FDA Proposes Rules for Registration and Prior Notice Provisions of the Bioterrorism Act

By Scott Heselmeyer

     The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act) was signed into law last June to address concerns regarding the security of the U.S. food supply.  The primary Senate author of the Act was Pat Roberts (R-KS) who had previously served as Chairman of the House Agriculture Committee and currently serves as the Chairman of the Senate Select Committee on Intelligence. The Bioterrorism Act includes three key provisions relevant to agriculture - registration of food facilities, establishment and maintenance of records, and prior notice of imported food.  The Food and Drug Administration (FDA) is responsible for rulemaking in all three of these areas.

     On February 3, FDA published for comment proposed regulations for the Bioterrorism Act to implement the registration and prior provisions.  These proposed regulations are published in the February 3 issue of the Federal Register (68 Fed. Reg. 5378 and 5428, respectively).  Comments must be submitted to FDA by April 4, 2003.

     This article discusses these two sets of proposed regulation in some detail.  In particular, both the Bioterrorism Act and these regulations are quite ambiguous in spelling out who is exempt from registering with FDA under the Act.  These ambiguities have the potential to lead to a great amount of confusion within the agricultural industry, and they could have considerable cost implications when regulations are formulated regarding the maintenance of records.

Registration of Food Facilities

     Under the Bioterrorism Act, all domestic or foreign facilities that manufacture, process, pack, distribute, receive, or hold food for consumption by humans or animals in the U.S. must register with FDA no later than December 12, 2003, unless they are exempted under the act.  It is important to note that the term "food" is very broad and includes human food and animal feed, as well as live food animals.  Other terms, such as "hold," are also broadly defined.  "Holding" includes any storage of food (although "storage" is not defined). 

     There are several exemptions to this general rule.  One should be careful to read the descriptions of these exemptions (discussed in detail below) carefully before concluding a given business is, indeed, exempt.  The proposed regulations attempt to clarify who must register and give details regarding the registration process. 

Application and Exemptions

     The blanket rule of the Bioterrorism Act is that all facilities, foreign and domestic, engaged in the manufacturing, processing, packing, or holding of food for human and animal consumption in the U.S. must register unless the facility qualifies for one of the listed exceptions.  In the proposed rule, FDA interprets this to apply to all domestic facilities, regardless of whether they are engaged in interstate commerce.

     Although, the Act lists several very important exemptions and the proposed regulations provide further detail, both the Act and the proposed regulations present a great deal of ambiguity.  The language of the Act is very general, simply stating that the term "facilities…does not include farms, restaurants, other retail food establishments, non-profit establishments [that prepare or serve food], and fishing vessels."  Foreign facilities that produce food that undergoes further processing or packaging in another foreign facility are also exempt.  Finally, there is an exemption for facilities that are regulated exclusively by USDA (specifically, under the Federal Meat Inspection Act, Poultry Products Inspection Act, or Egg Products Inspection Act).  The proposed regulations offer more detail to these exemptions - providing effective guidance in some areas and very little in others.

     Regarding areas of exclusive USDA jurisdiction, the Bioterrorism Act specifically states that it shall not be construed to alter the jurisdiction between USDA and FDA.  As such, the proposed FDA regulations provide that any facility regulated exclusively, throughout the entire facility, by USDA is exempt from registration.  This would include such facilities as meat and poultry slaughterhouses.  Facilities jointly regulated by USDA and FDA, however, will be required to register.  For example, any egg processing facility that sells shell eggs is subject to regulation by FDA as well as USDA.  Such a facility is not exempt, and will be required to register with FDA.

Ambiguity in the "Farm" Exemption

     The language of the Bioterrorism Act regarding this exemption is quite vague - stating merely that "farms" are not "facilities" and thus indicating that farms are not required to register.  The problem is that the Act does not define the term "farm."  FDA has provided a more thorough definition of the term, but this definition is fraught with ambiguities and leads to many questions.  The proposed regulations define "farm" as follows:

Farm means a facility in one general physical location devoted to the growing of crops for food, the raising of animals for food (including seafood), or both.  The term "farm" includes:

(i) Facilities that pack or hold food, provided that all food used in such activities is grown or raised on that farm or is consumed on that farm; and
(ii) Facilities that manufacture/process food, provided that all food used in such activities is consumed on that farm or another farm under the same ownership.

     The preamble does not address, however, to what extent an operation must be "devoted" to growing crops or raising animals.  Most farms engage in other incidental activities, and it is not clear at what point these activities give rise to the obligation to register.  For example, consider a situation in which a farmer has a grain silo on his farm that he uses to store grain (some or all of which he purchases) to feed cattle on that farm. The farmer does not fall under category (i) in the definition of "farm" because the grain he held was not all grown on his own farm. Then assume that on occasion he sells a small amount of grain out of that silo to his neighbor when the neighbor is running short on feed.  Now, the farmer doesn't qualify for category (ii) of the definition of "farm" because all of the grain he held was not consumed on his own farm.  Is the farmer required to register?  One could create countless scenarios with the same type of questions. 

     In the proposed regulations, FDA offers a potential solution to the particular quandary mentioned above.  A "retail facility" is also exempt from registration.  Such a facility is defined as one that sells food directly to customers.  In the situation above, the farmer is selling his grain directly to the farmer who will use it, and he may be exempt as a "retail facility."  The problem is that FDA cites some legislative history suggesting that the "retail facility" exemption is intended to apply only to food sold for human consumption.  FDA is accepting comments on whether this should also apply to retail facilities selling food for animal consumption.  The outcome of this determination will be very important to farmers and ranchers as well as businesses such as feed stores.

     The questions will not end there, however.  Endeavors such as those grazing feeder cattle will still have to ponder whether or not they must register.  Interestingly, the preamble states that feedlots would be exempt, but this conclusion has to be based on an interpretation of the term "raising," which is not defined in statute or regulation.  Also, feedlots are often engaged in hedging activities that might include selling some of the feed that they mix to other feedlots or individuals in the area.  It is not at all clear when such activities cease to be incidental to farming and give rise to the obligation of registering. 

     There is a strange irony in this situation in that registration "just to be safe" appears to be an easier option than pursuing a dialogue with FDA officials to determine whether or not a specific operation is exempt.  Indeed, the proposed regulations provide no mechanism for an individual or business to inquire as to whether or not they are required to register.  Further, failure to register is considered a prohibited act under the Food, Drug and Cosmetic Act and could be subject to criminal and civil action.  If the regulations are adopted with these ambiguities, many operations that are unaware of the registration requirements or assume they are exempt might find themselves inadvertently in violation of the law.  Furthermore, the requirements ultimately will not end with registration.  Entities that are required to register with FDA will ultimately be required to maintain certain types of records.

Registration Deadlines

     The Bioterrorism Act requires that all covered facilities must register by December 12, 2003 (regardless of whether the FDA regulations are finalized by that date).  FDA states in its proposed regulation that by October 12, 2003, it will publish either a final rule setting forth final registration requirements or a notice providing a registration address.  Registrations mailed to FDA before the publication of that document will not be accepted.

     All facilities in operation before December 12, 2003 will be required to register by that date.  Any facility that begins operations after December 12, 2003 will be required to register before beginning the covered activities.

Registration Process

     The proposed regulations state that FDA is devoting the majority of its resources for registration to building an electronic registration system.  FDA plans to provide an online form that will only be accepted by the electronic registration system if all mandatory fields are completed.  Registration by mail will also be allowed and will be accomplished by requesting a registration form from FDA.  Registration will be considered complete for electronic registration when FDA transmits the facility's electronic registration number.  For registration by mail, registration is complete once data is entered into the registration system.  There will be no registration fee.

     The registration form will require general information about the facility, including names, address, phone numbers, etc.  The registration form will also identify the type of facility and, in the case of human food facilities, will identify the general product categories related to the facility.  The FDA proposed regulations include a draft registration form.  Click here for the form.

Confidentiality

     Businesses required to comply with the registration provisions will naturally be concerned about public access to potentially sensitive information that might be included on the registration forms.  The Bioterrorism Act stipulates that all registration information is exempt from the requirements of the Freedom of Information Act.  FDA has codified this provision in its proposed regulations.

     Overall, the registration process should be relatively painless.  It will require a one-time registration and will only require further action should a facility undergo major changes in operation.  The most important aspect of these regulations is determining whether a given facility is covered and should be registered.  Under the current proposed regulations, that will be a challenging feat in many instances.

Prior Notice of Imported Food

     The second set of proposed regulations published by FDA relate to the Bioterrorism Act's requirement for prior notification of imported food.  This requirement mandates that notice be provided to FDA prior to importation of most food items.  The Act requires that prior notification begin by December 12, 2003.  These provisions will be monumentally important to businesses involved in importing food products because late, inaccurate, or incomplete prior notice will result in products being refused entry into the U.S. 

"Imported Food" Subject to These Regulations

     Prior notice requirements will apply to all food brought across the U.S. border, regardless of whether the food is intended for domestic consumption, with two exceptions.  The scope of these requirements means that they will apply to food merely passing through the U.S.  For example, food from Mexico being shipped to Canada through the U.S. is covered.

     The two categories of imported food not subject to the prior notice requirements are food individual travelers carry in their personal baggage and those foods subject to the exclusive jurisdiction of USDA.  The second category includes foods that, at the time of importation, are under USDA's exclusive jurisdiction under the Federal Meat Inspection Act, Poultry Inspection Act, or Egg Products Inspection Act.

Who Submits Notice

     The proposed regulations require that the purchaser or importer of an article who resides or maintains a place of business in the U.S. is authorized to submit notice. For food passing through the U.S., prior notice must be submitted by the arriving carrier or the in-bond carrier.

Contents of Notice

     For each article of food imported, FDA will require name, address, and other contact information for the individual submitting notice, the manufacturer, grower(s) (if known), shipper, importer, owner, consignee, and/or all carriers.  Prior notification will also require information pertaining to entry type, the Automated Commercial System (ACS) entry number, identity of the article of food, country of origin, and anticipated arrival information.  If any of the required anticipated arrival information changes prior to arrival, the submission must be amended.  FDA has provided a draft prior notice submission form in the proposed regulations. Click here for the form.

Timing and Method of Filing

     The proposed regulations require that notice be submitted to FDA no later than noon of the calendar day prior to the day the article will arrive at a border crossing or port of entry.  Notice cannot be submitted more than five days before arrival of the goods.  Additionally, prior notice cannot be filed until all required information is available. All filings, amendments, and updates must be submitted electronically through FDA's Prior Notice System.

     Although significantly fewer entities would be affected by the prior notice requirements than by the registration provisions, the average costs of prior notice to industry are significantly higher.  The registration provisions require only a one-time submission to FDA and should represent only a small burden to an individual business on the occasion of registering and any occasion that requires updating the registration.  Prior notice, on the other hand, will be an ongoing process that adds a new layer of requirements for those importing food products. 

     The Bioterrorism Act also includes provisions that will require facilities that manufacture, process, pack, distribute, receive, or hold food to establish and maintain records regarding immediate previous sources and immediate subsequent recipients of food. Farms and restaurants will be exempt from these provisions).  The record-maintenance provisions will require considerably more effort and expense then the registration provisions.  Given this fact, issues such as the definition of a "farm" will become even more important in the formulation of these regulations.  The Act requires FDA to issue final regulations on this issue by December 12, 2003.  FDA has requested general comments on these provisions but has not yet published proposed regulations.