regulation that requires the establishment and maintenance of records by persons who manufacture, process, pack, transport, distribute, receive, hold, or import food in the United States. Such records are to allow for the identification of the immediate previous sources and immediate subsequent recipients of food. The final rule implements the Public Health Security and

Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act), and is necessary to help address credible threats of serious adverse health consequences or death to humans or animals. The requirement to establish and maintain records is one of several tools that will help improve FDA’s ability to respond to, and further contain, threats of serious adverse health

consequences or death to humans or animals from accidental or deliberate contamination of food. In the event of an outbreak of foodborne illness, such information will help FDA and other authorities determine the source and cause of the event. In addition, the information will improve FDA’s ability to cf 0357 1002 p - 0237

quickly notify the consumers and/or facilities that might be affected by the outbreak.

DATES: Effective Date: This final rule is effective [insert date 60 days after

publication in the Federal Register].

Compliance Dates: The compliance date is [insert date 12 months after date of publication in the Federal Register]; except that for small businesses employing fewer than 500, but more than 10 full-time equivalent employees, the compliance date is [insert date 18 months after date of publication in the Federal Register]; and except that for very small businesses that employ 10 or fewer full-time equivalent employees, the compliance date is [insert date 24 months after date of publication in the Federal Register].

FOR FURTHER INFORMATION CONTACT: Nega Beru, Center for Food Safety and Applied Nutrition (HFS–305), Food and Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 301–436–1400.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background and Legal Authority

II. Highlights of the Final Rule and Summary of the Significant Changes Made to the Proposed Rule

A. Highlights of This Final Rule

B. Significant Changes FDA Made to the Proposed Rule

III. Comments on the Proposed Rule

A. General Comments

B. Foreign Trade Issues

C. Comments on Who is Subject to This Subpart? (Proposed § 1.326)

D. Comments on Who is Excluded From All or Part of the Regulations

in this Subpart? (Proposed § 1.327)

E. Comments on What Definitions Apply to this Subpart? (Proposed

§ 1.328)

F. Comments on Do Other Statutory Provisions and Regulations Apply?

(Proposed § 1.329)

G. Comments on Can Existing Records Satisfy the Requirements of this Subpart? (Proposed § 1.330)

H. Comments on What Information is Required in the Records You Must Establish and Maintain to Identify the Nontransporter and Transporter Immediate Previous Source and Immediate Subsequent Recipients? (Proposed §§ 1.337 and 1.345)

I. Comments on Who is Required to Establish and Maintain Records for Tracing the Transportation of All Food? (Proposed § 1.351)

J. Comments on What Information is Required in the Transportation Records? (Proposed § 1.352)

K. Comments on What Are the Record Retention Requirements? (Proposed § 1.360)

L. Comments on What Are the Record Availability Requirements?

(Proposed § 1.361)

M. Comments on What Records Are Excluded From this Subpart?

(Proposed § 1.362)

N. Comments on What Are the Consequences of Failing to Establish and Maintain Records or Make Them Available to FDA as Required By This Subpart? (Proposed § 1.363)

O. Comments on What Are the Compliance Dates for This Subpart? (Proposed § 1.368)

IV. Analysis of Economic Impacts—Final Regulatory Impact Analysis

A. Summary of the Costs and Benefits of the Final Rule

B. Description of Proposed Rule

C. General Comments

D. The Tradeoff Between Costs and Risk Reduction

E. Estimating the Benefits

F. Costs

G. Summary of the Costs and Benefits of the Final Rule and Policy

V. Final Regulatory Flexibility Analysis

VI. Unfunded Mandates

VII. SBREFA

VIII. Paperwork Reduction Act of 1995

IX. Analysis of Environmental Impact

X. Federalism

XI. References

I. Background and Legal Authority

The events of September 11, 2001, have highlighted the need to enhance the security of the infrastructure of the United States, including the food supply. Congress responded by enacting the Bioterrorism Act (Public Law 107–188), which was signed into law on June 12, 2002. The Bioterrorism Act includes a provision in title III (Protecting Safety and Security of Food and Drug Supply), subtitle A—Protection of Food Supply, section 306, which

amends the Federal Food, Drug, and Cosmetic Act (the FD&C Act) by adding section 414, Maintenance and Inspection of Records (21 U.S.C. 350c). (In the regulation itself, which is codified in title 21 of the Code of Federal Regulations, the Federal Food, Drug, and Cosmetic Act is referred to as ‘‘the act.’’ Thus, when the regulation is quoted in this preamble, the term ‘‘the act’’

will be used to refer to the Federal Food, Drug, and Cosmetic Act. However,

in this preamble, we refer to the Federal Food, Drug, and Cosmetic Act as ‘‘the FD&C Act’’ to distinguish it from the Bioterrorism Act.) Section 414(b) of the FD&C Act provides, in part, that the Secretary of Health and Human Services (the Secretary), may by regulation establish requirements regarding the establishment and maintenance, for not longer than 2 years, of records by persons (excluding farms and restaurants) who manufacture, process, pack, transport, distribute, receive, hold, or import food. The records that are required to be kept by these regulations are those needed by the Secretary for inspection to allow the Secretary to identify the immediate previous sources

and immediate subsequent recipients of food, including its packaging, to address credible threats of serious adverse health consequences or death to humans or animals. Section 306(d) of the Bioterrorism Act provides that the Secretary ‘‘shall’’ issue regulations establishing recordkeeping requirements under section 414(b) of the FD&C Act no later than 18 months after enactment

of the Bioterrorism Act, that is, by December 12, 2003.

In addition, the Bioterrorism Act adds a new section 414(a) to the FD&C Act that provides records inspection authority to FDA. Section 414(a) of the FD&C Act provides that, if the Secretary has a reasonable belief that an article of food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals, persons who manufacture,

process, pack, distribute, receive, hold, or import food must provide access to records related to the food that are needed to assist the Secretary in determining whether the food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals.

Section 306 of the Bioterrorism Act also amends section 704(a) of the FD&C Act (21 U.S.C. 374(a)) to authorize FDA inspections of all records and

other information described in section 414 of the FD&C Act, when the Secretary has a reasonable belief that an article of food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals.

In addition, section 306(c) of the Bioterrorism Act amends section 301 of the FD&C Act (21 U.S.C. 331) to make it a prohibited act to refuse to permit access to, or copying of, any record as required by section 414 or 704(a) of the FD&C Act; or to fail to establish or maintain any record as required by section 414(b) of the FD&C Act; or to refuse to permit access to, or verification or copying of, any such required record; or for any person to use to his own

advantage, or to reveal, other than to the Secretary or officers or employees of the Department of Health and Human Services, or to the courts when relevant in any judicial proceeding under the FD&C Act, any information acquired under authority of section 414 of the FD&C Act.

To implement these provisions, on May 9, 2003 (68 FR 25188), FDA issued a proposed rule to require the establishment and maintenance of records to identify the immediate previous sources and immediate subsequent recipients of food. In addition to section 306 of the Bioterrorism Act, which amends the

FD&C Act as described previously, FDA is relying on section 701(a) of the FD&C Act (21 U.S.C. 371(a)) in issuing this final rule. Section 701(a) authorizes the agency to issue regulations for the efficient enforcement of the FD&C Act.

II. Highlights of the Final Rule and Summary of the Significant Changes Made to the Proposed Rule

A. Highlights of this Final Rule

The highlights of this final rule are described briefly in the following paragraphs, and are discussed in more detail later in the preamble of this document:

• Persons who manufacture, process, pack, transport, distribute, receive,

hold, or import food in the United States are subject to the regulations in par

1 (21 CFR part 1) subpart J of this final rule (i.e., recordkeeping and access requirements);

• The following persons or facilities are excluded from all of the

regulations in subpart J of this final rule: Farms; restaurants; those performing covered activities when the food is subject to the exclusive jurisdiction of the U.S. Department of Agriculture (USDA) under the Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.), the Poultry Products Inspection Act (PPIA) (21

U.S.C. 451 et seq.), or the Egg Products Inspection Act (EPIA) (21 U.S.C. 1031 et seq.); and foreign persons, except foreign persons who transport food in the United States.

• The following persons or facilities are excluded from the requirement to establish and maintain records in §§ 1.337 and 1.345 of subpart J of this final rule, but are subject to the record availability requirements in §§ 1.361 and 1.363 for existing records: (1) Fishing vessels not engaged in processing

as defined in § 123.3(k) (21 CFR part 123.3(k)); (2) retail food establishments that employ 10 or fewer full-time equivalent employees; (3) nonprofit food establishments that prepare or serve food directly to the consumer or otherwise

provide food or meals for consumption by humans or animals in the United States; and (4) persons who manufacture, process, pack, transport, distribute, receive, hold, or import food contact substances other than the finished container that directly contacts the food.

• Persons who manufacture, process, pack, transport, distribute, receive, hold, or import food are subject to §§ 1.361 and 1.363 with respect to its packaging (the outer packaging of food that bears the label and does not contact the food). All other persons who manufacture, process, pack, transport, distribute, receive, hold, or import packaging are excluded from all of the

requirements of this subpart J of this final rule.

• Persons who place food directly in contact with its finished container are subject to all of the requirements of subpart J of this final rule as to the finished container that directly contacts that food. All other persons who manufacture, process, pack, transport, distribute, receive, hold, or import the

finished container that directly contacts the food are excluded from the requirements of subpart J of this final rule as to the finished container, except §§ 1.361 and 1.363.

• Persons who distribute food directly to consumers are excluded from the requirement in § 1.345 to establish and maintain records to identify the immediate subsequent recipients as to those transactions. The term ‘‘consumers’’ does not include businesses.

• Persons who operate retail food establishments that distribute food to persons who are not consumers are subject to all of the requirements in subpart J of this final rule. However, the requirements in § 1.345 to establish and maintain records to identify the nontransporter and transporter immediate

subsequent recipients that are not consumers applies as to those transactions only to the extent the information is reasonably available.

• Persons who manufacture, process, pack, transport, distribute, receive, hold, or import food for personal consumption are excluded from all of the requirements of subpart J of this final rule.

• Persons who receive or hold food on behalf of specific individual

consumers and who are not also parties to the transaction and who are not in the business of distributing food are excluded from all of the requirements of subpart J of this final rule.

• The regulations in subpart J of this final rule do not require duplication of existing records if those records contain all of the information required by the subpart. Furthermore, persons can supplement existing records with any new information required by this final rule instead of creating an entirely new record containing both existing and new information.

• Persons who manufacture, process, pack, distribute, receive, hold, or import food in the United States must establish and maintain the following records to identify the immediate previous sources and immediate subsequent recipients for all food they receive and release, unless otherwise excluded from the requirements of subpart J of this final rule:

• Name, address, telephone number and, if available, fax number, and email address of the immediate previous source and subsequent recipient;

• Adequate description;

• Date received or released;

• For persons who manufacturer, process, or pack food, the lot or code number or other identifier;

• Quantity and how the food is packaged; and

• Name, address, telephone number and, if available, fax number, and email address of the transporter who transported the food to and from you.

• Persons who have possession, custody, or control of food in the United States for the sole purpose of transporting the food, or foreign persons who transport food in the United States, regardless of whether they have possession, custody, or control of the food for the sole purpose of transporting that food

(transporters), can meet the requirements of subpart J of this final rule by:

(1) Establishing and maintaining the records listed in § 1.352(a); or

(2) Establishing and maintaining specified information that is in the records required of roadway interstate transporters by the Department of Transportation’s (DOT’s) Federal Motor Carrier Safety Administration (FMCSA) contained in 49 CFR 373.101 and 373.103 as of the date of publication of this final rule; or

(3) Establishing and maintaining specified information that is in the records required of rail and water interstate transporters by the DOT’s Surface Transportation Board (STB) contained in 49 CFR 1035.1 and 1035.2 as of the date of publication of this rule; or

(4) Establishing and maintaining specified information that is in the records required of international air transporters on air waybills by the Warsaw Convention as Amended at the Hague, 1995 and by Protocol No. 4 of Montreal, 1975 (Warsaw Convention); or

(5) Entering into an agreement with a nontransporter immediate previous source (if located in the United States) or immediate subsequent recipient (if located in the United States) to establish, maintain, or establish and maintain, the required records in options 1 or 2 of the previous paragraphs. The agreement must contain certain elements specified in § 1.352(e).

• If you are a nontransporter, you must retain for 6 months after the dates you receive and release the food all required records for any food for which a significant risk of spoilage, loss of value, or loss of palatability occurs within

60 days after the date you receive or release the food.

• If you are a nontransporter, you must retain for 1 year after the dates you receive and release the food all required records for any food for which a significant risk of spoilage, loss of value, or loss of palatability occurs only after a minimum of 60 days, but within 6 months, after the date you receive

or release the food.

• If you are a nontransporter, you must retain for 2 years after the dates you receive and release the food all required records for any food for which a significant risk of spoilage, loss of value, or loss of palatability does not occur sooner than 6 months after the date you receive or release the food, including foods preserved by freezing, dehydrating, or being placed in a hermetically

sealed container.

• If you are a nontransporter, you must retain for 1 year after the dates you receive and release the food all required records for animal food, including pet food.

• Transporters of food (or specified persons who agree to establish and maintain required records under agreements with transporters) in the United States must retain records for 6 months for any food having a significant risk of spoilage, loss of value, or loss of palatability within 60 days after the date

the transporter receives or releases the food.

• Transporters of food (or specified persons who agree to establish and maintain required records under agreements with

transporters) in the United States must retain records for 1 year for any food having a significant risk of spoilage, loss of value, or loss of palatability only after a minimum of 60 days after the date the transporter receives or releases the food.

• Records must be made available as soon as possible, not to exceed 24 hours from the time of receipt of the official request.

• Failure to establish or maintain records or refusal to permit access to or verification or copying of any record is a prohibited act under section 301 of the FD&C Act.

• The compliance date for the records establishment and maintenance requirements is [insert date 12 months after date of publication in the Federal Register], except that the compliance date for small businesses employing fewer that 500, but more than 10 full-time equivalent employees is [insert date

18 months after date of publication in the Federal Register], and the compliance date for very small businesses that employ 10 or fewer full-time equivalent employees is [insert date 24 months after date of publication in the Federal Register].

B. Significant Changes FDA Made to the Proposed Rule

FDA made the following significant changes to the proposed rule:

• All foreign persons, except foreign persons who transport food in the United States, are excluded from all of the requirements in subpart J of this final rule. A foreign person transporting food in the United States is subject

to the requirements for transporters in the subpart.

requirements of subpart J of this final rule. Persons who manufacture, process, pack, transport, distribute, receive, hold, or import food contact substances other than the finished container that directly contacts the food are excluded from all of the requirements of subpart J, except §§ 1.361 and 1.363.

requirements of subpart J as to the finished container, except §§ 1.361 and 1.363.

• Persons who receive or hold food on behalf of specific individual

consumers and who are not also parties to the transaction and who are not in the business of distributing food are excluded from all of the requirements of subpart J.

• Transporters can meet their obligation to establish and maintain records in the following ways: (1) Keeping the records listed in § 1.352(a); (2) keeping the records listed in § 1.352(b), which contain information also currently required of roadway interstate transporters under the FMCSA regulations as of the date of publication of this final rule; (3) keeping the records listed in

§ 1.352(c), which contain information also currently required of rail and water interstate transporters under the STB regulations as of the date of publication of this final rule; (4) keeping the records listed in § 1.352(d), which contain information also currently required of international air transporters on air waybills under the Warsaw Convention; or (5) entering into an agreement with

a nontransporter immediate previous source in the United States or a nontransporter immediate subsequent recipient in the United States to keep records for them. The agreement must contain certain elements specified in § 1.352(c). Intrastate transporters must also establish and maintain records

under this final rule and can meet this obligation by complying with either § 1.352(a), (b), (c), (d), or (e).

• Foreign persons who transport food in the United States, whether or not they have possession, custody, or control of the food for the sole purpose of transporting, must comply with § 1.352 of subpart J of this final rule.

• The exclusion for pet food not subject to the recordkeeping provisions of the animal proteins prohibited in ruminant feed regulation (BSE rule) (62 FR 30935, June 5, 1997) has been deleted.

• The definition of ‘‘farm’’ now states that washing, trimming of outer leaves, and cooling produce are part of harvesting.

• The definition of ‘‘farm’’ now includes facilities that pack or hold food, provided that all food used in such activities is grown, raised, or consumed on that farm or another farm under the same ownership.

• ‘‘Holding’’ has been defined and means ‘‘storage of food.’’ Holding facilities include warehouses, cold storage facilities, storage silos, grain elevators, and liquid storage tanks.

• ‘‘Packaging’’ has been defined and means ‘‘the outer packaging of food that bears the label and does not contact the food. Packaging does not include food contact substances as they are defined in section 409(h)(6) of the FD&C Act (21 U.S.C. 348(h)(6)).’’

• Recipe has been defined to mean the formula, including ingredients,quantities, and instructions, necessary to manufacture a food product. Because a recipe must have all three elements, a list of the ingredients used to manufacture a product without quantity information and manufacturing instructions is not a recipe.

• The partial exclusion for retail food establishments has been replaced with a partial exclusion for persons who distribute food directly to consumers.

Persons who distribute food directly to consumers are excluded fromestablishing and maintaining records required by § 1.345 to identify the nontransporter and transporter immediate subsequent recipients as to those transactions. Persons who distribute food to businesses must establish and maintain records to identify the nontransporter and transporter immediate subsequent recipients to the extent that information is reasonably available,

for example when the purchaser has an established commercial account.

• The exclusion for retail facilities that are located in the same general physical location as a farm has been replaced with an exclusion for all retail food establishments that employ 10 or fewer full-time equivalent employees.

• An exclusion has been added for nonprofit food establishments.

• ‘‘Nonprofit food establishment’’ has been defined and means:

* * * a charitable entity that prepares or serves food directly to the consumer or otherwise provides food or meals for consumption by humans or animals in the United States. The term includes central food banks, soup kitchens, and nonprofit

food delivery services. To be considered a nonprofit food establishment, the establishment must meet the terms of section 501(c)(3) of the U.S. Internal Revenue

Code (26 U.S.C. 501(c)(3)).

• The requirement to record a ‘‘responsible individual’’ when identifying the immediate previous source, immediate subsequent recipient, and transporters has been deleted.

• The requirement to record ‘‘lot or code number or other identifier’’ has been deleted for all covered entities, except persons who manufacture, process, or pack food.

• The definition of perishable food has been deleted.

• The record retention periods for nontransporters have been changed to:

(1) 6 months for food for which a significant risk or spoilage, loss of value,or loss of palatability occurs within 60 days after the date you receive or releasethe food;

(2) 1 year for food for which a significant risk of spoilage, loss of

value, or loss of palatability occurs only after a minimum of 60 days, but within 6 months, after the date you receive or release the food; and

(3) 2 years for food for which a significant risk of spoilage, loss of value, or loss of palatability does not occur sooner than 6 months after the date you receive or release the food, including foods preserved by freezing, dehydrating, or being placed in a hermetically sealed container.

• The record retention periods for transporters (or specified persons who

agree to establish and maintain required records under agreements with

transporters) have been changed to 6 months for any food having a significant

risk or spoilage, loss of value, or loss of palatability within 60 days after the

date the food is received or released and 1 year for any food having a

significant risk or spoilage, loss of value, or loss of palatability only after a

minimum of 60 days after the date the food is received or released.

• The record availability requirements have been changed from 4 hours/

8 hours to ‘‘as soon as possible, not to exceed 24 hours from the time of receipt

of the official request.’’

• The compliance date for these regulations has changed to [insert date

12 months after date of publication in the Federal Register]. Small businesses

have [insert date 18 months after date of publication in the Federal Register]

of this final rule to come into compliance with these regulations, and very

small businesses have [insert date 24 months after date of publication in the

Federal Register] of this final rule to come into compliance with these

regulations.

• The qualifying language ‘‘food intended for consumption in the United

States’’ has been removed from this final rule to ensure that all persons that

manufacture, process, pack, transport, distribute, receive, hold, or import food

in the United States that is intended for consumption are subject to this final

rule unless otherwise exempt.

III. Comments on the Proposed Rule

FDA received approximately 212 timely submissions in response to the

proposed rule, which raised approximately 220 major issues. To make it easier

to identify comments and FDA’s responses to the comments, the word

‘‘Comment’’ will appear in parentheses before the description of the comment,

and the word ‘‘Response’’ will appear in parentheses before FDA’s response.

FDA has also numbered each comment to make it easier to identify a particular

comment. The number assigned to each comment is purely for organizational

purposes and does not signify the comment’s value or importance or the order

in which it was submitted.

A. General Comments

(Comment 1) Some comments state that it would be beneficial for the

agency to provide the food industry with a model form that could be used

to record all the required information, with the option for the industry to use

this form or established recordkeeping systems. One comment requests that

the agency develop and provide respective freeware that could be available

as a compact disc (CD) or downloaded from the FDA Web site well in advance

of the compliance date of the final rule. A few comments request that the

regulations make clear that the model form is guidance and is not mandatory.

One comment suggests that as a way to show that the model form is guidance,

the agency should place the model form in an appendix to the regulations.

Several comments object to the inclusion of a model form in the

regulations. The comments oppose using any ‘‘one-size fits all’’ generic form

as an example or requirement. The comments suggest that affected businesses

should decide the format in which the required records should be kept as

dictated by specific business practices. The comments express concern that

example forms might become informal requirements out in the field even

though originally only meant as guidance.

One comment recommends that the agency provide further examples of

scenarios, rather than model forms, where records would be in compliance and

noncompliance with the final regulations.

In addition, several comments state that most food companies currently

maintain the chain-of-distribution information that is required by these

regulations. However, the diversity and complexity of the food industry means

that the information is maintained in many different ways and formats, ranging

from computerized records systems to file folders of paper records. The

recordkeeping systems are designed to provide the necessary information to

remove food from the market and prevent more food presenting the same risk

from entering the market. The comments state that the regulations should not

prescribe any specific manner or form of maintaining the information.

(Response) The provisions describe the specific information a covered

entity must keep, but do not specify the form or type of system in which those

records must be maintained. As stated in both the proposed and final § 1.330,

these provisions do not require duplication of existing records if those records

contain all of the information required by subpart J of this final rule. If a person

subject to these provisions keeps records of all of the information as required

by subpart J in compliance with other Federal, State, or local regulations, or

for any other reason, e.g., as a result of its own business practices, then those

records may be used to meet these requirements. Such records may include,

but are not limited to, purchase orders, bills of lading, invoices, and shipping

documents. Moreover, entities do not have to keep all of the information

required by this final rule in one set of records. If they have records containing

some of the required information, they may keep those existing records and

keep, either separately or in a combined form, any new data required by this

final rule. There is no obligation to create an entirely new record or

compilation of records containing both existing and new information, even if

the records containing some of the required information were not created at

the time the food was received or released.

Our intent is to have as little impact as possible on current recordkeeping

practices if those records can meet the requirements of these regulations. FDA

received numerous comments, as discussed further in section III.G of this

document on ‘‘Can existing records satisfy the requirements of this subpart?’’

that agreed with this approach to not specify the type and format of the records

and to allow flexibility to use existing recordkeeping systems. In addition,

comments state that individual companies are in a better position to decide

in what format records are needed based on knowledge of applicable business

practices and cost structures. For these reasons, FDA has not included a model

form in this final rule.

(Comment 2) Several comments state that the food industry has repeatedly

demonstrated the ability to identify and remove product from grocery store

shelves very quickly. The comments suggest that the diversion of substantial

resources that would be necessary to implement the agency’s proposed

regulations would not further food security, but instead would diminish the

overall efficiency of the food distribution system, which is necessary to serve

food safety and security needs and commercial purposes.

Further, some comments assert that the regulations are directed toward

enabling the Government to trace a product, rather than ensuring that

companies are able to trace the product through all the links in the chain of

custody of a food ingredient or product. The comments state that the intent

of the Bioterrorism Act was to ensure the existence of a system that fully

engages the institutional knowledge and logical procedures that already enable

the companies responsible for the production and distribution of food to

maintain an orderly and efficient nationwide supply chain and that also

currently make it possible to effect rapid recalls when necessary. The

comments state that the proposed regulations fail to capitalize on the

efficiencies of time and resources available through effective public/private

coordination, exemplified by the efforts that currently support effective recalls.

(Response) FDA recognizes that some of the food industry currently has

existing records that may satisfy all or part of these regulations; however, not

all of the food industry is currently able to conduct such traceback

investigations. Notwithstanding the ability of some of the food industry to

conduct such investigations, Congress authorized FDA through the

Bioterrorism Act to issue regulations requiring the establishment and

maintenance of records by persons who manufacture, process, pack, transport,

distribute, receive, hold or import food to enable FDA to identify the

immediate previous sources and immediate subsequent recipients of food,

including its packaging, to address credible threats of serious adverse health

consequences or death to humans or animals. FDA believes the information

required to be established and maintained in records in these regulations is

necessary to enable FDA to conduct an efficient and effective tracing

investigation, independent of what the food industry may be able to do. FDA

reiterates that it is not dictating the form or type of system to be used to satisfy

these requirements in these regulations. If the food industry already keeps all

of the information required by this final rule, then existing records can be used

to comply with this final rule. Further, FDA anticipates working closely with

the food industry in any tracing investigation.

In addition, recently FDA was significantly hampered in identifying the

source of contaminated food during a trace back investigation following a

Hepatitis A outbreak due to contaminated green onions. This outbreak

involved a distributor who purchased green onions from a variety of firms in

no predictable pattern and distributed them without recording brand and lot

information. The distributor did not keep records of the previous sources of

the green onions, which might have indicated a particular supplier of green

onions during the specified exposure time period. It was impossible for

investigators to determine, from the distributor, the identity of the supplier

of the green onions that were sent to the implicated restaurant, and therefore

FDA had to spend time investigating all potential suppliers of the green onions

to identify the one supplier that supplied the restaurant. Speedy trace back

would have enabled FDA to prevent further distribution of contaminated

products sooner, thereby preventing more illnesses.

Further, 20 percent of all tracing investigations are prematurely terminated

due to deficiencies in recordkeeping. A reduction of just one premature

termination could prevent at least 53 people from becoming ill. Requiring

adequate records to complete a tracing investigation reduces trace-back times

by 8 days. This increased efficiency facilitates preventive action in 15 to 18

percent of outbreaks. The speed with which a tracing investigation can be

conducted is of vital importance in reducing the number of people who could

potentially become ill. Access to records that do not exist or that do not contain

sufficient information (with no requirement to retain them or make them

available in a timely fashion) is not an efficient and effective way to conduct

a tracing investigation during a public health emergency involving serious

adverse health consequences or death to humans or animals.

(Comment 3) One comment states that established industry practice with

regard to investigating product defects and conducting product recalls is

consistent with the terms of the Bioterrorism Act allowing for the rapid

identification of the immediate previous source and immediate subsequent

recipient of foods. The comment asserts that the industry’s response to the

events of September 11, 2001, has strengthened these existing practices. The

comment explains that as an inevitable result of industry’s commitment to

Responsible Care Security Code No. 7 and increased requests from customers,

emphasis is now shifting from security at fixed plant sites and major

distribution centers to security of products throughout the value chain. This

shift in emphasis enhances industry’s existing traceback capabilities. The

comment asserts that the controls needed to effectively trace the source and

recipient of foods are already in place.

(Response) As explained in the response to comment 2, these provisions

are intended to help ensure that FDA has the information it needs to identify

the immediate previous sources and immediate subsequent recipients of food

to address credible threats of serious adverse health consequences or death

to humans or animals.

(Comment 4) One comment asserts that when food presents a risk of

serious adverse health consequences or death to humans or animals, a class

I recall is used and can quickly eliminate problems, whereas recordkeeping,

at best, will get a message to the retail locations where products were placed

on sale to consumers. The comment questions the benefit of the copious

amounts of information and possible implementation of an intricate new

product tracking system required by the regulations. The comment asserts that

class I recalls will continue to be the appropriate means by which a potential

hazard is handled and that requiring the expenditure of significant resources

to develop a new system in the absence of a Congressional mandate or a

genuine need is questionable. The comment recommends that FDA continue

to rely upon the proven capabilities of class I recalls and cooperation with

the food industry. The comment suggests that FDA should develop a system

to contact the appropriate companies to engage their assistance in addressing

threats to the food supply, rather than requiring the onerous recordkeeping

specified in the regulations.

(Response) This comment assumes that the contaminated food and its

whereabouts are known completely, which may not always be the case. As

such, the need exists for records to be able to trace forward fully to all locations

where the food was shipped, as well as trace backwards to locate any similarly

contaminated food shipped to all other locations. Moreover, class I recalls are

voluntary measures only. In the Bioterrorism Act, Congress has given FDA the

means both to establish requirements for establishment and maintenance of

records, and to administratively detain, on its own initiative, food for which

FDA has credible evidence or information that the food presents a threat of

serious adverse health consequences or death to humans or animals (section

303 of the Bioterrorism Act). In addition, the records are needed not only to

help remove contaminated food from the market place, but also to help identify

the source of the contamination.

(Comment 5) A few comments state that, in the event of a serious product

issue or life-threatening situation, the only responsible action to take is to warn

the public through the media to prevent further use or distribution of the

product. The communication vehicle used to disseminate the warning should

be based on the severity of potential harm or health consequences. Use of the

media also is necessary to influence facilities to check their store stock and

for consumers to check their refrigerators and pantries for the affected product.

(Response) FDA agrees that the use of warnings to the public about specific

products is important. Indeed, FDA has used this approach many times.

Nonetheless, records will ensure that FDA can perform trace forward to remove

the problem food from the market and traceback to identify the source of the

problem. These recordkeeping requirements will also enable FDA to identify

the problem food more specifically and, thus, FDA can target its public

warnings on the specific problematic food.

(Comment 6) A few comments request that the agency add a ‘‘pipeline

provision’’ that allows the use of NA (not available) in place of information

where ingredient records were not maintained. The comments state that many

ongoing processing operations will have some ingredients on site that have

been purchased and housed in facilities for some time prior to the

implementation of these regulations. In these cases, it would be a significant

manpower burden (or perhaps not possible at all) to obtain or attempt to

recreate all the required information on the source of those ingredients. The

comments note that these ingredients have been used in food production

without incident and it would be unlikely they would be involved in an act

of terrorism.

(Response) There is no requirement to establish and maintain records for

food ingredients you received before the compliance date of these regulations.

Under that scenario, however, you must establish and maintain records of that

food when you release it after the compliance date of the regulations. For

example, if a commercial bread bakery receives flour, eggs, and salt before the

compliance date of this final rule, it does not need to keep records of the

immediate previous source of when it received that food. Once the bakery uses

these ingredients to bake the bread and releases the bread to nonconsumers

after the compliance date of the rule, the bakery must keep the records required

by § 1.345 of this final rule regarding the immediate subsequent recipients of

the bread.

(Comment 7) One comment recommends the use of United Code Council

standards, a system of globally recognized and implemented standards that

enables traceability of products and identification of trading parties/recipients,

through all locations of the supply chain.

(Response) FDA does not agree. The agency has determined that the least

burdensome way of issuing the recordkeeping requirements is to specify the

information that must be contained in the records, but not the format in which

the records are kept. Indeed, the agency received numerous comments that

argued that covered entities should be allowed to use existing records and

systems.

(Comment 8) One comment requests that source labeling, including

country-of-origin labeling, be required as a component of an effective traceback

program in the event of a food emergency. The comment states that some

industries have already developed technologies such as barcodes, stamps,

stickers, or tags to identify the source of produce as well as software to assist

in more accurate traceback to the grower/packer level.

(Response) FDA does not agree. At this time, FDA does not believe this

information is necessary to enable a traceback. FDA believes the requirements

of the final regulations for the establishment and maintenance of records to

identify the immediate previous sources and immediate subsequent recipients

of food in order to address credible threats of serious adverse health

consequences or death to humans or animals are sufficient.

(Comment 9) Some comments ask that the agency generate more publicity

on the regulations and provide the industry with educational materials and

training. One comment states that because food wholesale distributors have

no significant contact with FDA personnel and procedures, they have a limited

understanding of the requirements. One comment asks that the agency help

promote and educate the industry abroad on the recordkeeping regulations.

Another comment asks that FDA provide materials in other languages. One

comment asks that the agency develop a strong communications program to

disseminate the new regulations once they become final because the fresh

produce industry and its transportation partners are highly diverse and

fragmented. The comment states that independent truckers in particular need

to be made aware of the regulations because the fresh produce industry in the

United States relies heavily on independent truckers to move fresh fruits and

vegetables to market quickly.

(Response) FDA conducted extensive outreach on the proposed

recordkeeping rule, including having relevant FDA staff attend 6 international

meetings and more than 100 domestic meetings to ensure that affected parties

were aware of the Bioterrorism Act requirements. On May 7, 2003, FDA held

a public meeting (via satellite downlink) to discuss the recordkeeping and

administrative detention proposed rules. See 68 FR 16998 (April 8, 2003) or

http://www.cfsan.fda.gov/~dms/fsbttraz.html. Nearly 1,000 participants in

North and South America and the Caribbean viewed that live broadcast. The

meeting was later rebroadcast to Europe, Asia, Africa, and the Pacific (areas

in different time zones). FDA has also provided transcripts of the broadcast

in English, French, and Spanish (the three official World Trade Organization

languages) on the agency’s Web site. In addition to this outreach to the affected

industry, FDA has conducted outreach on the proposed rule to States.

FDA plans similar outreach directed to stakeholders following publication

of the final rule implementing the recordkeeping provisions of the Bioterrorism

Act. Our outreach will include the following:

• Materials and events for the media;

• Domestic outreach meetings to States and industry;

• International outreach to U.S. trading partners;

• Presentations by FDA officials and exhibits at professional and trade

conferences and meetings to inform industry and State and local government

representatives of the new regulations and their requirements; and

• Cooperative arrangements with other Federal agencies to ensure that

information on the final regulations and their requirements is disseminated

to affected companies and individuals.

More specifics regarding each of these will be included on FDA’s Web

site at http://www.fda.gov/oc/bioterrorism/bioact.html.

(Comment 10) Several comments suggest that, to lessen the burden to the

food industry, FDA needs to coordinate with other local, Federal, and State

government security programs in establishing the final recordkeeping

regulations.

(Response) In issuing these recordkeeping regulations, FDA has stated that

records established and maintained as a result of local, State, or other Federal

regulations, or as a matter of routine business practice, need not be duplicated

if the records contain all the information required by these regulations. Further,

if existing records contain some, but not all, of the required information,

persons may supplement existing records with the additional information

required under this final rule.

(Comment 11) One comment asks that the final rule require that upstream

entities provide all the required information to downstream entities in the food

distribution system. The comment states that distribution centers that receive

and store food and retail outlets that hold and sell food do not know and

should not be required to determine many of the information items required

under the proposed regulation. The comment states that requiring that any

information be passed through the system from the first point of distribution,

preferably through electronic means, would alleviate some of the burden of

the recordkeeping requirements on downstream entities.

(Response) The agency does not agree completely that distribution centers

and retail outlets do not know many of the information items. The agency

agrees, however, that including information pertaining to lot or code numbers

of foods in the required records is not practical for distribution centers and

retail outlets, given current business practices. FDA has, therefore, deleted this

requirement. Instead, the final regulation now only requires that persons who

manufacture, process, or pack food keep records on the lot or code number

or other identifier of the food, and only to the extent this information exists.

Moreover, to minimize the burden this regulation may have on affected parties,

FDA is not specifying the form or format of the records that must be established

and maintained and is not requiring electronic records.

(Comment 12) Several comments applaud the agency’s efforts in proposing

a rule that appears to be designed to work with the food industry as efficiently

and effectively as possible to address credible threats without imposing undue

burdens. One comment urges the agency to issue the final regulations as

expeditiously as possible to enhance compliance with the provisions of the

Bioterrorism Act. The comment states that, by finalizing the regulations in

conjunction with the interim final rules entitled ‘‘Registration of Food

Facilities Under the Public Health Security and Bioterrorism Preparedness and

Response Act of 2002’’ (the registration interim final rule) (68 FR 58894,

October 10, 2003) and ‘‘Prior Notice of Imported Food Under the Public Health

Security and Bioterrorism Preparedness and Response Act of 2002’’ (the prior

notice interim final rule) (68 FR 58974, October 10, 2003), the education and

training that will be necessary for compliance with the regulations can be done

together and the internal policy and procedures for companies can be designed

to meet all of the obligations under the final rule. The comment further states

that this is the reason that Congress intended regulations to be issued within

18 months of the effective date of the Bioterrorism Act.

(Response) The agency has acted expeditiously in issuing all of the

regulations under the Bioterrorism Act and has developed and published final

regulations as quickly as possible. With respect to education and training, as

stated previously, the agency intends to conduct extensive outreach to

stakeholders for this final rule that is similar to outreach the agency conducted

for the registration and prior notice interim final rules.

(Comment 13) One comment requests clarification regarding the level of

recordkeeping that will be expected at each facility maintained by a vertically

integrated company. The comment explains that a vertically integrated

company has various facilities involved in the growing and processing of bulk

ingredients as well as the manufacturing and marketing of finished products.

Some of the requirements for recordkeeping could result in duplication of

effort if each facility within the company is required to maintain separate

records, even though the overall records are available at company headquarters

or some central location. One comment requests that the final rule clarify what

is meant by the term ‘‘released’’ and the relationship of this term to holding

legal title, or ownership of the food. Another comment suggests that FDA

clarify that only at such time as the food leaves the possession and control

of one firm and enters into the possession and control of another firm, whether

or not via a transporter, would the recordkeeping requirement apply. The

comment maintains that any other interpretation of the statute would impose

a crushing burden of internal tracking systems and paperwork that would

detract from most firms’ abilities to do business and is well beyond the intent

of the Bioterrorism Act.

(Response) The records required by these regulations are those that FDA

needs for inspection to identify the immediate previous sources and the

immediate subsequent recipients of food. ‘‘Immediate previous source’’ has

been defined in § 1.328 of the final rule to mean ‘‘a person who owns food

or who holds, processes, packs, imports, receives, or distributes food or food

packaging, and that last had an article of food before transferring it to another

person.’’ Unless otherwise exempt (i.e., a farm), a ‘‘vertically integrated

company’’ would be required to identify the sources of all food received from

its immediate previous sources. Once the vertically integrated company

receives the food and keeps information on its immediate previous sources,

that vertically integrated company does not need to keep additional records

until it releases the food to another person. Unless otherwise exempt, at the

time the vertically integrated company releases the food, it is required to

identify the immediate subsequent recipients of that food.

As an example, if a company buys food from its immediate previous

source (company A), then the company further processes the food, holds the

food, transports the food, and distributes the food to a grocery store, then the

vertically integrated company would only have to keep records on its

immediate previous source (company A) and its immediate subsequent

recipient (grocery store). The vertically integrated company need not keep

records of all the covered activities (manufacturing, processing, packing,

transporting, etc.) conducted by that company while it has the food.

Of course, when the integrator has any records or other information

available to FDA under sections 414 and 704(a) of the FD&C Act, then FDA

would have access to those records if FDA has a reasonable belief that the

food is adulterated and presents a threat of serious adverse health

consequences or death to humans or animals.

B. Foreign Trade Issues

(Comment 14) Several comments representing foreign governments and

international associations agree in principle to the recordkeeping requirements

provided the requirements are based on a sound risk assessment and do not

restrict trade more than necessary to effectively address potential risks. Some

comments note that there is no risk assessment provided to justify the

proposed measures required by the World Trade Organization Agreement on

the Application of Sanitary and Phytosanitary Measures (SPS agreement).

Several comments representing foreign governments and businesses request

that FDA work with foreign governments to develop common standards and

requirements and to facilitate trade flow. Some foreign comments argue that

the result of the onerous recordkeeping burden in the regulations will be the

elimination of many legitimate and safe food distribution businesses and a

serious reduction in global food trade. One comment suggests that the

regulations will adversely impact trade, as they are likely to increase

uncertainty and costs for foreign exporters. Small and medium sized foreign

companies in particular may be prevented from continuing to export to the

United States for these reasons. One comment is concerned that the regulations

may lead to the unintended consequence of foreign countries imposing the

same requirements of U.S. goods in foreign trade.

(Response) FDA considers that these foreign trade comments are now

moot, given the scope of these final regulations. These final regulations do not

apply to foreign persons, except foreign persons transporting food in the

United States, who are treated no differently than domestic food transporters

under these final regulations. FDA does not believe that foreign persons who

transport food in the United States will incur additional costs as a result of

these regulations, because FDA assumes that they will choose to comply with

§ 1.352 of this final rule by establishing and maintaining the records already

required by FMCSA. See the response to comment 82, later in this document.

C. Comments on Who is Subject to This Subpart? (Proposed § 1.326)

1. General

(Comment 15) Several comments seek clarification on who is covered by

the proposed regulation. Comments ask if the provisions of the regulations

apply to port facilities, such as warehouses, or storage and inspection facilities

in land, sea, or airports that belong to private companies and government

bodies for food control in the country of shipping and/or origin.

(Response) Persons who manufacture, process, pack, transport, distribute,

receive, hold, or import food in the United States are subject to these

regulations. ‘‘Person’’ is defined in section 201(e) of the FD&C Act (21 U.S.C.

321 (e)) and includes any ‘‘individual, partnership, corporation, and

association.’’ Therefore, any person located in any State or Territory of the

United States, the District of Columbia, or the Commonwealth of Puerto Rico

who manufactures, processes, packs, transports, distributes, receives, holds, or

imports food is included within the term ‘‘person’’. ‘‘Holding’’ has been

defined in § 1.328 of the final rule to mean ‘‘storage of food. Holding facilities

include warehouses, cold storage facilities, storage silos, grain elevators, and

liquid storage tanks.’’ Accordingly, port facilities, such as warehouses, or

storage facilities that are located in any State or Territory of the United States,

the District of Columbia, or the Commonwealth of Puerto Rico are subject to

these regulations as they are ‘‘persons’’ who are holding food.

(Comment 16) One comment seeks clarification on whether the proposed

regulation applies to a carrier’s freight brokers. The comment states that,

although these brokers never have actual physical possession of freight, they

act as the middleman for carriers and shippers and have knowledge of where

the freight came from and where it went. A few comments ask that FDA clarify

that customs brokers are excluded from the regulations. The comment indicates

that because § 1.326 of the proposed regulations applies to, inter alia, persons

that ‘‘import’’ food, it could be interpreted to include customs brokers, who

act only as agents for the importer. A comment notes that customs brokers

have only the information needed to file an entry on behalf of the actual

importer and to obtain release of the food from U.S. Customs and Border

Protection (CBP). However, according to the comment, customs brokers do not

own food or hold, process, pack, import, receive, or distribute food for

purposes other than transportation. The comment notes that applying the

recordkeeping requirements to customs brokers would cause redundant and

burdensome recordkeeping requirements for them.

(Response) FDA clarifies that the recordkeeping requirements do not apply

to brokers who act only to facilitate distribution, sale, or transportation of food

by processing information or paperwork associated with these functions.

Brokers who do not directly manufacture, process, pack, transport, distribute,

receive, hold, or import food are not subject to the requirements of the

regulation.

(Comment 17) One comment asks that FDA specify whether the regulation

applies to the importer of record or to the initial U.S. recipient when the

merchandise enters the country. The comment notes that this clarification

could affect who is responsible for the establishment and maintenance of

records.

(Response) The final rule applies to persons who manufacture, process,

pack, transport, distribute, receive, hold, or import food in the United States,

unless the person qualifies for an exclusion in § 1.327 of the final rule. An

importer of record or an initial U.S. recipient that is involved in one or more

of the identified activities must establish and maintain the required records.

(Comment 18) Several comments express concern because the proposed

regulation applies only to domestic, for-hire transporters, and foreign

transporters that enter the United States, as well as domestic private

transporters, are not covered. Comments state that the regulation should apply

uniformly to all transporters, foreign and domestic, for-hire and private, to

ensure that no group has an unfair competitive advantage.

(Response) All persons transporting food in the United States must meet

the requirements of subpart J of this final rule, regardless of whether they are

‘‘for hire’’ or ‘‘private.’’ FDA notes, however, that if a manufacturer located

in the United States transports the food in its own company trucks, then it

must comply with the recordkeeping requirements for nontransporters as

opposed to those applicable to transporters because FDA does not need the

facility to keep duplicative records of the food while it is in that facility’s

control. However, if a foreign person, such as a person who manufactures food,

transports food in the United States, it must comply with the requirements

for transporters, even if it transports the food in the United States itself. This

ensures that FDA will have the ability to traceback the food that is transported

in the United States, even if the facility from which the food originates is an

exempt foreign facility under subpart J.

(Comment 19) One comment notes that CBP’s current requirements apply

to trucking companies that transport imported food into the United States. The

comment suggests that FDA coordinate with CBP to get data from them in the

event of a threat to the nation’s food supply, rather than develop its own

distinct recordkeeping regulations.

(Response) The records required to be kept by these regulations are those

FDA needs to help identify the immediate previous sources and immediate

subsequent recipients of food. Section 1.361 of the final rule allows FDA access

to transporters’ existing records when FDA has a reasonable belief that an

article of food is adulterated and presents a threat of serious adverse health

consequences or death to humans or animals. When conducting a traceback,

FDA needs access to the required records at each point in the distribution

chain for the implicated food. Thus, FDA will expect to obtain applicable

records from transportation companies in the distribution chain. Although

FDA may contact, and coordinate tracebacks with, other Federal agencies,

including CBP, the agency expects transportation companies to comply with

the recordkeeping and access provisions of these regulations. FDA notes that

entities keeping records to satisfy CBP’s regulations may use those same

records to satisfy some or all of the requirements of this final rule if those

records contain some or all of the information required by subpart J of this

final rule. Entities also can supplement existing records with any new data

required by this regulation, instead of creating an entirely new record

containing both existing and new information.

(Comment 20) A few comments ask FDA to clarify what constitutes

‘‘holding’’ food, who FDA considers to be ‘‘holders of food,’’ and under what

circumstances food is being held in transport. The comment notes that the lack

of clarity leaves a carrier’s terminal operating facility, gas stations, truck stops,

and even trucks themselves vulnerable to being considered as ‘‘holders of

food’’ and thereby subject to burdensome reporting requirements. Comments

also ask FDA to exclude trucks, truck terminals, and facilities from the

definition of ‘‘holding,’’ stating that this would be consistent with the intent

of the law and the realities of the trucking industry’s business practices. One

comment asks whether food held for short periods of time in a trucking

terminal during cross-dock operations meets the definition of ‘‘holding.’’ One

comment states that there are certain areas in the supply chain that provide

temporary space for food during transit and that these areas should not be

considered to be ‘‘holding’’ or ‘‘storing’’ food and subject to the recordkeeping

requirements. The comment notes that some sites serve as transitory staging

areas where produce is momentarily held before transportation and that,

because of the perishable nature of the product and the desire to transport the

fresh commodity rapidly, produce moves from these staging areas as quickly

as possible.

(Response) ‘‘Holding’’ means storage of food. Holding facilities include

warehouses, cold storage facilities, storage silos, grain elevators, and liquid

storage tanks. The recordkeeping requirements in §§ 1.337 and 1.345 of this

final rule apply to persons who ‘‘hold’’ food for purposes other than

transportation. As defined in § 1.328 of this final rule, a ‘‘transporter’’ is:

* * * a person who has possession, custody, or control of an article of food in

the United States for the sole purpose of transporting the food, whether by road, rail,

water, or air. Transporter also includes a foreign person that transports food in the

United States, regardless of whether that person has possession, custody, or control

of that food for the sole purpose of transporting the food.* * *

Truck terminals or similar facilities that are part of the transportation

process and merely provide a location for trucks to transfer possession,

custody, or control to another entity are not subject to the requirements in

§§ 1.337 and 1.345 of the final rule, unless possession, custody, or control is

transferred to that terminal or facility.

(Comment 21) One comment seeks clarification on whether a ‘‘customer,’’

such as an office complex, would be required to maintain records if it receives

and stores a food, such as bottled water, in the customer’s own storage area

for subsequent distribution to the various offices within the complex. The

comment also asks whether, for bottled water, such a customer would also be

the immediate previous source for bottles that are returned to the bottler for

reuse.

(Response) FDA has added an exclusion to the final rule for persons who

receive or hold food on behalf of specific individual consumers and who are

not also parties to the transaction and who are not in the business of

distributing food. This exclusion covers person such as a hotel concierge, the

reception desk in an apartment building, and an office complex that receives

bottled water as described by the comment. FDA has added this exclusion

because such persons are not parties to the transaction and records from such

person are not necessary to identify the immediate previous sources and

immediate subsequent recipients of food to address credible threats of serious

adverse health consequences or death.

The comment also asks whether, for bottled water, such a customer would

also be the immediate previous source for bottles that are returned to the

bottler for reuse. A customer who returns bottles to the bottler would be the

nontransporter immediate previous source of the bottles (§ 1.328 of the final

rule). As with other sources of its bottles (e.g., a bottle manufacturer), the

bottler would be required to keep records of bottles received from customers

for reuse.

(Comment 22) One comment asks that FDA clarify in the regulation that

domestic grain-handling, feed manufacturing/ingredient or processing facilities

dedicated solely to exporting bulk or processed agricultural commodities to

other countries are exempt from the recordkeeping requirement unless the

commodities, products, or byproducts they handle are introduced into U.S.

commerce. The comment states that this clarification would be consistent with

the statutory language and FDA’s proposed regulations.

(Response) The proposed rule applied to persons who manufacture,

process, pack, transport, distribute, receive, hold, or import food intended for

consumption in the United States, unless the person qualifies for an exclusion

in § 1.327. This provision has been changed in the final rule. The Bioterrorism

Act does not limit the recordkeeping authority to food that is consumed in

the United States. FDA’s intent in the proposed rule was to apply the

recordkeeping provisions to the full reach of section 306 of the Bioterrorism

Act with respect to domestic persons. In contrast, the registration interim final

rule that FDA issued under section 305 of the Bioterrorism Act only requires

those facilities that manufacture, process, pack, or hold food for consumption

in the United States to register. The proposed recordkeeping rule inadvertently

added the same qualifier as is in the registration interim final rule: That is,

it only applied to food that was ‘‘intended for consumption in the United

States.’’ FDA is removing this qualifying language from the final rule to ensure

that all persons that manufacture, process, pack, transport, distribute, receive,

hold, or import food in the United States are subject to this final rule unless

otherwise exempt. FDA believes this coverage is necessary because foods

intended for export could easily be diverted into domestic commerce. In

addition, not everyone in the food supply chain may know if the food is

intended for consumption in the U.S. or intended solely for export. Therefore,

such a limitation in this rulemaking could create holes in a tracing

investigation. Further, FDA is concerned that exempting foods intended for

export from the recordkeeping regulations could lead to such foods being

targeted for tampering and reintroduction into domestic commerce because

they would prove more intractable to tracing investigations.

(Comment 23) One comment asks whether small growers who provide a

raw agricultural commodity to a cooperative must keep records and whether

the cooperative must list all of the growers.

(Response) Growers of raw agricultural commodities that meet the

definition of ‘‘farm’’ in § 1.328 are excluded from the requirements of subpart

J of this final rule. A cooperative that accumulates raw agricultural

commodities from growers, and does not meet the exemption for retail food

establishments that employ 10 or fewer full-time equivalent employees in

§ 1.327(f) of the final rule, is subject to the requirements in § 1.337 of the final

rule regarding the immediate previous sources of food. Distribution of food

from the cooperative directly to consumers is excluded from the requirements

of § 1.345 of the final rule regarding the immediate subsequent recipients of

food.

2. Intrastate

(Comment 24) One comment agrees that the requirement for U.S. domestic

firms, whether shipping interstate or intrastate, to establish and maintain

records as provided in the proposed regulation will maximize FDA’s capability

to implement traceback procedures within the borders of the United States.

Another comment states that a finding that a certain food is intentionally

contaminated—even if only distributed or sold locally—could have

widespread, nationwide, even international, economic implications. The

comment states that the recent ‘‘mad cow’’ episode in Canada demonstrates

that restrictions might be imposed on the distribution and sale of implicated

products, or consumers across the country may decide not to buy the products

thus impacting the economy as a whole. As a result, the comment states that

FDA is correct in concluding that all persons who manufacture, process, pack,

transport, distribute, receive, hold, or import food should be subject to the

recordkeeping requirements whether or not they directly engage in interstate

activities involving food.

However, another comment states that FDA’s intent to assert jurisdiction

over food, whether or not it enters interstate commerce, may be

unconstitutional. The comment notes that this assertion of power to regulate

food in intrastate commerce is inconsistent with limitations imposed by the

Commerce Clause of the U.S. Constitution, which generally authorizes

Congress to regulate purely interstate commerce only. The comment further

states that FDA should have assumed that Congress did not intend to violate

the Constitution, and should revise the proposed rule accordingly. Another

comment states that the FDA is proposing that domestic persons must maintain

appropriate records as stipulated by the proposed regulations regardless of

whether their food enters interstate commerce. The comment adds that

appropriate State, local, and municipal regulatory bodies have authority to

regulate domestic persons who manufacture, process, pack, transport,

distribute, receive, or hold food intended for human or animal consumption,

when intended solely for intrastate commerce in the United States. The

comment argues that the proposed regulations regarding recordkeeping should

not be expanded beyond what has been set forth in the Bioterrorism Act.

Another comment states that the FMCSA has guidelines for determining

whether carriers and drivers are engaged in interstate commerce and provides

the following definition in 49 CFR part 390.5:

Interstate commerce means trade, traffic, or transportation in the United States—

(1) Between a place in a State and a place outside of such State (including a place

outside of the United States);

(2) Between two places in a State through another State or a place outside of

the United States; or

(3) Between two places in a State as part of trade, traffic, or transportation

originating or terminating outside the State or the United States.

(Response) In the preamble to the proposed rule, FDA sought comments

on its tentative conclusion that it has authority to require recordkeeping by

persons engaged only in intrastate commerce. FDA also sought comments on

how many intrastate persons would not be covered by one of the exclusions

from the recordkeeping requirements (e.g., the farm or restaurant exemption).

Based on consideration of the received comments and further review of the

provision of the Bioterrorism Act that provides FDA with the authority to

require the establishment and maintenance of records by all ‘‘persons’’ who

engage in specified activities involving food, FDA has concluded that the

Bioterrorism Act gives FDA authority to require persons to establish and

maintain records, whether or not they engage in interstate commerce, as long

as they fall within Congress’s power to legislate in this area.

FDA is mindful that its interpretation of the Bioterrorism Act should not

cast doubt on the constitutionality of the statute. (See Solid Waste Agency of

Northern Cook County v. U.S., 531 U.S. 159 (2001).) The agency has considered

the relevant provisions of the Bioterrorism Act, the comments submitted on

this issue, FDA’s responsibilities in implementing the Bioterrorism Act, and

the law interpreting the Commerce Clause of the Constitution (Article I, section

8). Based on these considerations, FDA is retaining § 1.326(b) as proposed, with

the result that all persons that manufacture, process, pack, transport, distribute,

receive, hold, or import food in the United States (unless otherwise exempt)

must establish and maintain records, even if food from the facility does not

enter interstate commerce.

The plain language of new section 414 of the FD&C Act does not exclude

a facility from recordkeeping because food from such facility does not enter

interstate commerce. Notably, sections 301 and 304 (21 U.S.C. 331 and 334)

of the FD&C Act demonstrate that Congress has included a specific interstate

commerce nexus (e.g., has explicitly required interstate commerce) in the

provisions of the FD&C Act when that is its intent. Accordingly, it is reasonable

to interpret the Bioterrorism Act as not limiting recordkeeping only to those

persons with a direct connection to interstate commerce. Congress’s power to

legislate under the Commerce Clause is very broad. We acknowledge that such

power is not without limits, see United States v. Lopez, 514 U.S. 549, 567

(1995); U.S. v. Morrison, 529 U.S. 598, 618 (2000), but these limits have to

be construed in light of relevant and enduring precedents.

In particular, in Lopez, supra, the Supreme Court acknowledged the

continuing vitality of Wickard v. Filburn, 317 U.S. 111 (1942), noting that:

* * * although Filburn’s own contribution to the demand for wheat may have

been trivial by itself, that was not ‘enough to remove him from the scope of federal

regulation where, as here, his contribution, taken together with that of many others

similarly situated, is far from trivial.’* * *

(Lopez, 514 U.S. at 556.) This principle applies squarely to the re