thousands of dollars)............
------------------------------------------------------------------------
Cost per Case of SE Averted (eventual - thousands of dollars)...........
------------------------------------------------------------------------
  Rodent and Pest Control...........             $80.8              $1.5
                                     -----------------------------------
  Biosecurity.......................      Included in Rodent Control
                                     -----------------------------------
  Cleaning and Disinfecting.........      Included in Rodent Control
                                     -----------------------------------
  SE Monitored Chicks and Pullets...              $0.9              $8.7
                                     -----------------------------------
  SE Negative Feed..................              Theoretical
                                     -----------------------------------
  Vaccination.......................               Uncertain
                                     -----------------------------------
  Refrigeration.....................            $571.8              $8.4
                                     -----------------------------------
  Testing and Diversion.............            $559.4              $1.8
------------------------------------------------------------------------
 
2. Administrative Measures
    FDA has considered a number of administrative requirements that
could be applied to farms. The provisions that we considered are
examined below. Some, but not all, of the provisions are in the
proposed rule. The costs and benefits of the provisions that are in the
proposed rule are summarized in section V.F.
    a. Plan design and recordkeeping. i. Plan design and recordkeeping
provisions. We consider a provision that each farm site that sells raw
eggs to the table egg market, other than directly to the consumer,
design and monitor an SE prevention plan. If required, this prevention
plan would include all measures the farm is taking to prevent SE in its
flock. The following information includes potential components of the
plan: (1) Chicks and pullets, (2) biosecurity, (3) rodent and other
pest control, (4) cleaning and disinfecting, (5) feed, and (6)
refrigeration. Recordkeeping may also be a provision of the plan.
Records could be required for each of the provisions included in the
plan, as well as for testing results. Farms may be required to have a
trained or experienced supervisor that would be responsible for
overseeing the plan.
    ii. Current industry practices--plan design and recordkeeping. We
assume that those farms that are currently operating according to
recognized industry or State quality assurance plans are already
largely in compliance with the plan design and recordkeeping provisions
discussed in this section, and therefore would not experience
additional costs to comply with record keeping provisions. Using data
from the Layers study (Refs. 25 and 26), we find that 59 percent of
farms with more than 50,000 layers are currently members of State or
industry quality assurance plans. Fewer than 8 percent of farms with
fewer than 50,000 layers are currently members of quality assurance
plans.\66\ The estimated number of farms and houses affected by plan
design and recordkeeping provisions is shown in table 29 of this
document.
---------------------------------------------------------------------------
 
 
    \66\ We do not have data on participation by farms with fewer
than 3,000 layers. We assume that none of these farms are currently
members of recognized quality assurance programs.
 
                      Table 29.--Farms Affected by Plan Design and Recordkeeping Provisions
----------------------------------------------------------------------------------------------------------------
 Farm Size (No. of                                        Percent of Farms  Farms Affected by   Houses Affected
      layers)           No. of Farms     Houses Per Farm   on a QA Program     the Proposal     by the Proposal
----------------------------------------------------------------------------------------------------------------
Fewer than 3,000                33,824            1.0               0.0                33,824             33,824
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999                  2,337            1.4               4.9                 2,223              3,000
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999                   940            1.4              27.7                   680                952
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                   359            2.4              58.0                   151                361
----------------------------------------------------------------------------------------------------------------
 
[[Page 56881]]
 
 
100,000 or more                    443            7.4              59.7                   179              1,322
----------------------------------------------------------------------------------------------------------------
All Farms                       37,903            1.1              97.8                37,055             39,459
----------------------------------------------------------------------------------------------------------------
 
    As table 29 of this document shows, we expect that a total of
37,055 farm sites with 39,459 poultry houses would be affected by plan
design and recordkeeping provisions, if required.
    iii. Plan design costs. In table 30 of this document we estimate
the cost of designing a prevention plan and the corresponding cost of
keeping records of plan performance. Because information on the costs
of designing the QA plan for eggs is not available, we base these costs
on assumptions used to analyze the design of HACCP programs (63 FR
24253 at 24275 to 24285, May 1, 1998). In particular, we assume that
each farm measure will take approximately 20 hours to design. Farms
with fewer than 3,000 layers are generally less complex. For these
farms, we assume that it will take only 10 hours to design each
component of the plan. We assume that the labor used to design the plan
costs $18.14 an hour (Ref. 134). We double this figure to account for
overhead. The cost of designing a plan with one component for a farm
with less than 3,000 layers is expected to be $363, while the cost to
larger farms is expected to be $726. Amortized over 10 years at 7
percent, the total cost of plan design to small farms is expected to be
$1,747,100 per required provision, while the cost to larger farms will
be $333,900 per provision. Amortized over 10 years at 3 percent, the
total cost of plan design to small farms is expected to be $1,438,600
per required provision, while the cost to larger farms will be $274,900
per provision.
 
                                  Table 30.--Cost of Plan Design per Provision
----------------------------------------------------------------------------------------------------------------
                                                         Farms Affected by
               Farm Size (No. of layers)                    the Proposal      Cost Per Farm       Total Costs
----------------------------------------------------------------------------------------------------------------
Fewer than 3,000                                                    33,824               $363        $12,271,200
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                      2,223               $726         $1,612,700
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999                                                       680               $726           $493,400
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                       151               $726           $109,300
----------------------------------------------------------------------------------------------------------------
100,000 or more                                                        179               $726           $129,585
----------------------------------------------------------------------------------------------------------------
All Farms                                                           37,055  .................        $14,616,100
----------------------------------------------------------------------------------------------------------------
Amortized Over 10 Years at 7%                                                                         $2,081,000
----------------------------------------------------------------------------------------------------------------
 
    The total cost of plan design will depend on the number of on-farm
provisions that are ultimately required by the proposed rule.
    iv. Recordkeeping costs. In table 31 of this document, we estimate
the cost of keeping records for one proposed provision for all poultry
houses.
 
                               Table 31.--Cost of Recordkeeping for One Provision
----------------------------------------------------------------------------------------------------------------
                                                          Houses Affected    Annual Cost Per     Recordkeeping
               Farm Size (No. of layers)                  by the Proposal         House              Costs
----------------------------------------------------------------------------------------------------------------
Fewer than 3,000                                                    33,824               $472        $15,952,600
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                      3,000               $943         $2,830,200
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999                                                       952               $943           $897,900
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                       361               $943           $341,100
----------------------------------------------------------------------------------------------------------------
100,000 or more                                                      1,322               $943         $1,246,600
----------------------------------------------------------------------------------------------------------------
All Farms                                                           39,459  .................        $21,268,400
----------------------------------------------------------------------------------------------------------------
 
    We assume that the time required for recordkeeping is equivalent to
the time necessary to monitor and document the provisions of a HACCP
plan (63 FR 24253 at 24275 to 24286). Because the HACCP time estimate
upon which we are basing our estimate involves multiple controls points
and monitoring, this assumption tends to overstate the cost of
recordkeeping for a provision of this proposal. In particular, we
expect that, for each house affected,
 
[[Page 56882]]
 
recordkeeping will take one half an hour per week per required
provision. At $18.14 an hour, doubled to reflect overhead costs, the
cost of recordkeeping would be $943 ($18.14 x 52). We estimate that
farms with fewer than 3,000 layers will have costs that are
approximately half of those of larger farms. Our reasoning is further
explained in section V.F.3 of this document.
    b. Training. We are considering a provision that the person
responsible for overseeing the SE prevention measures be trained or
have equivalent job experience. A training course would last 2 to 3
days. The cost of taking a course consists of tuition, the cost of the
supervisor's labor while in class, and any travel related expenditures
that may be incurred.
    The cost of a recent 3-day HACCP training course for egg processors
was advertised to be $450 to $550 (Ref. 135). The cost of the
supervisor's labor is estimated to be $1,161 (32 hours\67\ x $36.28 an
hour).
---------------------------------------------------------------------------
 
    \67\ The number of hours is estimated as 24 hours of class time
plus 8 hours of travel time.
---------------------------------------------------------------------------
 
    Travel expenditures consist of transportation, hotel, and
miscellaneous expenses. These costs range from insignificant
(reimbursement for minimal mileage) to $1,000 ($400 airfare + $400
hotel expenses + $200 expenses). We believe that most training will be
relatively close to where producers are located. In addition, training
is likely to take place in rural areas where lodging is relatively
inexpensive. Therefore, we estimate that the most likely travel expense
will be roughly $200 to $300. We use a Beta-Pert distribution to
estimate that the expected cost of travel is $330.
    The average cost of attending a training class is estimated to be
$1,991 ($500 tuition + $1,161 labor + $330). Not all producers will
have to send a supervisor to a class. The 12 percent of large farms
already on quality assurance programs will have a trained supervisor
already running the program. Of the remaining farms, some have
experienced personnel who do not need formal training. Without better
information, we assume that the true number of establishments that will
need to formally train a supervisor will be uniformly distributed
between 0 and 100 percent for all sizes of farms. Therefore, we expect
16,910 farms with fewer than 3,000 layers and 1,620 farms with 3,000 or
more layers to incur training expenses. This cost will have to be
incurred only at the outset of the program, and then again when a farm
loses a trained supervisor. The total cost for all farms training a
supervisor every 10 years, amortized at 7 percent, is estimated to be
$4.8 million for very small farms and $0.5 million for larger farms.
Amortized at 3 percent, the total cost is estimated to be $4.0 million
for farms with less than 3000 layers and $0.4 million for larger farms.
    c. Registration. Under this potential provision, all farms covered
by any part of the proposed rule would be required to register with
FDA. We estimate that approximately 33,820 farms with fewer than 3,000
layers and 4,080 farms with 3,000 or more layers would be covered by a
registration provision. The cost of registration is composed of the
labor cost of learning about, obtaining, filling out, and sending the
registration form to FDA. We assume that the typical producer would
spend a total of 30 minutes registering and that the value of labor is
$18.14 per hour, doubled for overhead costs, for a total cost of $18.14
per producer. The total cost to the industry is $687,600 ($18.14 x
37,903). Amortized at 7 percent, the annual cost of registration is
expected to be $97,900. The cost to farms with fewer than 3,000 layers
would be $87,400, while the cost to farms with more than 3,000 layers
would be $10,500. Amortized at 3 percent, the annual cost of
registration is expected to be $80,600. The cost to farms with fewer
than 3,000 layers would be $71,900, while the cost to farms with more
than 3,000 layers would be $8,700.
    d. Summary of costs and benefits of administrative provisions. The
costs of administrative provisions are summarized in table 32 of this
document. These provisions do not have independently quantifiable
benefits. The provisions would be likely to generate benefits because
administrative provisions help farmers verify whether SE prevention
measures are being implemented appropriately. Early intervention on a
plan that is not being implemented appropriately could result in
corrective action to prevent SE that might otherwise occur.
Furthermore, early troubleshooting in the event that SE is found on
their farms would help farmers reduce any additional exposure from SE.
 
     Table 32.--Costs of Potential On-Farm Administrative Provisions
                         (Thousands of Dollars)
------------------------------------------------------------------------
                                                   Farm Size
                                     -----------------------------------
                                        <3,000 Layers     >3,000 Layers
------------------------------------------------------------------------
Costs (eventual)
------------------------------------------------------------------------
  Plan Design                            $1,747 per         $334 per
                                          Provision         Provision
------------------------------------------------------------------------
  Recordkeeping                          $15,953 per       $5,316 per
                                         record kept       record kept
------------------------------------------------------------------------
  Training                            $4,800            $459
------------------------------------------------------------------------
  Registration                        $87               $11
------------------------------------------------------------------------
 
3. Summary of On-Farm SE Prevention and Administrative Measures
    Table 33 of this document shows the estimated costs and benefits
for all of the on-farm SE prevention measures that we have considered.
These totals include covering farms with fewer than 3,000 layers. The
total costs and benefits of all of these prevention measures represent
the costs and benefits of the regulatory option (described previously)
of more extensive on-farm controls. Table 33 can also be used to
illustrate the costs and lower bound incremental benefits of individual
provisions or combinations of provisions. Because table 33 shows the
effects of each provision when all are enacted, and the interdependence
of rodent and pest control, biosecurity, cleaning and disinfecting, and
testing and diversion is accounted for, these estimates can be added
together, mixed and matched, to
 
[[Page 56883]]
 
achieve a rough estimate of the lower bound effects of different
combinations of provisions. Between table 28 and table 33, a bounded
estimate of the incremental effect of each provision is achieved. For
example, testing and diversion will cost farms with more than 3,000
layers an incremental amount between $1,800 and $2,600 per illness
avoided.
 
Table 33.--Summary of Annual Costs and Benefits of On-Farm SE Prevention
                     Measures (Thousands of dollars)
------------------------------------------------------------------------
                                                  Farm Size
                                   -------------------------------------
                                          <3,000             >3,000
------------------------------------------------------------------------
On-Farm Measures
------------------------------------------------------------------------
Costs (thousands of dollars)        .................  .................
------------------------------------------------------------------------
  Rodent and Pest Control           $3,008             $21,019
------------------------------------------------------------------------
  Biosecurity                       $7,100             $15,954
------------------------------------------------------------------------
  Cleaning and Disinfecting         $1,372             $2,441
------------------------------------------------------------------------
  SE Monitored Chicks and Pullets   $0.5               $87
------------------------------------------------------------------------
  SE Negative Feed                  $138               $27,363
------------------------------------------------------------------------
  Vaccination                       $188               $29,261
------------------------------------------------------------------------
  Refrigeration                     $5,718             $18,200
------------------------------------------------------------------------
  Environmental Tests (Row Based    $5,006             $3,460
   Sampling)
------------------------------------------------------------------------
  Environmental Tests (Random       $47,353            $8,922
   Sampling)
------------------------------------------------------------------------
  Egg Tests                         $0                 $4,608
------------------------------------------------------------------------
  Diversion                         $103               $5,133
------------------------------------------------------------------------
  Review of SE Prevention Plan      $871               $444
------------------------------------------------------------------------
Cases of SE Averted (eventual)
------------------------------------------------------------------------
  Rodent and Pest Control           142                25,701
------------------------------------------------------------------------
  Biosecurity                       .................  .................
------------------------------------------------------------------------
  Cleaning and Disinfecting         .................  .................
------------------------------------------------------------------------
  SE Monitored Chicks and Pullets   < 1                 10
------------------------------------------------------------------------
  SE Negative Feed                  Theoretical        Theoretical
------------------------------------------------------------------------
  Vaccination                       Uncertain          Uncertain
------------------------------------------------------------------------
  Refrigeration                     7                  1,427
------------------------------------------------------------------------
  Testing and Diversion             33                 6,296
------------------------------------------------------------------------
Other Benefits
------------------------------------------------------------------------
  Rodent Control (Feed Savings--    3.8                696
   thousands of dollars)
------------------------------------------------------------------------
Cost per Case of SE Averted (eventual--thousands of dollars)
------------------------------------------------------------------------
  Rodent and Pest Control           $80.8              $1.5
------------------------------------------------------------------------
  Biosecurity                       Included in        Included in
                                     Rodent Control     Rodent Control
------------------------------------------------------------------------
  Cleaning and Disinfecting         Included in        Included in
                                     Rodent Control     Rodent Control
------------------------------------------------------------------------
  SE Monitored Chicks and Pullets   1                  8.7
------------------------------------------------------------------------
  SE Negative Feed                  Theoretical        Theoretical
------------------------------------------------------------------------
  Vaccination                       Uncertain          Uncertain
------------------------------------------------------------------------
  Refrigeration                     816.9              12.8
------------------------------------------------------------------------
 
[[Page 56884]]
 
 
  Testing and Diversion\1\          822.8              2.6
------------------------------------------------------------------------
Administrative Measures
------------------------------------------------------------------------
  Plan Design (Assumes 11           $19,217            $3,674
   Provisions)
------------------------------------------------------------------------
  Recordkeeping (Assumes 7 Records  $111,671           $37,212
   Kept)
------------------------------------------------------------------------
  Training                          $4,800             $459
------------------------------------------------------------------------
  Registration                      $87                $11
------------------------------------------------------------------------
\1\ Assumes the average cost for environmental testing between random
  and row based sampling, assuming either type of test is equally
  likely.
 
4. Retail Provisions
    a. Coverage. We considered whether Federal SE prevention measures
should cover retail establishments that specifically serve highly
susceptible populations. Establishments possibly covered would include
nursing homes, child and adult day care centers, senior centers, and
hospitals. The 2001 Model Food Code recommends additional safeguards
for these establishments.
    b. SE prevention measures at retail. i. Provisions. Under the
measures we considered, establishments that specifically serve
consumers from highly susceptible populations would be required to
comply with certain provisions in the Food Code that we describe in
section IV.D of this document. Those provisions for which we have
adequate information to estimate costs and benefits would require that
the previously mentioned establishments:
    <bullet> Use only eggs that are clean, sound, contain no more
restricted eggs than the proportion allowed in U.S. Consumer Grade B,
and have been transported at an ambient temperature of 45 [deg]F or
below;
    <bullet> Use pasteurized eggs or egg products in dishes that will
be undercooked; and
    <bullet> Substitute pasteurized eggs or egg products for raw shell
eggs in dishes in which two or more eggs are broken and combined,
unless the eggs are broken, combined, thoroughly cooked, and served
immediately or are broken, combined, and used immediately as an
ingredient in products (such as cookies or muffins) that will be
thoroughly cooked.
    ii. Current state and industry practices--institutions serving
highly susceptible populations. These potential provisions are
currently contained in the 2001 FDA Food Code (Refs. 136, 137, and
138). To date, 41 of 56 states and territories have adopted some
version (1993 or later) of the FDA Food Code. Actual coverage is
complicated, because the states and territories that have adopted the
FDA Food Code do not necessarily follow all of the provisions, and
states that have not adopted the FDA Food Code may have other
regulations that have provisions that provide the same level of
protection for highly susceptible populations.
    iii. Costs of retail SE prevention measures. Two costs would occur
if the retail SE prevention measures applicable to establishments that
specifically serve highly susceptible populations were included in a
final rule. First, covered retail establishments would incur increased
costs from using pasteurized eggs and egg products in place of raw
shell eggs. Second, covered retail establishments would incur costs
from training employees to hold, prepare, and cook raw eggs properly.
    If retail establishments used pasteurized shell eggs in place of
unpasteurized shell eggs, they would pay more for their eggs ($0.35 per
dozen) (Ref. 139). We do not know how many establishments would choose
to do so. Alternatively, retail establishments could choose to use
pasteurized egg products in place of unpasteurized shell eggs. If this
option were chosen, the cost of this provision would be the cost
differential between shell eggs and pasteurized egg products. We ask
for comments regarding what these costs would be.
    While there are no provisions that specifically require the
training of food service industry employees, we believe that employers
would choose to train their employees to hold, prepare, and cook raw
eggs in accordance with these provisions. We also ask for comments
regarding what these costs would be.
    iv. Benefits of retail SE prevention measures. If all
establishments serving highly susceptible populations were to implement
these SE prevention measures through either Food Code adoption by
states and territories (or other governments) or Federal regulations,
we would expect to largely eliminate SE illnesses due to eggs and egg
dishes served at these establishments. The USDA Salmonella Enteritidis
Risk Assessment estimated that 24.7 percent of egg-related SE illness
occurs from eggs consumed in institutions (Ref. 15). We assume this
proportion to hold for highly susceptible and other consumers. The SE
risk assessment also calculates that 50.4 percent of the population
that becomes ill from SE comes from the highly susceptible
population.\68\ We therefore expect that a total of 12.4 percent (24.7
percent x 50.4 percent) of SE illnesses fall into the category of
highly susceptible consumers who ate contaminated egg dishes at
institutions. We do not know where highly susceptible consumers eat the
eggs that make them ill. If we assume that half of these illnesses
occur in institutions that specifically serve highly susceptible
populations, these retail provisions would reduce illness due to SE
contaminated eggs by 6.2 percent. We do not have robust estimates of
the costs and benefits associated with those provisions.
---------------------------------------------------------------------------
 
    \68\ The Salmonella Enteritidis Risk Assessment's
``susceptible'' populations and the Food Code's ``highly
susceptible'' populations served by institutions are roughly
equivalent. The SE risk assessment defines susceptible populations
to include pregnant women, infants, the elderly, and
immunocompromised persons. Children, the elderly, and
immunocompromised persons could all be in institutions serving
highly susceptible populations.
---------------------------------------------------------------------------
 
F. Summary of Benefits and Costs of the Proposed Rule
 
    In the previous section of this document, we described and
estimated the benefits and costs of all of the SE
 
[[Page 56885]]
 
prevention measures we have considered. Here, we summarize and estimate
the benefits and costs of the proposed rule.
1. Coverage
    The proposed rule would only apply to farms with at least 3,000
layers that do not have all of their eggs treated, do not sell all of
their eggs directly to consumers, and produce shell eggs for the table
market. Farms in this category would be required to comply with all
parts of the proposed rule. No retail establishments are directly
affected by the proposed rule, because no retail establishments would
be covered by the proposed rule.
2. Provisions in the Proposed Rule
    a. On-Farm preventive controls. Many of the on-farm preventive
controls examined above are included in this proposed rule. Provisions
included in the proposed rule are rodent and pest control, biosecurity,
cleaning and disinfecting, and procurement of chicks and pullets from
SE-monitored breeders.
    b. On-Farm SE prevention measures. The proposed rule also contains
most of the on-farm SE prevention measures described above. In
particular, the refrigeration, sampling, testing, and diversion
provisions are included in the proposed rule.
    c. Administrative provisions. Some of the administrative provisions
we considered are also required by the proposed rule. In particular,
records for all environmental and egg sampling and testing must be
kept. Furthermore, farms must keep records indicating compliance with
diversion requirements.
    Farms are required to use SE prevention measures but are not
required to have a formal written SE prevention plan. We believe that
many farms will choose to implement a written plan. Each farm is
required to have a trained or otherwise qualified individual to
administer the prevention measures required by the proposed rule.
3. Summary of Costs and Benefits
    In table 34 of this document, we summarize the costs and illnesses
averted of this proposed rule and its provisions. After the on-farm
adjustment phase (up to 4 years), we expect costs to fall and illnesses
averted to increase. Eventually, the proposed rule will prevent
approximately 33,430 cases of SE per year at a cost of $2,200 per
illness averted. This value is less than the most conservative estimate
(one that does not account for the pain and suffering of arthritis) of
the expected value of an SE related illness, shown in table 5 of this
document. Furthermore, though not listed in table 34, we also
calculated the cost per estimated QALY saved. Assuming a 7-percent
discount rate, we estimate the proposed rule will save approximately
1,870 QALYs annually. Assuming a 3-percent discount rate the estimated
number QALYs saved annually is 3,410. This translates to $39,400 per
QALY saved using a 7 percent discount rate and $21,600 per QALY saved
using a 3 percent discount rate.\69\ Either estimate falls well below
our most conservative estimate of $100,000 for the value of a quality
adjusted statistical life year.
---------------------------------------------------------------------------
 
    \69\ QALD's were converted back to QALYs for each possible
outcome by dividing by 365. Annual QALYs lost for a case chronic
arthritis (0.14) and death (1.0) were summed and subsequently
discounted (at 3 percent and 7 percent) over 50 years.
 
      Table 34.--Summary of Annual Costs and Illnesses Averted of the Proposed Rule (Thousands of Dollars)
----------------------------------------------------------------------------------------------------------------
                                              Costs               Illnesses Averted     Cost per Illness Averted
             Provision             -----------------------------------------------------------------------------
                                      Initial      Eventual     Initial      Eventual     Initial      Eventual
----------------------------------------------------------------------------------------------------------------
On-Farm Measures
----------------------------------------------------------------------------------------------------------------
  Procurement of SE-Monitored               $87          $87           10           10         $8.7         $8.7
   Chicks and Pullets
----------------------------------------------------------------------------------------------------------------
  Rodent and Pest Control               $21,019      $21,019       12,851       25,703         $3.1         $1.5
----------------------------------------------------------------------------------------------------------------
  Biosecurity                           $15,594      $15,594        --\1\        --\1\
----------------------------------------------------------------------------------------------------------------
  Cleaning and Disinfecting              $2,899       $2,441        --\1\        --\1\
----------------------------------------------------------------------------------------------------------------
 
  Refrigeration                         $18,200      $18,200        1,693        1,426        $10.8        $12.8
----------------------------------------------------------------------------------------------------------------
  Environmental Testing (Average)        $5,861       $5,861      --\2,3\      --\2,3\
----------------------------------------------------------------------------------------------------------------
  Egg Testing                            $5,487       $4,608        --\2\        --\2\
----------------------------------------------------------------------------------------------------------------
  Review of Program                        $525         $444        --\2\        --\2\
----------------------------------------------------------------------------------------------------------------
  Diversion                              $6,094       $5,133        7,559        6,294         $2.4         $2.5
================================================================================================================
Administrative Measures
----------------------------------------------------------------------------------------------------------------
  Program Management                     $2,672       $2,672           --           --
----------------------------------------------------------------------------------------------------------------
  Recordkeeping                          $5,316       $5,316           --           --
----------------------------------------------------------------------------------------------------------------
  Training                                 $459         $459           --           --
================================================================================================================
Total                                   $84,213      $81,834       22,113       33,433         $3.8         $2.4
----------------------------------------------------------------------------------------------------------------
\1\ Estimated rodent control benefits also include benefits from biosecurity and cleaning and disinfecting.
\2\ The benefits from all elements of the testing and diversion program are reported jointly under diversion.
\3\ The environmental testing cost number reported is the average of the costs of the random swab and row based
  sampling methods.
 
 
[[Page 56886]]
 
    The mean estimated dollar values of the benefits, the complete
range and discussion of which is presented in section V.E.4 of this
document and shown in table 37 of this document, range from $82 million
to $1.65 billion, depending on the assumptions made about VSL, QALY,
and the discount rate. Although the lowest mean estimated benefits are
close to the mean estimated costs, these estimated benefits do not
capture the health effects of chronic reactive arthritis sufferers. The
most plausible estimated benefits values lie between $250 million and
$1 billion, well above expected costs. The mean of all of the estimates
is $580 million and most closely corresponds to the assumption set with
VSL = $5 million, VSLY = $300 thousand, and the discount rate = 7
percent. Thus, at the mean, net benefits are roughly $500 million
annually. Considering the plausible range of benefits and costs, net
benefits of the proposed rule could be as low as $130 million annually
and as high as $950 million annually.
    As noted previously, the benefits of some provisions in the
proposed rule are slightly lower in table 34 of this document than are
the benefits listed in the analysis of potential provisions. This
difference arises from the fact that each provision in the proposed
rule reduces the base line number of illnesses that is used to estimate
the benefits of the next provision in the list. In the benefits
estimates for potential provisions, by contrast, the base line number
of illnesses due to SE in shell eggs is fixed at the total number of
illnesses estimated for 2001.
    Table 34 of this document illustrates that we have not explicitly
determined the benefits for the administrative provisions. The
administrative provisions enhance the effectiveness of the SE
prevention measures mandated by the rule, and the benefits are
therefore embedded in the benefits estimates for each control measure.
    In table 34 of this document, we include a cost for program
management, because we assume that some management will be necessary to
plan and carry out the provisions of the proposed rule. We assume that
program management costs will be roughly equal to the cost of the
potential plan design with eight provisions. We ask for comment on this
assumption.
    The recordkeeping costs in table 34 of this document are based on
the requirement to keep testing, sampling, and diversion records. The
cost of this requirement is assumed to be equal to the cost of one
record, as presented in table 31 of this document. As discussed in
section V.E.2.a.iv of this document, this estimated cost is likely to
overestimate the true cost of keeping testing and diversion records.
The recordkeeping costs calculated above are estimated for the typical
record that a farm might keep. A typical record is assumed to reflect
routine monitoring of a facet of an SE prevention program. Sampling,
testing, and diversion records are only collected at the time that
testing or diversion is taking place. We ask for comment regarding the
actual burden of keeping records associated with the testing and
diversion provisions of the proposed rule.
4. Analysis of Uncertainty
    In table 34 of this document and elsewhere we present the expected
effects of the proposed rule as point estimates. While this is a
convenient way to summarize the effects of individual provisions and
alternative regulatory options, the use of point estimates neglects the
large degree of uncertainty intrinsic to the underlying analysis. In
table 35 of this document, we present the results of a Monte Carlo
simulation of uncertainty for the eventual annual costs of the proposed
rule. Results are reported for the 5th and 95th percentiles, as well as
for the mean value. Because many uncertainties could not be measured,
this table should not be seen as a complete characterization of the
uncertainty underlying the analysis. Nonetheless, table 35 of this
document is a good illustration of the effect of the uncertainties we
know to exist. Based on the data for which we have been able to
characterize uncertainty, we believe that the eventual annual cost of
the proposed rule will lie between $50 million and $1.12 billion. We
outline descriptions of the distributions used to measure the
uncertainties accruing to each provision in appendix C of this
document.
 
              Table 35.--Costs of the Proposed Rule: Analysis of Uncertainty (Thousands of Dollars)
----------------------------------------------------------------------------------------------------------------
                                                           5th Percentile          Mean         95th Percentile
----------------------------------------------------------------------------------------------------------------
On-Farm Measures
----------------------------------------------------------------------------------------------------------------
  SE Monitoring of Chicks and Pullets                                  $23                $87               $176
----------------------------------------------------------------------------------------------------------------
  Rodent and Pest Control                                          $11,389            $21,019            $32,916
----------------------------------------------------------------------------------------------------------------
  Biosecurity                                                      $15,290            $15,594            $15,894
----------------------------------------------------------------------------------------------------------------
  Cleaning and Disinfecting                                         $1,190             $2,441             $5,567
----------------------------------------------------------------------------------------------------------------
  Refrigeration                                                    $11,850            $18,120            $24,844
----------------------------------------------------------------------------------------------------------------
  Environmental Testing                                             $2,361             $5,861            $10,794
----------------------------------------------------------------------------------------------------------------
  Egg Testing                                                       $3,407             $4,608             $9,186
----------------------------------------------------------------------------------------------------------------
  Review of Program                                                   $330               $444               $875
----------------------------------------------------------------------------------------------------------------
  Diversion                                                         $3,811             $5,133            $10,071
----------------------------------------------------------------------------------------------------------------
Administrative Measures
----------------------------------------------------------------------------------------------------------------
  Program Management                                                $2,672             $2,672             $2,672
----------------------------------------------------------------------------------------------------------------
  Recordkeeping                                                     $4,481             $5,316             $6,833
----------------------------------------------------------------------------------------------------------------
  Training                                                             $44               $459               $912
----------------------------------------------------------------------------------------------------------------
 
[[Page 56887]]
 
 
Total                                                              $54,924            $81,754           $123,407
----------------------------------------------------------------------------------------------------------------
 
    In tables 36 and 37 of this document, we characterize the
uncertainties associated with the benefits of the proposed rule. A
description of the distributions underlying the estimates in tables 36
and 37 can be found in appendix C. The expected annual benefits in
terms of illness averted from the proposed rule range from nearly
21,300 SE illnesses averted to more than 49,500 cases of SE illnesses
averted.
 
                   Table 36.--Illnesses Averted by the Proposed Rule: Analysis of Uncertainty
----------------------------------------------------------------------------------------------------------------
                                                                                                       95th
                            Provision                             5th Percentile       Mean         Percentile
----------------------------------------------------------------------------------------------------------------
On-Farm Measures
----------------------------------------------------------------------------------------------------------------
  SE Monitoring of Chicks and Pullets                                          7              10              15
----------------------------------------------------------------------------------------------------------------
  Rodent and Pest Control                                                 16,329          25,703          38,082
----------------------------------------------------------------------------------------------------------------
  Biosecurity                                                               Included in Rodent Control
----------------------------------------------------------------------------------------------------------------
  Cleaning and Disinfecting                                                 Included in Rodent Control
----------------------------------------------------------------------------------------------------------------
  Refrigeration                                                              914           1,426           2,125
----------------------------------------------------------------------------------------------------------------
  Testing and Diversion                                                    4,020           6,294           9,281
----------------------------------------------------------------------------------------------------------------
Total                                                                     21,270          33,433          49,503
----------------------------------------------------------------------------------------------------------------
 
    Table 37 of this document shows that the estimated annual benefits
in constant 2001 dollars range from $52.4 million to $2.45 billion. The
large range is due in great part to the uncertainties underlying the
economic assumptions. Although the lower bound estimate of expected
benefits overlaps the upper bound of expected costs, it is safe to say
that nearly all of the estimated distributions of benefits exceed the
expected costs. Under very reasonable economic assumptions, the
expected benefits of the proposed rule exceed the expected costs.
 
Table 37.--Estimated Value of All Illnesses Averted, Given Different Economic Assumptions (Thousands of Dollars)
----------------------------------------------------------------------------------------------------------------
                                                        Discount Rate = 3%
----------------------------------------------------------------------------------------------------------------
                                 VSL = $5 million                               VSL = $6.5 million
----------------------------------------------------------------------------------------------------------------
                                                       95th                                            95th
                  5th percentile       Mean         percentile     5th prcentile       Mean         percentile
----------------------------------------------------------------------------------------------------------------
VSLY = $0                $56,276         $88,457        $130,975         $69,950        $109,950        $162,799
----------------------------------------------------------------------------------------------------------------
VSLY = $100             $252,790        $397,344        $588,333              --              --              --
 thousand
----------------------------------------------------------------------------------------------------------------
VSLY = $300             $645,816      $1,015,119      $1,503,048        $659,490      $1,036,611      $1,534,872
 thousand
----------------------------------------------------------------------------------------------------------------
VSLY = $500                   --              --              --      $1,052,516      $1,654,385      $2,449,587
 thousand
----------------------------------------------------------------------------------------------------------------
 
 
----------------------------------------------------------------------------------------------------------------
                                                        Discount Rate = 7%
----------------------------------------------------------------------------------------------------------------
                                 VSL = $5 million                               VSL = $6.5 million
----------------------------------------------------------------------------------------------------------------
                                                       95th                                            95th
                  5th percentile       Mean         percentile     5th prcentile       Mean         percentile
----------------------------------------------------------------------------------------------------------------
VSLY = $0                $52,406         $82,373        $121,967         $66,079        $103,866        $153,791
----------------------------------------------------------------------------------------------------------------
VSLY = $100             $161,703        $254,170        $376,341              --              --              --
 thousand
----------------------------------------------------------------------------------------------------------------
VSLY = $300             $380,296        $597,764        $885,087        $393,970        $619,257        $916,911
 thousand
----------------------------------------------------------------------------------------------------------------
VSLY = $500                   --              --              --        $612,564        $962,851      $1,425,657
 thousand
----------------------------------------------------------------------------------------------------------------
\1\ VSL means value of a statistical life.
\2\ VSLY value of a statistical life year.
 
 
[[Page 56888]]
 
    Tables 35 through 37 of this document present the results of Monte
Carlo simulations that treat the costs and benefits as distributions
rather that as point estimates. The tables show that the range of
potential costs is much narrower than the range of potential benefits.
One additional component of costs not captured in the simulation
involves enforcement costs. If FDA or States devote additional
resources to inspections as a result of this rule, then the costs of
those increased resources must be included in the total costs of the
rule. FDA estimates that the potential social cost of increased
inspections carried out by FDA or by States in cooperation with FDA,
including costs of inspections, re-inspections, egg testing, training,
education, assistance, additional staff, and operating costs, is $8
million per year. The egg safety program costs increase the expected
annual costs of the proposed rule to $90 million.
    The monetary estimates of benefits cover a broad range. The range
is largely generated by the different values placed on cases of chronic
reactive arthritis that result from SE illness. The higher the value of
a statistical life year used to value the health effects of chronic
reactive arthritis, the higher the estimated monetary benefits of this
proposed rule. If the health effects of reactive arthritis are excluded
from the estimated benefits, as in the first 4 rows of table 37 of this
document, then the benefits and cost of the proposed rule are of
approximately the same magnitude: the distribution of costs and
benefits overlap and we cannot definitively conclude that the benefits
exceed costs. Once the health effects of preventing chronic reactive
arthritis are included, however, even the 5th percentile estimated
benefits easily exceed estimated costs.
 
VI. Initial Regulatory Flexibility Analysis
 
A. Introduction
 
    FDA has examined the economic implications of this proposed rule as
required by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a
proposed rule has a significant economic impact on a substantial number
of small entities, the Regulatory Flexibility Act requires agencies to
analyze regulatory options that would lessen the economic effect of the
proposed rule on small entities.
 
B. Economic Effects on Small Entities
 
1. Number of Small Entities Affected
    The Small Business Administration (SBA) defines chicken and egg
producers to be small if their total revenues are less than $9 million
(65 FR 30836 at 30841, May 15, 2000). A producer that receives $0.45
per dozen eggs and has layers that produce 265 eggs per year would have
to have over 900,000 layers in production to earn revenues of over $9
million. While there are a number of producers that fall into this
category, the vast majority of the farms affected by this proposed rule
are considered to be small by SBA standards.
    We estimate that approximately 8 percent of producers that are
identified by the standard industrial classification (SIC) codes and
the North American Industry Classification System (NAICS) as chicken
and egg producers are large by SBA definition.\70\ However, because the
smallest egg producers are not classified by SIC or NAICS codes, we
believe that fewer than 8 percent of egg producers actually fit the SBA
definition of ``large.''
---------------------------------------------------------------------------
 
    \70\ Data are drawn from Dun and Bradstreet's financial records
using the Dialog database (Ref. 140).
---------------------------------------------------------------------------
 
2. Costs to Small Entities
    The on-farm portion of the proposed rule will result in significant
costs to small businesses. In this PRIA we have estimated costs by farm
size. These costs are presented in table 38 of this document. For the
industry as a whole, the annual cost of the proposed rule is estimated
to be $2,157 per farm site. This translates into a cost of $0.32 per
egg layer.
 
                                  Table 38.--Distribution of Cost by Farm Size
----------------------------------------------------------------------------------------------------------------
                                                    Per Farm Cost of Proposed       Per Layer Cost of Proposed
           Farm Size (No. of layers)                         Rule\1\                           Rule
----------------------------------------------------------------------------------------------------------------
Less than 3,000                                                               $0                          $0
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                          $11,779                          $1.01
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999                                                         $13,364                          $0.47
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                         $24,412                          $0.35
----------------------------------------------------------------------------------------------------------------
100,000 or more                                                          $74,266                          $0.19
----------------------------------------------------------------------------------------------------------------
All Farms                                                                 $2,157                          $0.32
----------------------------------------------------------------------------------------------------------------
\1\ These figures are drawn from the Preliminary Regulatory Impact Analysis (PRIA). In the PRIA not all costs
  are explicitly broken out by farm size. In this case, we assume that costs are either: (1) Equal for all farms
  (training and registration), (2) scaled to the number of houses per farm site (cleaning and disinfecting for
  flocks with more than 3,000 layers, biosecurity, and plan review in the case of a positive), or (3) scaled to
  the number of layers per farm site (National Poultry Improvement Plan SE monitored chicks and feed).
 
C. Regulatory Options
 
1. Exemption for Small Entities
    a. Exemption for all small entities. One possible approach to
reduce the impact on small entities would be to exempt all small
entities from the rule. Although this would significantly reduce costs,
it would also significantly reduce benefits. As mentioned above, under
the SBA size standards the vast majority of farms affected by this
proposed rule are small. Small farms include not only farms with a few
hundred layers, but also some larger farms with over 100,000 layers.
This exemption would lead to a significant reduction in the benefits
estimated for the proposed rule.
    The alternative approach implemented in the proposed rule exempts
farms with fewer than 3,000 layers.\71\ While over 89 percent of the
farm sites covered by this rule have fewer than 3,000 layers, less than
1 percent of the eggs produced in the
 
[[Page 56889]]
 
United States are produced on these farms.
---------------------------------------------------------------------------
 
    \71\ An exemption for farms with fewer than 3,000 birds is
consistent with the exemption given by the EPIA for egg farms that
are also egg processors.
---------------------------------------------------------------------------
 
    FDA has decided to exempt all farms with fewer than 3,000 layers
from all provisions of this proposed rule. By exempting these farms, we
reduce expected benefits by less than one percent while reducing
expected costs by half.
    We also exempt from all parts of the proposed rule those farms that
sell all of their eggs directly to consumers.
2. Longer Compliance Periods
    We recognize that it may be more difficult for some small farms to
learn about and implement these SE prevention measures than it will be
for other farms. FDA is therefore proposing to give farm sites with
3,000 or more but fewer than 50,000 layers, 2 years (as opposed to 1
year for larger farm sites) to comply with this proposed rule.
 
D. Description of Recordkeeping and Recording Requirements
 
    The Regulatory Flexibility Act requires a description of the
recordkeeping required for compliance with this proposed rule. We
require recordkeeping for the sampling, testing, and diversion
provisions of the proposed rule. The cost of recordkeeping is exhibited
in table 39 of this document. How recordkeeping costs are calculated is
detailed in section V.E of this document.
 
                                  Table 39.--Cost of Recordkeeping by Farm Size
----------------------------------------------------------------------------------------------------------------
                                                                                         Per Layer Cost of
          Farm Size (No. of layers)             Per Farm Cost of Recordkeeping             Recordkeeping
----------------------------------------------------------------------------------------------------------------
Less than 3,000                                                               $0                          $0
----------------------------------------------------------------------------------------------------------------
3,000 to 19,999                                                           $2,830                          $0.11
----------------------------------------------------------------------------------------------------------------
20,000 to 49,999                                                            $898                          $0.05
----------------------------------------------------------------------------------------------------------------
50,000 to 99,999                                                            $341                          $0.03
----------------------------------------------------------------------------------------------------------------
100,000 or more                                                           $1,247                          $0.02
----------------------------------------------------------------------------------------------------------------
All Farms                                                                   $135                          $0.02
----------------------------------------------------------------------------------------------------------------
 
E. Summary
 
    FDA finds that, under the Regulatory Flexibility Act (5 U.S.C.
605(b)), this proposed rule would have a significant impact on a
substantial number of small entities. More than 1,000 small farms would
be affected by the proposed rule.
 
VII. Unfunded Mandates
 
    The Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4)
requires cost-benefit and other analyses for rules that would cost more
than $100 million in a single year. The current inflation-adjusted
statutory threshold is $115 million. Since the estimated annual cost
for this proposed rule is less than $115 million, FDA has determined
that this proposed rule, if it becomes a final rule as proposed, would
not be a significant rule under UMRA.
 
VIII. Federalism
 
    FDA has analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13132 on federalism. We have
examined the effects of the requirements of this proposal for on-farm
SE prevention measures for shell egg production on the relationship
between the Federal Government and the States. The agency concludes
that preemption of State or local rules that establish requirements for
production of shell eggs that would be less stringent than Federal law
is consistent with this Executive Order. Section 3(b) of Executive
Order 13132 recognizes that Federal action limiting the policymaking
discretion of States is appropriate ``where there is constitutional and
statutory authority for the action and the national activity is
appropriate in light of the presence of a problem of national
significance.'' The constitutional basis for FDA's authority to
regulate the safety and labeling of foods is well established.
    Section 4(a) of Executive Order 13132 expressly contemplates
preemption where the exercise of State authority conflicts with the
exercise of Federal authority under a Federal statute. Moreover,
section 4(b) of Executive Order 13132 authorizes preemption of State
law by rulemaking when the exercise of State authority directly
conflicts with the exercise of Federal authority under the Federal
statute or there is clear evidence to conclude that Congress intended
the agency to have the authority to preempt State law.
    State and local laws and regulations that would impose less
stringent requirements for production of shell eggs would undermine the
agency's goal of ensuring that shell eggs are produced using measures
that will prevent their contamination with SE and, thus, reduce the
risk of foodborne illness. The proposed requirements for production of
shell eggs are the minimal prevention measures that we believe are
necessary to ensure safety.
    The proposed rule would establish national minimum prevention
measures with respect to production of shell eggs. However, the egg
production requirements of this proposed rule do not preempt State and
local laws, regulations, and ordinances that establish more stringent
requirements with respect to production requirements. As required by
the Executive order, States and local governments will be given,
through this notice of proposed rulemaking, an opportunity to
participate in the proceedings to preempt State and local laws. In
addition, appropriate officials and organizations will be consulted
before this proposed action is implemented; the agency plans to have
public meetings specifically addressing the issue of implementation of
these proposed regulations. The agency consulted with a working group
comprised of State officials in developing the provisions of this
proposed rule and plans to continue to consult with this group in the
development of a final rule. In addition, we sent facsimiles of a
Federal Register document announcing a public meeting on egg safety and
the availability of egg safety ``current thinking'' documents prepared
by FDA and USDA to Governors, State health and agriculture
commissioners, State attorneys general, and State food program
coordinators.
 
IX. Environmental Impact
 
    The agency has determined under 21 CFR 25.30(j) that this action is
of a type
 
[[Page 56890]]
 
that does not individually or cumulatively have a significant effect on
the human environment. Therefore, neither an environmental assessment
nor an environmental impact statement is required.
 
X. Paperwork Reduction Act of 1995
 
    This proposed rule contains information collection provisions that
are subject to review by OMB under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520). A description of these provisions is given in
the following paragraphs with an estimate of the annual recordkeeping
burden. Included in the estimate is the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing each
collection of information.
    FDA invites comments on these topics: (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 the agency'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 the use of automated collection techniques, when appropriate,
or other forms of information technology.
    Title: Control of Salmonella Enteritidis in Shell Eggs During
Production--Recordkeeping Provisions Under Proposed Part 118.
    Description: FDA is proposing to require shell egg producers to
implement SE measures to prevent SE from contaminating eggs on the
farm. We are only proposing recordkeeping provisions for the sampling,
testing and diversion requirements for shell egg producers.
    We have tentatively concluded that recordkeeping is necessary for
the success of the SE prevention measures. Records of testing and
diversion will assist FDA in determining if the farm in question
currently has a problem with SE and is making an effort to ameliorate
any problem it might have. FDA's statutory authority for these proposed
requirements is discussed in section III.L of this document.
    Description of Respondents: Businesses or other for profit
organizations.
    FDA estimates the burden of this collection of information as
follows:
 
                               Table 40.--Estimated Annual Recordkeeping Burden\1\
----------------------------------------------------------------------------------------------------------------
                         No. of        Annual Frequency     Total Annual        Hours per
  21 CFR Section     Recordkeepers     of Recordkeeping       Records          Recordkeeper       Total Hours
----------------------------------------------------------------------------------------------------------------
118.10                         5,635                  1              5,635                 26            146,510
----------------------------------------------------------------------------------------------------------------
Total                                                                                                    146,510
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.
 
    The burden estimates in table 40 in this document are based on
estimates of the total number of layer houses affected by this proposed
rule from statistics obtained from the NASS. Individual burdens were
obtained by estimating the number of layer houses affected by each
portion of the proposed rule and multiplying it by the corresponding
number of records required annually and the hours needed to complete
the record. These burden estimates are an estimate of the hours needed
to complete each record contained in the agency's PRIA prepared for
this proposed rule.
    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)), the agency has submitted the information collection
provisions of this proposed rule to OMB for review. Interested persons
are requested to submit comments regarding information collection to
OMB, via facsimile on 202-395-6974, Attn: Desk Officer for FDA.
 
XI. Comments
 
    Submit written comments regarding this proposal to the Division of
Dockets Management (see ADDRESSES), unless comments regard information
collection. Submit electronic comments to http://www.fda.gov/dockets/ecomments.
 Submit comments regarding information collection to OMB (see
 
ADDRESSES). Submit a single copy of electronic comments or two copies
of any mailed comments, except that individuals may submit one paper
copy. Comments are to be identified with the docket number found in
brackets in the heading of this document. Received comments may be seen
in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday
through Friday.
 
XII. References
 
    The following references have been placed on display in the
Division of Dockets Management (see ADDRESSES) and may be seen by
interested persons between 9 a.m. and 4 p.m., Monday through Friday.
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    109. Halvorson, David A., Good Management Practices for
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Facility Biosecurity, Texas Agricultural Extension Service, 1997.
    111. Morales, R. A. and R. M. McDowell, ``Chapter 25: Economics
Consequences of Salmonella enterica Serovar Enteritidis Infection in
Humans and the U.S. Egg Industry'' in Salmonella enterica Serovar
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Ames, IA, 1999.
    112. E-mail Correspondence between Robert Scharff, FDA, and
Andrew Rhorer, August 15, 2000.
    113. Rhorer, A. R., ``Chapter 27: Control of Salmonella enterica
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List of Subjects
 
21 CFR Part 16
 
    Administrative practice and procedure.
 
21 CFR Part 118
 
    Eggs and egg products, Incorporation by reference, Recordkeeping
requirements, Safety.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and the
Public Health Service Act, and under the authority delegated to the
Commissioner of Food and Drugs, it is proposed that 21 CFR chapter I be
amended as follows:
 
PART 16--REGULATORY HEARING BEFORE THE FOOD AND DRUG ADMINISTRATION
 
    1. The authority citation for 21 CFR part 16 continues to read as
follows:
 
    Authority: 15 U.S.C. 1451-1461; 21 U.S.C. 141-149, 321-394,
467f, 679, 821, 1034; 28 U.S.C. 2112; 42 U.S.C. 201-262, 263b, 364.
    2. Section 16.5 is amended by adding paragraph (a)(5) to read as
follows:
 
 
Sec.  16.5  Inapplicability and limited applicability.
 
    (a) * * *
    (5) A hearing on an order for diversion or destruction of shell
eggs under section 361 of the Public Health Service Act (42 U.S.C.
264), and Sec.  118.12 of this chapter.
* * * * *
    3. Part 118 is added to read as follows:
 
PART 118--PRODUCTION AND STORAGE OF SHELL EGGS
 
Sec.
118.1 Shell egg producers covered by the requirements in this part.
118.3 Definitions.
118.4 Salmonella Enteritidis (SE) prevention measures.
118.5 Environmental testing for Salmonella Enteritidis (SE).
118.6 Egg testing for Salmonella Enteritidis (SE).
118.7 Sampling methodology for Salmonella Enteritidis (SE).
118.8 Testing methodology for Salmonella Enteritidis (SE).
118.9 Administration of the Salmonella Enteritidis (SE) prevention
measures.
118.10 Recordkeeping requirements for the Salmonella Enteritidis
(SE) prevention measures.
118.12 Enforcement and compliance.
 
    Authority: 21 U.S.C. 321, 331-334, 342, 371, 381, 393; 42 U.S.C.
243, 264, 271.
 
 
Sec.  118.1   Shell egg producers covered by the requirements in this
part.
 
    If you are a shell egg producer with 3,000 or more laying hens at a
particular farm that does not sell all of your eggs directly to
consumers and that produces shell eggs for the table market, you are
covered by some or all of the requirements in this part, as follows:
    (a) If any of your eggs that are produced at the particular farm do
not
 
[[Page 56894]]
 
receive a treatment as defined in Sec.  118.3, you must comply with all
of the requirements of this part for egg production on that farm.
    (b) If all of your eggs that are produced at the particular farm
receive a treatment as defined in Sec.  118.3, you must comply only
with the refrigeration requirements in Sec.  118.4 for production of
eggs on that farm.
 
 
Sec.  118.3   Definitions.
 
    The definitions and interpretations of terms in section 201 of the
Federal Food, Drug, and Cosmetic Act (the FFDCA) (21 U.S.C. 321) are
applicable to such terms when used in this part, except where they are
redefined in this part. The following definitions also apply:
    Biosecurity means a program, including limiting visitors to poultry
houses, keeping small animals out of poultry houses, and requiring
personnel to wear protective clothing, to ensure that there is no
introduction or transfer of Salmonella Enteritidis (SE) onto a farm or
among poultry houses.
    Farm means all poultry houses and grounds immediately surrounding
the poultry houses covered under a single biosecurity program.
    Flock means all laying hens within one poultry house.
    Group means all laying hens of the same age within one poultry
house.
    Induced molting means molting that is artificially initiated.
    Laying cycle means the period of time that a hen begins to produce
eggs until it undergoes induced molting or is permanently taken out of
production and the period of time that a hen produces eggs between
successive induced molting periods or between induced molting and the
time that the hen is permanently taken out of production.
    Molting means a life stage during which hens stop laying eggs and
shed their feathers.
    Pest means any objectionable animals or insects including, but not
limited to, birds, rodents, flies, and larvae.
    Positive flock means a flock that has had an egg test that was
positive for SE and applies until that flock meets the egg testing
requirements in Sec.  118.6(b) to return to table egg production.
    Positive poultry house means a poultry house from which there has
been an environmental test that was positive for SE during any of the
laying cycles of a group in the poultry house until that house is
cleaned and disinfected according to Sec.  118.4(d).
    Poultry house means a building, other structure, or separate
section within one structure used to house poultry. For structures
comprising more than one section containing poultry, each section is
enclosed and separated from the other sections, and each section has a
biosecurity program in place to ensure that there is no introduction or
transfer of SE from one section to another.
    Producer means a person who maintains laying hens for the purpose
of producing shell eggs for human consumption.
    Shell egg (or egg) means the egg of the domesticated chicken.
    Treatment means a technology or process that achieves at least a 5-
log destruction of SE for shell eggs, or the processing of egg products
in accordance with the Egg Products Inspection Act.
 
 
Sec.  118.4   Salmonella Enteritidis (SE) prevention measures.
 
    You must have SE prevention measures that are specific for each
farm where you produce eggs and that include, at a minimum, the
following:
    (a) Chicks and pullets. You must procure chicks and pullets that
came as chicks from SE-monitored breeder flocks that meet the National
Poultry Improvement Plan's standards for ``U.S. S. Enteritidis
Monitored'' status (9 CFR 145.23(d)) or equivalent standards.
    (b) Biosecurity. You must develop and implement a biosecurity
program. The biosecurity program must include the grounds and all
facilities at each farm. As part of this program you must:
    (1) Limit visitors on the farm and in the poultry houses;
    (2) Ensure that equipment that is moved among poultry houses is
kept clean and is not a source of SE contamination;
    (3) Ensure the proper hygiene of persons that move between poultry
houses through use of protective clothing and sanitizing stations, or
other appropriate means that will protect against cross contamination;
    (4) Prevent stray poultry, wild birds, and other animals from
entering grounds and facilities; and
    (5) Not allow employees to keep poultry at home.
    (c) Rodents, flies, and other pest control. You must develop and
implement a pest and rodent control program to reduce the rodent, fly
and other pest populations in your poultry house(s). As part of this
program, you must:
    (1) Monitor for rodents by visual inspection and mechanical traps
or glueboards or another appropriate monitoring method and, when
monitoring indicates unacceptable rodent activity within a poultry
house, use appropriate methods to achieve satisfactory rodent control;
    (2) Monitor for pests by spot cards, Scudder grills, or sticky
traps or another appropriate monitoring method and, when monitoring
indicates unacceptable pest activity within a poultry house, use
appropriate methods to achieve satisfactory pest control.
    (3) Remove debris within a poultry house and vegetation and debris
outside a poultry house that may provide harborage for pests.
    (d) Cleaning and disinfection. You must develop procedures for
cleaning and disinfecting a poultry house as outlined in paragraphs
(d)(1) through (d)(4) of this section. You must clean and disinfect the
poultry house according to these procedures before new laying hens are
added to the house, if you have had an environmental test or an egg
test that was positive for SE at any point during the life of a flock
that was housed in the poultry house prior to depopulation. As part of
the cleaning and disinfection procedures, you must:
    (1) Remove all visible manure;
    (2) Dry clean the positive poultry house to remove dust, feathers,
and old feed;
    (3) Wet clean the positive poultry house, including washing with
detergents. Use detergents according to label instructions, followed by
recommended rinsing procedures; and
    (4) Following cleaning, disinfect the positive poultry house with
spray, aerosol, fumigation, or another appropriate disinfection method.
    (e) Refrigeration. You must store eggs at or below 45 [deg]F
ambient temperature if you hold them for more than 36 hours after
laying.
 
 
Sec.  118.5   Environmental testing for Salmonella Enteritidis (SE).
 
    (a) Environmental testing when laying hens are 40 to 45 weeks of
age. As one indicator of the effectiveness of your SE prevention
measures, you must perform environmental testing for SE (as described
in Sec. Sec.  118.7 and 118.8) in a poultry house when any group of
laying hens constituting the flock within the poultry house is 40 to 45
weeks of age.
    (1) If an environmental test at 40 to 45 weeks is negative and your
laying hens do not undergo induced molting, then you do not need to
perform any additional environmental testing within that poultry house,
unless the poultry house contains more than one group of laying hens.
If the poultry house contains more than one group of laying hens, then
you must perform environmental testing on the poultry house when each
group of laying hens is 40 to 45 weeks of age.
 
[[Page 56895]]
 
    (2) If the environmental test at 40 to 45 weeks is positive, then
you must:
    (i) Review and make any necessary adjustments to your SE prevention
measures to ensure that all measures are being properly implemented and
    (ii) Begin egg testing (described in Sec.  118.6) within 24 hours
of receiving notification of the positive environmental test, unless
you divert eggs to treatment as defined in Sec.  118.3 for the life of
the flock in that poultry house.
    (b) Environmental testing after an induced molting period. If you
induce a molt in a flock or a group in a flock, you must perform
environmental testing for SE in the poultry house approximately 20
weeks after the end of any molting process.
    (1) If an environmental test approximately 20 weeks after the end
of the molting process is negative and none of your laying hens in that
poultry house is molted again, then you do not need to perform any
additional environmental testing in that poultry house. Each time a
flock or group within the flock is molted, you must perform
environmental testing in the poultry house approximately 20 weeks after
the end of the molting process.
    (2) If the environmental test approximately 20 weeks after the end
of a molting process is positive, then you must:
    (i) Review and make any necessary adjustments to your SE prevention
measures to ensure that all measures are being properly implemented;
and
    (ii) Begin egg testing (described in Sec.  118.6) within 24 hours
of receiving notification of the positive environmental test, unless
you divert eggs to treatment as defined in Sec.  118.3 for the life of
the flock in that poultry house.
 
 
Sec.  118.6   Egg testing for Salmonella Enteritidis (SE).
 
    (a) If you have an SE-positive environmental test at any time
during the life of a flock, you must divert eggs to treatment (defined
in Sec.  118.3) for the life of the flock in that positive poultry
house or conduct egg testing as specified in paragraphs (b) through (e)
of this section.
    (b) Eggs must be sampled as described in Sec.  118.7 and tested
using methodology as described in Sec.  118.8.
    (c) You must conduct four egg tests, using sampling and methodology
in Sec. Sec.  118.7 and 118.8, on the flock in the positive poultry
house at 2-week intervals. If all four tests are negative for SE, you
are not required to do further egg testing.
    (d) If any of the four egg tests is positive for SE, you must
divert, upon receiving notification of an SE-positive egg test, all
eggs from that flock to treatment (defined in Sec.  118.3) until the
conditions of paragraph (c) of this section are met.
    (e) If you have a positive egg test in a flock and divert eggs from
that flock and later meet the negative test result requirements
described in paragraph (c) of this section and return to table egg
production, you must conduct one egg test per month on that flock,
using sampling and methodology in Sec. Sec.  118.7 and 118.8, for the
life of the flock.
    (1) If all the monthly egg tests in paragraph (e) of this section
are negative for SE, you may continue to supply eggs to the table
market.
    (2) If any of the monthly egg tests in paragraph (e) of this
section is positive for SE, you must divert eggs from the positive
flock to treatment for the life of the flock or until the conditions of
paragraph (c) of this section are met.
 
 
Sec.  118.7  Sampling methodology for Salmonella Enteritidis (SE).
 
    (a) Environmental sampling. An environmental test must be done for
each poultry house in accordance with Sec.  118.5(a) and (b). Within
each poultry house, you must sample the environment using a
scientifically valid sampling procedure.
    (b) Egg sampling. When you conduct an egg test required under Sec.
118.6, you must randomly collect and test the following number of eggs
from the positive poultry house.
    (1) To meet the egg testing requirements of Sec.  118.6(c), you
must randomly collect 1,000 eggs from a day's production. The 1,000-egg
sample must be tested according to Sec.  118.8. You must randomly
collect and test four 1,000-egg samples at 2-week intervals for a total
of 4,000 eggs.
    (2) To meet the monthly egg testing requirement of Sec.  118.6(e),
you must randomly collect 1,000 eggs from a day's production per month
for the life of the flock. Eggs must be tested according to Sec.
118.8.
 
 
Sec.  118.8  Testing methodology for Salmonella Enteritidis (SE).
 
    (a) Testing of environmental samples for SE. Testing to detect SE
in environmental samples must be conducted by the method entitled
``Detection of Salmonella in Environmental Samples from Poultry
Houses'' dated January 19, 2001, (proposed for inclusion in FDA's
Bacteriological Analytical Manual) or another method that is at least
equivalent to the method cited previously in accuracy, precision, and
sensitivity in detecting SE. The Director of the Federal Register
approves the incorporation by reference ``Detection of Salmonella in
Environmental Samples from Poultry Houses'' in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. You may obtain a copy from Division of Dairy
and Egg Safety (HFS-306), Center for Food Safety and Applied Nutrition,
Food and Drug Administration, 5100 Paint Branch Parkway, College Park,
MD 20740, or you may examine a copy at the Center for Food Safety and
Applied Nutrition's Library, 5100 Paint Branch Parkway, College Park,
MD or at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, call 202-741-
6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulation/ibr_locations.html.
 
    (b) Testing of egg samples for SE. Testing to detect SE in egg
samples must be conducted according to the pre-enrichment method
described by Valentin et al., in the Journal of Food Protection, or
another method that is at least equivalent to the method cited
previously in accuracy, precision, and sensitivity in detecting SE. The
egg sampling method is incorporated by reference in accordance with 5
U.S.C. 552(a) and 1 CFR part 51. You may obtain a copy from Division of
Dairy and Egg Safety (HFS-306), Center for Food Safety and Applied
Nutrition, Food and Drug Administration, 5100 Paint Branch Parkway,
College Park, MD 20740, or you may examine a copy at the Center for
Food Safety and Applied Nutrition's Library, 5100 Paint Branch Parkway,
College Park, MD or at the National Archives and Records Administration
(NARA). For information on the availability of this material at NARA,
call 202-741-6030, or go to:
http://www.archives.gov/federal_register/code_of_federal_regulation/ibr_locations.html.
 
 
Sec.  118.9.   Administration of the Salmonella Enteritidis (SE)
prevention measures.
 
    You must have one individual at each farm who is responsible for
administration of the SE prevention measures. This individual must have
successfully completed training on SE prevention measures for egg
production that is at least equivalent to that received under a
standardized curriculum recognized by the Food and Drug Administration
or must be otherwise qualified through job experience to administer the
SE prevention measures. Job experience
 
[[Page 56896]]
 
will qualify an individual to perform these functions if it has
provided knowledge at least equivalent to that provided through the
standardized curriculum. This individual is responsible for:
    (a) Development and implementation of SE prevention measures that
are appropriate for your specific farm and meet the requirements of
Sec.  118.4;
    (b) Reassessing and modifying the SE prevention measures as
necessary to ensure that the requirements in Sec.  118.4 are met; and
    (c) Review of records created under Sec.  118.10. The individual
does not need to have performed the monitoring or created the records.
 
 
Sec.  118.10   Recordkeeping requirements for the Salmonella
Enteritidis (SE) prevention measures.
 
    (a) Records that egg producers are required to maintain. You must
maintain the following records:
    (1) Records of environmental and egg sampling performed under Sec.
118.7 and the results of SE testing performed under Sec.  118.8 as
required in Sec. Sec.  118.5 and 118.6.
    (2) Records indicating compliance with the diversion requirements
in Sec.  118.6.
    (3) Records indicating that all of the eggs at a particular farm
will be given a treatment as defined in Sec.  118.3, if you are a
producer complying with the requirements of this section as described
in Sec.  118.1(b).
    (b) General requirements for records maintained by egg producers.
All records required by Sec.  118.10(a) must include:
    (1) Your name and the location of your farm,
    (2) The date and time of the activity that the record reflects,
    (3) The signature or initials of the person performing the
operation or creating the record, and
    (4) Data and information reflecting compliance activities must be
entered on records at the time the activity is performed or observed,
and the records must contain the actual values observed, if applicable.
    (c) Length of time records must be retained. You must retain all
records required by this part at your place of business, unless stored
offsite under Sec.  118.10(d), for 1 year after the flock to which they
pertain has been taken permanently out of production.
    (d) Offsite storage of records. You may store the records required
by this part offsite after 6 months following the date that the
monitoring occurred. You must be able to retrieve and provide the
records at your place of business within 24 hours of request for
official review. Electronic records are considered to be onsite if they
are accessible from an onsite location.
    (e) Official review of records. You must have all records required
by this part available for official review and copying at reasonable
times.
    (f) Public disclosure of records. Records required by this part are
subject to the disclosure requirements under part 20 of this chapter.
 
 
Sec.  118.12  Enforcement and compliance.
 
    (a) Authority. This part is established under authority of the
Public Health Service Act (the PHS Act). Under the FFDCA, the Food and
Drug Administration (FDA) can enforce the food adulteration provisions
under 21 U.S.C. 331 through 334 and 342. Under the PHS Act (42 U.S.C.
264), FDA has the authority to make and enforce regulations for the
control of communicable diseases. FDA has established the following
administrative enforcement procedures for the diversion or destruction
of shell eggs and for informal hearings under the PHS Act:
    (1) Upon a finding that any shell eggs have been produced or held
in violation of this part, an authorized FDA representative or a State
or local representative in accordance with paragraph (c) of this
section may order such eggs to be diverted, under the supervision of
said representative, for processing in accordance with the Egg Products
Inspection Act (EPIA) (21 U.S.C. 1031 et seq.) or by a treatment that
achieves at least a 5-log destruction of SE or destroyed by or under
the supervision of an officer or employee of FDA, or, if applicable, of
the State or locality in accordance with the following procedures:
    (i) Order for diversion or destruction under the PHS Act. Any
district office of FDA or any State or locality acting under paragraph
(c) of this section, upon finding shell eggs that have been produced or
held in violation of this regulation, may serve a written order upon
the person in whose possession the eggs are found requiring that the
eggs be diverted, under the supervision of an officer or employee of
the issuing entity, for processing in accordance with the EPIA (21
U.S.C. 1031 et seq.) or by a treatment that achieves at least a 5-log
destruction of SE or destroyed by or under the supervision of the
issuing entity, within 10-working days from the date of receipt of the
order, unless, under paragraph (a)(2)(iii) of this section, a hearing
is held, in which case the eggs must be diverted or destroyed
consistent with the decision of the Regional Food and Drug Director
under paragraph (a)(2)(v) of this section. The order must include the
following information:
    (A) A statement that the shell eggs identified in the order are
subject to diversion for processing in accordance with the EPIA or by a
treatment that achieves at least a 5-log destruction of SE or
destruction;
    (B) A detailed description of the facts that justify the issuance
of the order;
    (C) The location of the eggs;
    (D) A statement that these eggs must not be sold, distributed, or
otherwise disposed of or moved except as provided in paragraph
(a)(1)(iv) of this section;
    (E) Identification or description of the eggs;
    (F) The order number;
    (G) The date of the order;
    (H) The text of this entire section;
    (I) A statement that the order may be appealed by written appeal or
by requesting an informal hearing;
    (J) The name and phone number of the person issuing the order; and
    (K) The location and telephone number of the office or agency
issuing the order and the name of its Director.
    (ii) Approval of District Director. An order, before issuance, must
be approved by FDA's District Director or the Acting District Director.
If prior written approval is not feasible, prior oral approval must be
obtained and confirmed by written memorandum as soon as possible.
    (iii) Labeling or marking of shell eggs under order. An FDA, State,
or local representative issuing an order under paragraph (a)(1)(i) of
this section must label or mark the shell eggs with official tags that
include the following information:
    (A) A statement that the shell eggs are detained in accordance with
regulations issued under section 361(a) of the PHS Act (42 U.S.C.
264(a)).
    (B) A statement that the shell eggs must not be sold, distributed
or otherwise disposed of or moved except, after notifying the issuing
entity in writing, to:
    (1) Divert them for processing in accordance with the EPIA or by a
treatment that achieves at least a 5-log destruction of SE or destroy
them, or
    (2) Move them to an another location for holding pending appeal.
    (C) A statement that the violation of the order or the removal or
alteration of the tag is punishable by fine or imprisonment or both
(section 368 of the PHS Act (42 U.S.C. 271)).
    (D) The order number and the date of the order, and the name of the
government representative who issued the order.
 
[[Page 56897]]
 
    (iv) Sale or other disposition of shell eggs under order. After
service of the order, the person in possession of the shell eggs that
are the subject of the order must not sell, distribute, or otherwise
dispose of or move any eggs subject to the order unless and until
receiving a notice that the order is withdrawn after an appeal except,
after notifying FDA's district office or, if applicable, the State or
local representative, in writing, to:
    (A) Divert or destroy them as specified in paragraph (a)(1)(i) of
this section, or
    (B) Move them to another location for holding pending appeal.
    (2) The person on whom the order for diversion or destruction is
served may either comply with the order or appeal the order to the
Regional Food and Drug Director in accordance with the following
procedures:
    (i) Appeal of a detention order. Any appeal must be submitted in
writing to FDA's District Director in whose district the shell eggs are
located within 5 working days of the issuance of the order. If the
appeal includes a request for an informal hearing, the hearing must be
held within 5 working days after the appeal is filed or, if requested
by the appellant, at a later date, which must not be later than 20
calendar days after the issuance of the order. The order may also be
appealed within the same period of 5 working days by any other person
having an ownership or proprietary interest in such shell eggs. The
appellant of an order must state the ownership or proprietary interest
the appellant has in the shell eggs.
    (ii) Summary decision. A request for a hearing may be denied, in
whole or in part and at any time after a request for a hearing has been
submitted, if the Regional Food and Drug Director or his or her
designee determines that no genuine and substantial issue of fact has
been raised by the material submitted in connection with the hearing or
from matters officially noticed. If the Regional Food and Drug Director
determines that a hearing is not justified, written notice of the
determination will be given to the parties explaining the reason for
denial.
    (iii) Informal hearing. Appearance by any appellant at the hearing
may be by mail or in person, with or without counsel. The informal
hearing must be conducted by the Regional Food and Drug Director or his
designee, and a written summary of the proceedings must be prepared by
the Regional Food and Drug Director.
    (A) The Regional Food and Drug Director may direct that the hearing
be conducted in any suitable manner permitted by law and by this
section. The Regional Food and Drug Director has the power to take such
actions and make such rulings as are necessary or appropriate to
maintain order and to conduct an informal, fair, expeditious, and
impartial hearing, and to enforce the requirements concerning the
conduct of hearings.
    (B) Employees of FDA will first give a full and complete statement
of the action that is the subject of the hearing, together with the
information and reasons supporting it, and may present oral or written
information relevant to the hearing. The party requesting the hearing
may then present oral or written information relevant to the hearing.
All parties may conduct reasonable examination of any person (except
for the presiding officer and counsel for the parties) who makes any
statement on the matter at the hearing.
    (C) The hearing shall be informal in nature, and the rules of
evidence do not apply. No motions or objections relating to the
admissibility of information and views will be made or considered, but
any party may comment upon or rebut any information and views presented
by another party.
    (D) The party requesting the hearing may have the hearing
transcribed, at the party's expense, in which case a copy of the
transcript is to be furnished to FDA. Any transcript of the hearing
will be included with the Regional Food and Drug Director's report of
the hearing.
    (E) The Regional Food and Drug Director must prepare a written
report of the hearing. All written material presented at the hearing
will be attached to the report. Whenever time permits, the Regional
Food and Drug Director may give the parties the opportunity to review
and comment on the report of the hearing.
    (F) The Regional Food and Drug Director must include as part of the
report of the hearing a finding on the credibility of witnesses (other
than expert witnesses) whenever credibility is a material issue, and
must include a recommended decision, with a statement of reasons.
    (iv) Written appeal. If the appellant appeals the detention order
but does not request a hearing, the Regional Food and Drug Director
must render a decision on the appeal affirming or revoking the
detention order within 5 working days after the receipt of the appeal.
    (v) Regional Food and Drug Director decision. If, based on the
evidence presented at the hearing or by the appellant in a written
appeal, the Regional Food and Drug Director finds that the shell eggs
were produced or held in violation of this section, he must affirm the
order that they be diverted, under the supervision of an officer or
employee of FDA for processing under the EPIA or by a treatment that
achieves at least a 5-log destruction of SE or destroyed by or under
the supervision of an officer or employee of FDA; otherwise, the
Regional Food and Drug Director must issue a written notice that the
prior order is withdrawn. If the Regional Food and Drug Director
affirms the order, he must order that the diversion or destruction be
accomplished within 10-working days from the date of the issuance of
his decision. The Regional Food and Drug Director's decision must be
accompanied by a statement of the reasons for the decision. The
decision of the Regional Food and Drug Director constitutes final
agency action, subject to judicial review.
    (vi) No appeal. If there is no appeal of the order and the person
in possession of the shell eggs that are subject to the order fails to
divert or destroy them within 10-working days, or if the demand is
affirmed by the Regional Food and Drug Director after an appeal and the
person in possession of such eggs fails to divert or destroy them
within 10-working days, FDA's district office or, if applicable, the
State or local representative may designate an officer or employee to
divert or destroy such eggs. It shall be unlawful to prevent or to
attempt to prevent such diversion or destruction of the shell eggs by
the designated officer or employee.
    (b) Inspection. Persons engaged in production of shell eggs must
permit authorized representatives of FDA to make, at any reasonable
time, an inspection of the egg production establishment in which shell
eggs are being produced. Such inspection includes the inspection and
sampling of shell eggs and the environment, the equipment related to
production of shell eggs, the equipment in which shell eggs are held,
and examination and copying of any records relating to such equipment
or eggs, as may be necessary in the judgment of such representatives to
determine compliance with the provisions of this section. Inspections
may be made with or without notice and will ordinarily be made during
regular business hours.
    (c) State and local cooperation. Under sections 311 and 361 of the
Public Health Service Act, any State or locality that is willing and
able to assist the agency in the enforcement of Sec. Sec.  118.4
through 118.10, and is authorized to inspect or regulate egg production
establishments, may, in its own jurisdiction, enforce Sec. Sec.  118.4
through
 
[[Page 56898]]
 
118.10 through inspections under paragraph (b) of this section and
through administrative enforcement remedies specified in paragraph (a)
of this section unless FDA notifies the State or locality in writing
that such assistance is no longer needed. When providing assistance
under paragraph (a) of this section, a State or locality may follow the
hearing procedures set out in paragraphs (a)(2)(iii) through (a)(2)(v)
of this section, substituting, where necessary, appropriate State or
local officials for designated FDA officials or may utilize comparable
State or local hearing procedures if such procedures satisfy due
process.
 
    Dated: September 15, 2004.
Lester M. Crawford,
Acting Commissioner of Food and Drugs.
    Note: The following appendices will not appear in the Code of
Federal Regulations.
 
Appendix A to the PRIA: Costs of Alternative Testing and Diversion
Scenarios
 
    The costs of testing and diversion depend on a number of factors,
including the probabilities of SE-positive results for environmental
and egg tests, the costs of testing and diversion, and whether the
layers are molted. FDA assumes that there are five possible scenarios
for non-molted layers and seventeen possible scenarios for molted
layers.
    Non-molted layers--all scenarios. The environmental testing costs
are calculated to be the laboratory cost of environmental testing
(CNT) plus the labor cost of collecting one test
(CNL) times the number of tests to be collected
(NNT), or:
CostNT = (CNT + CNL) x NNTS.
    Scenario 1: 40 to 45 week environmental test negative.
    <bullet> In the first scenario, the 40 to 45 week environmental
test is negative. No other tests are taken.
    <bullet> There are no egg testing or diversion costs in this
scenario.
    <bullet> The first scenario occurs with a probability
PS1 = (1 - pN1), where pN1 is the
probability that the 40 to 45 week environmental test is positive.
    Scenario 2: 40 to 45 week environmental test positive. Egg testing
negative.
    <bullet> In scenario two, a positive 40 to 45 week environmental
test triggers egg testing. All 4 of the required egg tests come up
negative. No other tests are performed.
    <bullet> This is the first scenario under which eggs will have to
be tested. The cost of an egg test is the sum of the laboratory
(CGT), labor (CGL), and lost revenue
(CGG) costs for a 20-egg test times the number of 20 egg
batches to be tested (NGT) times the number of test
collections (4). If 1,000 eggs were tested, they would be tested in 50
20-egg tests. The total cost of egg testing is therefore:
CostGT2 = (CGT + CGL + CGG) x NGT x 4.
    <bullet> There are no diversion costs in this scenario.
    <bullet> The probability that this scenario will occur is equal to
PS2 = pN1 x (1 - pG1), where
pG1 is the probability that the first egg test is positive.
    Scenario 3: 40 to 45 week environmental and first egg test
positive. Subsequent egg test negative.
    <bullet> In this scenario, a positive 40 to 45 week environmental
test triggers egg testing. One of the 4 required egg tests is positive,
and the farmer must divert. The next 4 egg tests are negative,
diversion is stopped, and eggs are tested monthly for the life of the
flock without any additional positive results.
    <bullet> In this case, there will be two sets of egg tests. In
addition, the farm will be expected to test monthly for the remaining
life of the flock (LF - 1).\1\ The total cost of egg testing is
therefore: CostGT3 = (CGT + CGL + CGG) x NGT x (8 + LF3 - 1).
---------------------------------------------------------------------------
 
    \1\ The remaining test life of the flock is LF -1 (LF is the
remaining number of months) because the last month of lay generally
produces substandard eggs that are sent to the breaker regardless of
SE status. Thus, this last month is omitted from our calculations.
---------------------------------------------------------------------------
 
    <bullet> The cost of diversion is the price differential between a
table egg and an SE-positive egg (DC) times the number of days diverted
times the number of eggs produced per day by a typical bird (0.72)
times the number of layers in a typical layer house (HS). We expect
that a set of four 1,000-egg tests will occur over a total of 8 weeks
including laboratory time. Therefore, the total number of days diverted
is equal to 56. This figure assumes that only one egg positive will be
found and that diversion will end after eight weeks of testing. The
total cost of diversion is: CostD3 = DC x 56 x 0.72 x HS.
    <bullet> The probability that this scenario will occur is equal to
PS3 = pN1 x pG1 x (1 - pG2),
where pG2 is the probability that the
second egg test is positive.
    Scenario 4: 40 to 45 week environmental and first two egg tests
positive. Eventually test off diversion.
    <bullet> In this scenario, a positive 40 to 45 week environmental
test triggers egg testing. One of the first 4 1,000-egg tests comes up
positive, and the farmer must divert. After the positive egg test, one
of the next 4 egg tests is also positive, and the farmer continues to
divert. However, the farmer eventually tests off diversion, and eggs
are tested monthly for the life of the flock.
    <bullet> The cost of egg testing in this scenario builds on the
cost of egg testing in scenario 3. In this case the cost is equivalent
to that of the last case with the exception that testing continues to
occur halfway to the end of lay. Mathematically, this is written as:
CostGT4 = (CGT + CGL + CGG) x [(8 x NGT) + 2.17 x (LF4 - 1) x NGT5 / 2 + (LF4 - 1) x NGT / 2].
    <bullet> The cost of diversion equals the cost of diversion in
scenario 3 (DC x 56 x 0.72 x HS) plus the cost of diversion for half of
the remaining lay period DC x [30 x (LF4 - 1) / 2] x 0.72 x HS.
After like terms are grouped, the total cost under this scenario
can be written as:
CostD4 = (DC x 0.72 x HS) x (56 + 30 x (LF4 - 1) / 2).
    <bullet> The probability that this scenario will occur is equal to
PS4 = pN1 x pG1 x pG2 x (1 - pG3),
where pG3 is the probability that the
farm never tests out of diversion.
    Scenario 5: 40 to 45 week environmental and first two egg tests
positive. Farm stays on diversion for the life of the flock.
    <bullet> In this scenario, a positive 40 to 45 week test triggers
egg testing. One of the first 4 egg tests comes up positive, and the
farmer must divert. One of the 4 subsequent 1,000-egg tests also comes
up positive and the farmer continues to divert. Subsequent tests
continue to be positive, and the farmer diverts for the life of the
flock.
    <bullet> The cost of egg testing is equivalent to the cost of
testing every two weeks for the life of the flock following the first
egg positive, or
CostGT5 = 2 x (CGT + CGL + CGG) x [(8 x NGT) + 2.17 x (LF5 - 1) x NGT.
    <bullet> The farm is forced to divert eggs for the life of the
flock following the first egg positive, or
CostD = (DC x 0.72 x HS) x (56 + 30 x (LF5 - 1)).
    <bullet> The probability that this scenario will occur is equal to
PS5 = pN1 x pG1 x pG2 x pG3.
    a. Molted layers. The introduction of molted flocks complicates the
analysis of testing costs by introducing new protocols for end of cycle
testing. Molting increases the original 6 scenarios to 22. Also, molted
flocks have a much longer life expectancy than do non-molted flocks.
Any problems resulting from analyzing flocks with different life spans
is dealt with in the latter part of this appendix where the costs are
annualized. The method used to estimate the cost of testing and
diversion for molted flocks is outlined below.
    b. All scenarios. Under all scenarios with molted layers, the
producer will have to conduct two sets of environmental tests. The
costs of
 
[[Page 56899]]
 
environmental testing are:
CostNT = 2 x (CNT + CNL) x NNTS.
    Scenario 1a: 40 to 45 week environmental test negative. Post-molt
environmental test negative.
    <bullet> In the first scenario for molted layers, both the 40 to 45
week and the post-molt environmental tests are negative. No further
action is required.
    <bullet> There are no egg testing or diversion costs in this
scenario.
    <bullet> The first scenario occurs with a probability
PS1a = (1 - pN1) x (1 - pN3A), where
pN1 is the probability that the 40 to 45 week environmental
test is positive and pN3A is the probability that the post-
molt environmental test is positive.
    Scenario 1b: 40 to 45 week environmental test negative. Post-molt
environmental test positive. Egg test negative.
    <bullet> In this scenario, the 40 to 45 week environmental test is
negative. However, a positive post-molt test triggers egg testing.
Further testing is avoided because all 4 egg tests are negative.
    <bullet> As with non-molted flocks, the cost of an egg test is the
sum of the laboratory (CGT), labor (CGL), and
lost revenue (CGG) costs for a 20-egg test times the number
of 20-egg batches to be tested (NGT) times the number of
test collections (4). The total cost of egg testing is therefore:
CostGT1b = (CGT + CGL + CGG) x NGT x 4.
    <bullet> There are no diversion costs in this scenario.
    <bullet> This scenario occurs with a probability
PS1b = (1 - pN1) x pN3A x (1 - pG1A),
where pG1A is the probability that the first set of egg tests, if
taken, will be positive.
    Scenario 1c: 40 to 45 week environmental test negative. Post-molt
environmental test positive. First egg test positive. Second egg test
negative.
    <bullet> In this scenario, the 40 to 45 week environmental test is
negative. However, a positive post-molt environmental test triggers egg
testing. One of the first 4 post-molt eggs tests is positive,
triggering diversion. The 4 post-molt tests are negative and diversion
is stopped. Eggs are tested monthly for the life of the flock without
any additional positive test results.
    <bullet> In this case, there will be two sets of egg tests. In
addition, the farm will be expected to test monthly for the remaining
life of the flock (LF1c - 1). The total cost of egg testing
is therefore:
CostGT1c = (CGT + CGL + CGG) x NGT x (8 + LF1c - 1).
    <bullet> The cost of diversion is the price differential between a
table egg and an SE-positive egg (DC) times the number of days diverted
times the number of eggs produced per day by a typical bird (0.72)
times the number of layers in a typical poultry house (HS). We expect
that a set of four 1,000-egg tests will occur over a total of 8 weeks
including laboratory time. Therefore, the total number of days diverted
is equal to 56. The total cost of diversion is: CostD1c = DC
x 56 x 0.72 x HS.
    <bullet> This scenario occurs with a probability
PS1c = (1 - pN1) x pN3A x pG1A x (1 - pG2A),
where pG2A is the probability that a
second set of egg tests, if taken, will be positive.
    Scenario 1d: 40 to 45 week environmental test negative. Post-molt
environmental test positive. First two egg tests positive. Farm
eventually tests out of diversion.
    <bullet> In this scenario, the 40 to 45 week environmental test is
negative. However, a positive post-molt environmental test triggers egg
testing. One of the first 4 egg tests comes up positive, and the farmer
must divert. One of the second four egg tests also comes up positive,
and the farmer continues to divert. Eventually, however, the farm is
able to test off diversion and diversion is stopped. Eggs are tested
monthly for the life of the flock without any additional positive test
results.
    <bullet> In this case, there will be eight egg tests (occurring in
2 week intervals), tests every 2 weeks for half of the remaining life
of the flock, and monthly tests for the remaining half of the life of
the flock. The total cost of egg testing is therefore:
CostGT1d = (CGT + CGL + CGG) x NGT x [8 + 2.17 x (LF1d - 1) / 2 + (LF1d - 1) / 2].
    <bullet> In this case, diversion costs will be borne by the
producer for the 8 weeks of the second set of egg tests plus half of
the remaining lay period. The total cost of diversion is:
CostD1d = DC x 0.72 x HS x [56 + 30 x (LF1d - 1) / 2].
    <bullet> This scenario occurs with a probability
PS1d = (1 - pN1) x pN3A x pG1A x pG2A x (1- pG3A),
where pG3A is the
probability that a farm with two positive sets of egg tests will not be
able to test off of diversion.
    Scenario 1e: 40 to 45 week environmental test negative. Post-molt
environmental test positive. First two egg tests positive. Farm diverts
to depopulation.
    <bullet> In this scenario, the 40 to 45 week environmental test is
negative. However, a positive post-molt environmental test triggers egg
testing. One of the first four egg tests is positive, and the farmer
must divert. One of the second four egg tests also comes up positive,
and the farmer continues to divert. The farm is never able to test off
diversion.
    <bullet> The cost of egg testing is equivalent to the cost of
testing every two weeks for the life of the flock following the first
egg positive, or
CostGT1e = (CGT + CGL + CGG) x NGT x [8 + 2.17 x (LF1e - 1)].
    <bullet> In this case, diversion costs will be borne by the
producer for the 8 weeks of the second set of egg tests plus all of the
remaining lay period. The total cost of diversion is:
CostD1e = DC x 0.72 x HS x [56 + 30 ' (LF1e - 1)].
    <bullet> This scenario occurs with a probability
PS1e = (1 - pN1) x pN3A x pG1A x pG2A x pG3A.
    Scenario 2a: 40 to 45 week environmental test positive. Pre-molt
egg test negative. Post-molt environmental test is negative.
    <bullet> The 40 to 45 week environmental test is positive. The 4
egg tests are negative. No action is taken until the post-molt
environmental test, which is negative. Further testing is avoided.
    <bullet> The 4 egg tests are done pre-molt at a cost of:
CostGT = (CGT + CGL + CGG) x NGT x 4.
    <bullet> There are no diversion costs in this scenario.
    <bullet> This scenario occurs with probability
PS2a = pN1 x pN2 x (1 - pG1E) x (1 - pN3C),
where pG1E is the probability that a pre-
molt egg test will be positive and pN3C is the probability
that the end of cycle environmental test will be positive.
    Scenario 2b: 40 to 45 week environmental test positive. Pre-molt
egg test negative. Post-molt environmental test positive. Egg test
negative.
    <bullet> The 40 to 45 week environmental test is positive. The four
egg tests are negative. No action is taken until the post-molt
environmental test, which is positive. All four post-molt egg tests are
negative.
    <bullet> In this case two sets of 4 1,000-egg tests are required.
The cost of this testing is:
CostGT = (CGT + CGL + CGG) x NGT x 8.
    <bullet> There are no diversion costs in this scenario.
    <bullet> This scenario occurs with a probability
PS2b = pN1 x pN2 x (1 - pG1E) x pN3C x (1 - pG1c),
where pG1C is the
probability that the first set of post-molt egg tests will be positive.
    Scenario 2c: 40 to 45 week environmental test positive. Pre-molt
egg test negative. Post-molt environmental test positive. First egg
test positive. Second egg test negative.
    <bullet> The 40 to 45 week environmental test is positive. All four
required egg tests are negative. No action is taken. The post-molt
environmental test is positive, triggering egg testing. One of the four
egg tests is positive, triggering diversion. All four of the second
tests
 
[[Page 56900]]
 
are negative, and diversion is stopped. Eggs are tested monthly for the
remaining life of the flock.
    <bullet> In this case, there will be three sets of egg tests. In
addition, the farm will be expected to test monthly for the remaining
life of the flock (LF2c - 1). The total cost of egg testing
is therefore:
CostGT = (CGT + CGL + CGG) x NGT x (12 + LF2c - 1).
    <bullet> The cost of diversion is the price differential between a
table egg and a SE positive egg (DC) times the number of days diverted
times the number of eggs produced per day by a typical bird (0.72)
times the number of layers in a typical layer house (HS). We expect
that a set of four 1,000-egg tests will occur over a total of 8 weeks,
including laboratory time. Therefore, the total number of days diverted
is equal to 56. The total cost of diversion is: CostD = DC x 56 x 0.72 x HS.
    <bullet> This scenario occurs with a probability
PS2c = pN1 x pN2 x (1 - pG1E) x pN3C x pG1c x (1 - pG2C),
where pG2C is the probability that a second set of egg tests, if
taken, will be positive.
    Scenario 2d: 40 to 45 week environmental test positive. Pre-molt
egg test negative. Post-molt environmental test positive. The first two
egg tests positive. Farm eventually tests out of diversion.
    <bullet> The 40 to 45 week environmental test is positive. All four
pre-molt egg tests are negative. No action is taken. The post-molt
environmental test is positive, triggering egg testing. One of the
first four post-molt egg tests comes up positive, and the farmer must
divert. One of the second four post-molt egg tests also comes up
positive, and the farmer continues to divert. The farm is eventually
able to test off of diversion. Eggs are tested monthly for the
remaining life of the flock.
    <bullet> In this case, there will be 12 egg tests (occurring in 2
week intervals), tests every 2 weeks for half of the remaining life of
the flock, and monthly tests for the remainder of the life of the
flock. The total cost of egg testing is therefore:
CostGT = (CGT + CGL + CGG) x NGT x [12 + 2.17 x (LF2d - 1) / 2 + (LF2d - 1) / 2].
    <bullet> In this case, diversion costs will be borne by the
producer for the 8 weeks of the second set of egg tests plus half of
the remaining lay period. The total cost of diversion is:
CostD = DC x 0.72 x HS x [56 + 30 x (LF2d - 1) / 2].
    <bullet> This scenario occurs with a probability
PS2d = pN1 x pN2 x (1 - pG1E) x pN3C x pG1c x pG2C x (1 - pG3C),
where pG3C is the probability that a farm
with two positive sets of egg tests will not be able to test off of
diversion.
    Scenario 2e: 40 to 45 week environmental test positive. Pre-molt
egg test negative. Post-molt environmental test positive. First two egg
tests positive. Farm diverts until depopulation.
    <bullet> The 40 to 45 week environmental test is positive. All four
pre-molt egg tests are negative. No action is taken. The post-molt
environmental test is positive, triggering egg testing. One of the
first four post-molt egg tests comes up positive, and the farmer must
divert. One of the second 4 post-molt egg tests also comes up positive,
and the farmer continues to divert. The farm is never able to test out
of diversion.
    <bullet> The cost of egg testing is equivalent to the cost of
testing every 2 weeks for the life of the flock following the first egg
positive, or
CostGT = (CGT + CGL + CGG) x NGT x [12 + 2.17 x (LF2e - 1)].
    <bullet> In this case, diversion costs will be borne by the
producer for the 8 weeks of the second set of egg tests plus all of the
remaining lay period. The total cost of diversion is: CostD
 
= DC x 0.72 x HS x [56 + 30 x (LF2e - 1)].
    <bullet> This scenario occurs with a probability
PS2e = pN1 x pN2 x (1 - pG1E) x pN3C x pG1c x pG2C x pG3C.
    Scenario 3a: 40 to 45 week environmental test positive. First pre-
molt egg test positive. Second pre-molt egg test negative. Post-molt
environmental test is negative.
    <bullet> The 40 to 45 week environmental test is positive. On of
the first four pre-molt egg tests is positive, triggering diversion.
All four of the second pre-molt tests are negative, ending diversion.
No further action is taken until the post-molt environmental test,
which is negative. Further testing is avoided.
    <bullet> Two sets of egg tests are carried out pre-molt. Also,
monthly egg tests must be taken for the life of the flock. The cost of
egg testing is:
CostGT = (CGT + CGL + CGG) x NGT x (8 + LF3a - 1).
    <bullet> Eggs are diverted between the first and second egg tests.
We expect that a set of 4 1,000-egg tests will occur over a total of 8
weeks, including laboratory time. Therefore, the total number of days
diverted is equal to 56. The total cost of diversion is:
CostD = DC x 56 x 0.72 x HS.
    <bullet> This scenario occurs with probability
PS3a = pN1 x pN2 x pG1E x (1 - pG2E) x (1 - pN4D),
where pG2E is the
probability that the second set of pre-molt egg tests will be positive
and pN3D is the probability that the end of cycle
environmental test will be positive.
    Scenario 3b: 40 to 45 week environmental test positive. First pre-
molt egg test positive. Second pre-molt egg test negative. Post-molt
environmental test positive. Egg test negative.
    <bullet> The 40 to 45 week environmental test is positive. One of
the first four pre-molt egg tests is positive, triggering diversion.
All four of the second pre-molt egg tests are negative, ending
diversion. No action is taken until the post-molt environmental test,
which is positive. The first four post-molt egg tests are negative.
    <bullet> In this case, three sets of egg tests are required.
Furthermore, monthly egg testing is required for the life of the flock.
The cost of this testing is:
CostGT = (CGT + CGL + CGG) x NGT x (12 + LF3b - 1).
    <bullet> Eggs are diverted between the first and second egg tests.
We expect that a set of four 1,000-egg tests will occur over a total of
8 weeks, including laboratory time. Therefore, the total number of days
diverted is equal to 56. The total cost of diversion is:
CostD = DC x 56 x 0.72 x HS.
    <bullet> This scenario occurs with a probability
PS3b = pN1 x pN2 x pG1E x (1 - pG2E) x pN4D x (1 - pG1D),
where pG1D is the probability that the first set of post-molt egg
tests will be positive.
    Scenario 3c: 40 to 45 week environmental test positive. First pre-
molt egg test positive. Second pre-molt egg test negative. Post-molt
environmental test positive. First egg test positive. Second egg test
is negative.
    <bullet> The 40 to 45 week environmental test is positive. One of
the first four pre-molt egg tests is positive, triggering diversion.
The second 4 pre-molt egg tests are negative, ending diversion. No
action is taken until the post-molt environmental test, which is
positive. One of the first four post-molt egg tests is positive,
triggering diversion. The second four post-molt egg tests are negative
and diversion is stopped. Eggs are tested monthly for the remaining
life of the flock.
    <bullet> In this case, there will be four sets of egg tests. In
addition, the farm will be expected to test monthly for the remaining
life of the flock (LF3c - 1). The total cost of egg testing
is therefore:
CostGT = (CGT + CGL + CGG) x NGT x (16 + LF3c - 1).
    <bullet> Twice in the life of this flock eggs have tested positive
in one test and negative in the next. We expect that a set of four
1,000-egg tests will occur over a total of 8 weeks, including
laboratory time. Therefore, the total number of days diverted is equal
to 56. The total cost of diversion is: CostD = DC x 112 x 0.72 x HS.
    <bullet> This scenario occurs with a probability
PS3c = pN1 x pN2 x pG1E x (1 - pG2E) x pN4D x pG1D x (1 - pG2D),
where
 
[[Page 56901]]
 
pG2D is the probability that a second set of egg tests, if
taken, will be positive.
    Scenario 3d: 40 to 45 week environmental test positive. First pre-
molt egg test positive. Second pre-molt egg test negative. Post-molt
environmental test positive. First two egg tests positive. Farm
eventually tests out of diversion.
    <bullet> The 40 to 45 week environmental test is positive. One of
the first four pre-molt egg tests is positive, triggering diversion.
The second four pre-molt egg tests are negative, ending diversion. No
action is taken until the post-molt environmental test, which is
positive. One of the first four post-molt egg tests comes up positive,
and the farmer must divert. One of the second four post-molt egg tests
also comes up positive, and the farmer continues to divert. The farm is
eventually able to test off of diversion. Eggs are tested monthly for
the remaining life of the flock.
    <bullet> In this case, there will be eight egg tests (occurring in
2 week intervals), tests every 2 weeks for half of the remaining life
of the flock, and monthly tests for the remainder of the life of the
flock. The total cost of egg testing is therefore:
CostGT = (CGT + CGL + CGG) x NGT x [16 + 2.17 x (LF3d - 1) / 2 + (LF3d - 1) / 2].
    <bullet> In this case, diversion costs will be borne by the
producer for the 8 weeks of the second set of egg tests plus half of
the remaining lay period. The total cost of diversion is:
CostD = DC x 0.72 x HS x [112 + 30 x (LF3d - 1) / 2].
    <bullet> This scenario occurs with a probability
PS3d = pN1 x pN2 x pG1E x (1 - pG2E) x pN4D x pG1D x pG2D x (1 - pG3D),
where pG3D is the probability that
a farm with two positive sets of egg tests will not be able to test off
of diversion.
    Scenario 3e: 40 to 45 week environmental test positive. First pre-
molt egg test positive. Second pre-molt egg test negative. Post-molt
environmental test positive. First two egg tests positive. Farm diverts
until depopulation.
    <bullet> The 40 to 45 week environmental test is positive. One of
the first four eggs tests is positive, triggering diversion. and the
second four pre-molt tests are negative, ending diversion. No action is
taken until the post-molt environmental test, which is positive. One of
the first four post-molt egg tests comes up positive, and the farmer
must divert. One of the second four post-molt egg tests also comes up
positive, and the farmer continues to divert. The farm is never able to
test out of diversion.
    <bullet> The cost of egg testing is equivalent to the cost of
testing every 2 weeks for the life of the flock following the first egg
positive, or CostGT = (CGT + CGL + CGG) x NGT x [16 + 2.17 x (LF3e - 1)].
    <bullet> In this case diversion costs will be borne by the producer
for the 16 weeks following each second set of egg tests plus the
remaining lay period. The total cost of diversion is:
CostD = DC x 0.72 x HS x [112 + 30 x (LF3e - 1)].
    <bullet> This scenario occurs with a probability
PS3e = pN1 x pN2 x pG1E x (1 - pG2E) x pN4D x pG1D x pG2D x (1 - pG3D).
    Scenario 4: 40 to 45 week environmental test positive. First pre-
molt egg test positive. Second pre-molt egg test positive. Farm
eventually tests out of diversion.
    <bullet> The 40 to 45 week environmental test is positive. One of
the first four pre-molt egg tests is positive, triggering diversion.
One of the second four pre-molt egg tests is also positive. Because the
farm is already under diversion at the time of molt no post-molt test
is needed. However, the farm eventually tests out of diversion. Eggs
are tested monthly for the remaining life of the flock.
    <bullet> In this case there will be eight egg tests (occurring in 2
week intervals), tests every 2 weeks for half of the remaining life of
the flock, and monthly tests for the remainder of the life of the
flock. The total cost of egg testing is therefore:
CostGT = (CGT + CGL + CGG) x NGT x [8 + 2.17 x (LF4 - 1) / 2 + (LF4 - 1) / 2].
    <bullet> Diversion costs will be borne by the producer for the 8
weeks of the second set of egg tests plus half of the remaining lay
period. The total cost of diversion is:
CostD = DC x 0.72 x HS x [56 + 30 x (LF4 - 1) / 2].
    <bullet> This scenario occurs with a probability
PS4 = pN1 x pN2 x pG1E x pG2E x (1 - pG3E), where pG3e
is the probability that a farm with two positive sets of egg tests will not be
able to test off of diversion.
    Scenario 5: 40 to 45 week environmental test positive. First pre-
molt egg test positive. Second pre-molt egg test positive. Farm diverts
until depopulation.
    <bullet> The 40 to 45 week environmental test is positive. One of
the first four pre-molt egg tests is positive, triggering diversion.
One of the second four pre-molt egg tests is also positive. Because the
farm is already under diversion at the time of molt, no post-molt test
is needed. The farm is never able to test out of diversion.
    <bullet> The cost of egg testing is equivalent to the cost of
testing every two weeks for the life of the flock following the first
egg positive, or
CostGT = (CGT + CGL + CGG) x NGT x [8 + 2.17 x (LF5 - 1)].
    <bullet> In this case, diversion costs will be borne by the
producer for the 16 weeks following each second set of egg tests plus
the remaining lay period. The total cost of diversion is:
CostD = DC x 0.72 x HS x [56 + 30 x (LF5 - 1)].
    <bullet> This scenario occurs with a probability
PS5 = pN1 x pN2 x pG1E x pG2E x pG3E.
 
[[Page 56902]]
 
[GRAPHIC] [TIFF OMITTED] TP22SE04.000
 
 
Appendix C to the PRIA: Distributions Used in the Analysis of
Uncertainty
 
[[Page 56903]]
 
 
 
            Distributions Used in the Analysis of Uncertainty
------------------------------------------------------------------------
------------------------------------------------------------------------
Coverage of the Proposed Rule
------------------------------------------------------------------------
  Farms Selling to Retail (50  Risk Uniform (0%,   Egg Safety Action
   to 99 layers)                50%)                Group Approved
                                                    Assumption
------------------------------------------------------------------------
  Farms Selling to Retail      Risk Uniform (10%,  Egg Safety Action
   (100 to 399 layers)          90%)                Group Approved
                                                    Assumption
------------------------------------------------------------------------
  Farms Selling to Retail      Risk Uniform (50%,  Egg Safety Action
   (400 to 3000 layers)         100%)               Group Approved
                                                    Assumption
------------------------------------------------------------------------
  Farms Not Selling in Retail  Risk Uniform (0%,   Egg Safety Action
   that Sell Directly to        100%)               Group Approved
   Consumers                                        Assumption
------------------------------------------------------------------------
  Number of Houses per Farm    Risk Normal (1.7,   From Layers 99
   Site (3,000 to 19,999        0.5)
   layers)
------------------------------------------------------------------------
  Number of Houses per Farm    Risk Normal (1.8,   From Layers 99
   Site (20,000 to 49,999       0.2)
   layers)
------------------------------------------------------------------------
  Number of Houses per Farm    Risk Normal (2.4,   From Layers 99
   Site (50,000 to 99,999       0.3)
   layers)
------------------------------------------------------------------------
  Number of Houses per Farm    Risk Normal (7.4,   From Layers 99
   Site (Over 100,000 layers)   0.8)
------------------------------------------------------------------------
Egg Prices
------------------------------------------------------------------------
  Wholesale Price of Table     Risk Uniform        USDA
   Eggs- North Atlantic         ($0.66, $0.70)
------------------------------------------------------------------------
  Wholesale Price of Table     Risk Uniform        USDA
   Eggs- North Central          ($0.57, $0.69)
------------------------------------------------------------------------
  Wholesale Price of Table     Risk Uniform        USDA
   Eggs- South Atlantic         ($0.63, $0.76)
------------------------------------------------------------------------
  Wholesale Price of Table     Risk Uniform        USDA
   Eggs- South Central          ($0.69, $0.83)
------------------------------------------------------------------------
  Wholesale Price of Table     Risk Uniform        USDA
   Eggs- West                   ($0.75, $0.95)
------------------------------------------------------------------------
  Value of Checks/UnderGrades  Risk Uniform        USDA
   - North Atlantic             ($0.14, $0.19)
------------------------------------------------------------------------
  Value of Checks/UnderGrades  Risk Uniform        USDA
   - North Central              ($0.15, $0.18)
------------------------------------------------------------------------
  Value of Checks/UnderGrades  Risk Uniform        USDA
   - South Atlantic             ($0.14, $0.19)
------------------------------------------------------------------------
  Value of Checks/UnderGrades  Risk Uniform        USDA
   - South Central              ($0.15, $0.18)
------------------------------------------------------------------------
Benefits Estimation
------------------------------------------------------------------------
  Percent of SE cases from     Risk Uniform (53%,  CDC Range from
   Eggs                         79%)                Outbreaks
------------------------------------------------------------------------
  Percent of Illnesses         Risk Pert (0%, 3%,  Range Estimated in
   Resulting in Arthritis       10%)                Traceback Studies
------------------------------------------------------------------------
  Arthritis Cases that are     Risk Beta (10, 19)  Based on Zorn and
   Short-Term                                       Klontz
------------------------------------------------------------------------
  Percent of SE Positive Eggs  Risk Uniform        Estimate is a
   Diverted in First Four       (6.7%, 9.4%)        Synthesis of
   Years                                            'Initial' and
                                                    'Eventual' Estimates
                                                    from the Testing and
                                                    Diversion Model
------------------------------------------------------------------------
SE Monitored Chicks/Pullets
------------------------------------------------------------------------
  Percent of Pullets in NPIP   Risk Normal         Layers 99
   SE Monitored Program         (94.5%, 1.8%)
------------------------------------------------------------------------
Biosecurity
------------------------------------------------------------------------
  Percent of Large Houses      Risk Uniform (Risk  Layers 99
   with Footbaths               Normal (24.5%,
                                5.4%), Risk
                                Normal (24.6%,
                                6.4%))
------------------------------------------------------------------------
Rodent and Pest Control - Primary Method of Fly Control
------------------------------------------------------------------------
  Residual Spray (less than    Risk Normal         Layers 99
   20,000 layers)               (42.1%, 22.2%)
------------------------------------------------------------------------
  Baits (less than 20,000      Risk Normal         Layers 99
   layers)                      (11.4%, 6.5%)
------------------------------------------------------------------------
  Larvicide (feed) (less than  Risk Normal         Layers 99
   20,000 layers)               (17.2%, 9.8%)
------------------------------------------------------------------------
  Biological Predators less    Risk Normal         Layers 99
   than 20,000 layers)          (20.1%, 15.8%)
------------------------------------------------------------------------
 
[[Page 56904]]
 
 
  Other (less than 20,000      Risk Normal (2.4%,  Layers 99
   layers)                      2.3%)
------------------------------------------------------------------------
  None (less than 20,000       Risk Normal (6%,    Layers 99
   layers)                      4.8%)
------------------------------------------------------------------------
  Residual Spray (20,000 to    Risk Normal         Layers 99
   49,999 layers)               (14.2%, 7.4%)
------------------------------------------------------------------------
  Baits (20,000 to 49,999      Risk Normal         Layers 99
   layers)                      (32.6%, 9.4%)
------------------------------------------------------------------------
  Larvicide (spot) (20,000 to  Risk Normal (0.9%,  .....................
   49,999 layers)               0.6%)
------------------------------------------------------------------------
  Larvicide (feed) (20,000 to  Risk Normal         Layers 99
   49,999 layers)               (26.6%, 12.6%)
------------------------------------------------------------------------
  Sprays/Foggers (20,000 to    Risk Normal (4.2%,  Layers 99
   49,999 layers)               2.3%)
------------------------------------------------------------------------
  Other (20,000 to 49,999      Risk Normal (4%,    Layers 99
   layers)                      2%)
------------------------------------------------------------------------
  None (20,000 to 49,999       Risk Normal         Layers 99
   layers)                      (17.5%, 6.9%)
------------------------------------------------------------------------
  Residual Spray (50,000 to    Risk Normal (24%,   Layers 99
   99,999 layers)               7.2%)
------------------------------------------------------------------------
  Baits (50,000 to 99,999      Risk Normal         Layers 99
   layers)                      (38.5%, 8%)
------------------------------------------------------------------------
  Larvicide (feed) (50,000 to  Risk Normal         Layers 99
   99,999 layers)               (12.8%, 6.1%)
------------------------------------------------------------------------
  Sprays/Foggers (50,000 to    Risk Normal         Layers 99
   99,999 layers)               (12.9%, 6.8%)
------------------------------------------------------------------------
  Biological Predators         Risk Normal (6.8%,  Layers 99
   (50,000 to 99,999 layers)    3.1%)
------------------------------------------------------------------------
  None (50,000 to 99,999       Risk Normal (5%,    Layers 99
   layers)                      2.1%)
------------------------------------------------------------------------
  Residual Spray (Over         Risk Normal (14%,   Layers 99
   100,000 layers)              3.9%)
------------------------------------------------------------------------
  Baits (Over 100,000 layers)  Risk Normal         Layers 99
                                (39.1%, 8%)
------------------------------------------------------------------------
  Larvicide (spot) (Over       Risk Normal (0.8%,  Layers 99
   100,000 layers)              0.7%)
------------------------------------------------------------------------
  Larvicide (feed) (Over       Risk Normal (9.2%,  Layers 99
   100,000 layers)              2.9%)
------------------------------------------------------------------------
  Sprays/Foggers (Over         Risk Normal         Layers 99
   100,000 layers)              (10.4%, 4%)
------------------------------------------------------------------------
  Biological Predators (Over   Risk Normal         Layers 99
   100,000 layers)              (12.9%, 6.4%)
------------------------------------------------------------------------
  Other (Over 100,000 layers)  Risk Normal (4.8%,  Layers 99
                                2.3%)
------------------------------------------------------------------------
  None (Over 100,000 layers)   Risk Normal (8.8%,  Layers 99
                                2.4%)
------------------------------------------------------------------------
Rodent and Pest Control - Primary Method of Rodent Control
------------------------------------------------------------------------
  Chemicals or Bait (less      Risk Normal         Layers 99
   than 20,000 layers)          (63.6%, 17.6%)
------------------------------------------------------------------------
  Traps or Tape (less than     Risk Normal         Layers 99
   20,000 layers)               (17.6%, 15.7%)
------------------------------------------------------------------------
  Cats (less than 20,000       Risk Normal         Layers 99
   layers)                      (18.8%, 10.3%)
------------------------------------------------------------------------
  Chemicals or Bait (20,000    Risk Normal         Layers 99
   to 49,999 layers)            (71.6%, 6.4%)
------------------------------------------------------------------------
  Traps or Tape (20,000 to     Risk Normal (7.4%,  Layers 99
   49,999 layers)               3.6%)
------------------------------------------------------------------------
  Cats (20,000 to 49,999       Risk Normal (18%,   Layers 99
   layers)                      6.6%)
------------------------------------------------------------------------
  None (20,000 to 49,999       Risk Normal (3%,    Layers 99
   layers)                      2%)
------------------------------------------------------------------------
  Chemicals or Bait(50,000 to  Risk Normal (94%,   Layers 99
   99,999 layers)               2%)
------------------------------------------------------------------------
  Traps or Tape (50,000 to     Risk Normal (2.2%,  Layers 99
   99,999 layers)               1%)
------------------------------------------------------------------------
  Cats (50,000 to 99,999       Risk Normal (3.8%,  Layers 99
   layers)                      1.6%)
------------------------------------------------------------------------
  Chemicals or Bait (Over      Risk Normal         Layers 99
   100,000 layers)              (90.6%, 2.7%)
------------------------------------------------------------------------
  Traps or Tape (Over 100,000  Risk Normal (6.6%,  Layers 99
   layers)                      2.4%)
------------------------------------------------------------------------
  Cats (Over 100,000 layers)   Risk Normal (1.4%,  Layers 99
                                0.7%)
------------------------------------------------------------------------
 
[[Page 56905]]
 
 
  Other (Over 100,000 layers)  Risk Normal (1%,    Layers 99
                                0.5%)
------------------------------------------------------------------------
  None (Over 100,000 layers)   Risk Normal (0.4%,  Layers 99
                                0.3%)
------------------------------------------------------------------------
Rodent and Pest Control - Other
------------------------------------------------------------------------
  Cost of Fly Control (3,000   Risk Uniform        RTI costs using
   to 19,999 layers)            ($3,028, $5,560)    assumptions of low
                                                    and high severity
                                                    fly problems
------------------------------------------------------------------------
  Cost of Fly Control (20,000  Risk Uniform        RTI costs using
   to 49,999 layers)            ($5,342, $9,675)    assumptions of low
                                                    and high severity
                                                    fly problems
------------------------------------------------------------------------
  Cost of Fly Control (50,000  Risk Uniform        RTI costs using
   to 99,999 layers)            ($9,873, $17,979)   assumptions of low
                                                    and high severity
                                                    fly problems
------------------------------------------------------------------------
  Cost of Fly Control (Over    Risk Uniform        RTI costs using
   100,000 layers)              ($48,626,           assumptions of low
                                $88,228)            and high severity
                                                    fly problems
------------------------------------------------------------------------
Cleaning and Disinfecting
------------------------------------------------------------------------
  Manure Removal - Between     Risk Normal         Layers 99
   Each Flock                   (96.6%, 1.6%)
------------------------------------------------------------------------
  Manure Removal - After 2 or  Risk Normal (3.4%,  Layers 99
   More Flocks                  1.6%)
------------------------------------------------------------------------
  Dry Clean - Between Each     Risk Normal         Layers 99
   Flock                        (79.4%, 3.7%)
------------------------------------------------------------------------
  Dry Clean - After 2 or More  Risk Normal (1.1%,  Layers 99
   Flocks                       0.6%)
------------------------------------------------------------------------
  Wet Clean - Between Each     Risk Normal         Layers 99
   Flock                        (30.6%, 4.5%)
------------------------------------------------------------------------
  Wet Clean - After 2 or More  Risk Normal (23%,   Layers 99
   Flocks                       5.7%)
------------------------------------------------------------------------
  Disinfect - Between Each     Risk Normal         Layers 99
   Flock                        (44.5%, 5.4%)
------------------------------------------------------------------------
  Disinfect - After 2 or More  Risk Normal         Layers 99
   Flocks                       (20.6%, 5.9%)
------------------------------------------------------------------------
Training
------------------------------------------------------------------------
  Tuition                      Risk Uniform        Web Sources
                                ($450, $550)
------------------------------------------------------------------------
  Travel                       Risk Pert           See Text
                                ($0,$250,$1000)
------------------------------------------------------------------------
  Farms Not on a QA Plan that  Risk Uniform (0%,   Assumption
   will be Affected by the      100%)
   Proposed Rule
------------------------------------------------------------------------
Testing and Diversion
------------------------------------------------------------------------
  Current Positive             Risk Uniform        See Text
   Environmental Tests          (7.1%, Risk Pert
                                (2%, 8%, 40%))
------------------------------------------------------------------------
  Probability Random Swabbing  Risk Uniform (0%,   Assumption
   Regime is Chosen by FDA      100%)
------------------------------------------------------------------------
  Percent of Farms Adequately  Risk Uniform (0%,   52% are currently
   Testing Environments         52%)                conducting some
                                                    level of testing
                                                    (Layers 99). Most of
                                                    these farms will not
                                                    be conducting an
                                                    adequate level of
                                                    testing.
------------------------------------------------------------------------
Refrigeration
------------------------------------------------------------------------
  Percent of Eggs Processed    Risk Normal         Layers 99
   Off-Farm (3,000 to 19,999    (98.3%, 1.3%)
   layers)
------------------------------------------------------------------------
  Percent of Eggs Processed    Risk Normal         Layers 99
   Off-Farm (20,000 to 49,999   (96.3%, 1.4%)
   layers)
------------------------------------------------------------------------
  Percent of Eggs Processed    Risk Normal         Layers 99
   Off-Farm (50,000 to 99,999   (83.1%, 7.6%)
   layers)
------------------------------------------------------------------------
  Percent of Eggs Processed    Risk Normal         Layers 99
   Off-Farm (Over 100,000       (65.6%, 6%)
   layers)
------------------------------------------------------------------------
  Percent of Eggs Stored at    Risk Normal         Layers 99
   Less then 45 Degrees         (21.9%, 16.1%)
   (3,000 to 19,999 layers)
------------------------------------------------------------------------
 
[[Page 56906]]
 
 
  Percent of Eggs Stored at    Risk Normal         Layers 99
   Less then 45 Degrees         (24.2%, 13.4%)
   (20,000 to 49,999 layers)
------------------------------------------------------------------------
  Percent of Eggs Stored at    Risk Normal         Layers 99
   Less then 45 Degrees         (11.1%, 3.6%)
   (50,000 to 99,999 layers)
------------------------------------------------------------------------
  Percent of Eggs Stored at    Risk Normal         Layers 99
   Less then 45 Degrees (Over   (27.3%, 8.6%)
   100,000 layers)
------------------------------------------------------------------------
Refrigeration
------------------------------------------------------------------------
  Farms that Store Eggs at     Risk Normal         Layers 99
   Greater than 60 Degrees      (42.7%, 22.7%)
   (3,000 to 19,999 layers)
------------------------------------------------------------------------
  Farms that Store Eggs at     Risk Normal         Layers 99
   Greater than 60 Degrees      (22.6%, 8.8%)
   (20,000 to 49,999 layers)
------------------------------------------------------------------------
  Farms that Store Eggs at     Risk Normal         Layers 99
   Greater than 60 Degrees      (37.7%, 10.5%)
   (50,000 to 99,999 layers)
------------------------------------------------------------------------
  Farms that Store Eggs at     Risk Normal         Layers 99
   Greater than 60 Degrees      (17.1%, 5.1%)
   (Over 100,000 layers)
------------------------------------------------------------------------
  Farms that Store Eggs at 50  Risk Normal         Layers 99
   to 60 Degrees (3,000 to      (35.4%, 17.2%)
   19,999 layers)
------------------------------------------------------------------------
  Farms that Store Eggs at 50  Risk Normal         Layers 99
   to 60 Degrees (20,000 to     (53.2%, 12.1%)
   49,999 layers)
------------------------------------------------------------------------
  Farms that Store Eggs at 50  Risk Normal         Layers 99
   to 60 Degrees (50,000 to     (51.2%, 13%)
   99,999 layers)
------------------------------------------------------------------------
  Farms that Store Eggs at 50  Risk Normal         Layers 99
   to 60 Degrees (Over          (55.6%, 17.4%)
   100,000 layers)
------------------------------------------------------------------------
  Egg Room Construction        Risk Uniform        RTI estimates for
   (3,000 to 19,999 layers)     ($3,723, $5,584)    costs of $50 and $75
                                                    per square foot
------------------------------------------------------------------------
  Egg Room Construction        Risk Uniform        RTI estimates for
   (20,000 to 49,999 layers)    ($8,036, $12,054)   costs of $50 and $75
                                                    per square foot
------------------------------------------------------------------------
  Egg Room Construction        Risk Uniform        RTI estimates for
   (50,000 to 99,999 layers)    ($15,936,           costs of $50 and $75
                                $23,903)            per square foot
------------------------------------------------------------------------
  Egg Room Construction (Over  Risk Uniform        RTI estimates for
   100,000 layers)              ($69,625,           costs of $50 and $75
                                $104,438)           per square foot
------------------------------------------------------------------------
  simulations. Risk Uniform generates a uniform distribution with
  parameters representing minimum and maximum values. Risk Normal is the
  normal distribution, with the parameters representing mean and
  standard deviation. Risk Pert is the Beta-Pert Distribution; the three
  parameters represent the minimum, most likely, and maximum values.
  Risk Beta is a Beta distribution with parameters based on the number
  of successes (adjusted for prior) and the number of failures (adjusted
  for prior).
 
[FR Doc. 04-21219 Filed 9-20-04; 11:00 am]
 
BILLING CODE 4160-01-S

Detection of Salmonella in Environmental Samples from Poultry Houses September 2004