issue-1994-01-04•Federal Register final rules — 1994-01-04
Federal Register final rules — 1994-01-04
issue-1994-01-04Federal Register final rules — 1994-01-04Regulation
Published Federal Register documents, not public-inspection drafts. The GPO XML/text rendition is a research aid; the linked complete official PDF retains the printed layout and all graphics. Graphics are retained in that PDF and are not independently reproduced in this text rendition. Publication does not establish that every provision remains legally in force.
FR Doc. 94-55 Navel and Valencia Oranges Grown in Arizona and Designated Parts of California; Change in Reporting Requirements
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 241-243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-55]
Federal Register / Vol. 59, No. 2 / Tuesday, January 4, 1994 /
[[Page Unknown]]
[Federal Register: January 4, 1994]
VOL. 59, NO. 2
Tuesday, January 4, 1994
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 907 and 908
[FV93-907-1FIR]
Navel and Valencia Oranges Grown in Arizona and Designated Parts
of California; Change in Reporting Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting as a
final rule, without change, the provisions of an interim final rule
changing reporting requirements prescribed under the California-Arizona
navel and Valencia orange marketing orders. The marketing orders
regulate the handling of navel and Valencia oranges grown in Arizona
and designated parts of California and are administered locally by the
Navel and Valencia Orange Administrative Committees (committees). This
rule modifies language in the orders' rules and regulations to
discontinue the use of Form 38 (Weekly Report of By-Product Oranges)
and specify that Form 3 (Daily Manifest Report of Oranges Subject to
Allotment) only be utilized for reporting rail car shipments. These
actions reduce the burden of information collection requirements under
the marketing orders.
EFFECTIVE DATE: February 3, 1994.
FOR FURTHER INFORMATION CONTACT: Caroline C. Thorpe, Marketing
Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room
2522-S, P.O. Box 96456, Washington, DC 20090-6456: telephone: (202)
720-5127; or Maureen Pello, California Marketing Field Office,
Marketing Order Administration Branch, F&V, AMS, USDA, 2202 Monterey
Street, suite 102B, Fresno, California, 93721; telephone: (209) 487-
5901.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Order Nos. 907 and 908 (7 CFR parts 907 and 908), as amended,
regulating the handling of navel and Valencia oranges grown in Arizona
and designated parts of California, hereinafter referred to as the
``orders.'' These orders are effective under the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.''
The Department is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. This action is not intended to have retroactive effect.
This rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
action.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 8c(15)(A) of the
Act, any handler subject to an order may file with the Secretary a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and request a modification of the order or to be exempted
therefrom. A handler is afforded the opportunity for a hearing on the
petition. After the hearing the Secretary would rule on the petition.
The Act provides that the district court of the United States in any
district in which the handler is an inhabitant, or has his or her
principal place of business, has jurisdiction in equity to review the
Secretary's ruling on the petition, provided a bill in equity is filed
not later than 20 days after date of the entry of the ruling.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this action on small
entities.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 140 handlers of navel oranges and 125
handlers of Valencia oranges who are subject to regulation under the
respective marketing order and approximately 3,750 producers of navel
oranges and 3,700 producers of Valencia oranges in the regulated areas.
In addition, there are about 35 by-product manufacturers that will be
affected by this rule. Small agricultural service firms, which includes
handlers and by-product manufacturers, have been defined by the Small
Business Administration (13 CFR 121.601) as those having annual
receipts of less than $3,500,000, and small agricultural producers are
defined as those whose annual receipts are less than $500,000. The
majority of handlers, producers, and processors of California-Arizona
navel and Valencia oranges may be classified as small entities.
This action finalizes changes in the reporting requirements
prescribed under the California-Arizona orange marketing orders. This
rule modifies language in the orders' rules and regulations to
discontinue the use of Form 38 (Weekly Report of By-Product Oranges)
and specify that Form 3 (Daily Manifest Report of Oranges Subject to
Allotment) only be utilized for reporting rail car shipments. These
changes were unanimously recommended by the committees.
The interim final rule was issued on October 8, 1993, and published
in the Federal Register (58 FR 53112, October 14, 1993), with an
effective date of October 14, 1993. That rule amended Secs. 907.131,
907.141, 908.131, and 908.141 of the rules and regulations in effect
under the orders. That rule provided a 30-day comment period which
ended November 15, 1993. No comments were received.
Sections 907.67 and 908.67 of the navel and Valencia orange
marketing orders provide authority for the exemption from order
regulation the handling of oranges to commercial processors for
processing into products, including juice. Sections 907.131 and 908.131
of the orders' rules and regulations prescribe procedures governing the
exemption from order regulation of such by-product oranges. Included in
these procedures are certain reporting requirements imposed on handlers
and by-product manufacturers to help ensure that order requirements and
regulations governing the exemption for by-product oranges are being
followed.
For example, persons who wish to acquire oranges as an approved by-
products manufacturer for commercial processing into by-products exempt
from regulation must submit an application to the committee on Form 14
(Application to be Placed on Approved List of Orange By-Product
Manufacturers). These applications are referred to the committees'
compliance department for investigation and then, if appropriate,
referred to the committees for approval to be placed on an approved
list of by-product manufacturers. Commercial processors are also
required to submit to the committees copies of Form 15 (Orange
Diversion Report) which specify how the oranges were disposed. Finally,
approved by-product manufacturers were required to submit Form 38
(Weekly Report of By-Product Oranges) during the crop year when
processing is occurring.
The committees have recommended that submission of Form 38 no
longer be required under the marketing orders. Submission of Form 38
was added to the orders' rules and regulations in 1990 because the
committees believed that the additional information would help to
ensure that oranges exempted under the by-products exemption did not
enter the fresh fruit market. It was believed that comparisons of the
total amount of oranges received by processors with the total amount of
by-products manufactured would give the committees a method to verify
that all oranges received were manufactured into by-products.
However, the committees have found that the information collected
on Form 38 is not necessary to ensure compliance with order
requirements. In addition, much of the information on Form 38 is
collected on other reports required to be submitted under the orders.
The committees believe that submission of Form 38 creates an additional
burden on by-product manufacturers that is not necessary. Thus, the
committees recommended revising the orders' rules and regulations to
discontinue the use of Form 38. The Department has also made some minor
modifications to Sec. 907.131 and 908.131 for the purpose of clarity.
The second change that the committees recommended concerns Form 3
(Daily Manifest Report of Oranges Subject to Allotment). Sections
907.71 and 908.71 of the orange marketing orders provide that handlers
furnish to the committees information regarding cartons of oranges
handled, segregated by size, within 24 hours of shipment. Handlers must
also indicate whether the shipments were destined to points in the U.S.
and Alaska or Canada.
Sections 907.141 and 908.141 of the orders' rules and regulations
require handlers to submit, on Form 3, a manifest report of oranges
shipped within a 24 hour period. Prior to the effective date of the
interim final rule, handlers were required to include both truck and
rail car shipments on Form 3. However, identical information regarding
truck shipments is submitted by handlers on Form 8 (Certificate of
Assignment of Allotment). According to the committees, this duplication
of information created an added burden for handlers and was not
necessary. Thus, the committees recommended modifying the orders' rules
and regulations to require that handlers only report rail car shipments
on Form 3. Handlers are still required to submit rail manifests and
other appropriate documentation to the committees to substantiate rail
car shipments.
The information collection requirements contained in the referenced
sections have been previously approved by the Office of Management and
Budget (OMB) under the provisions of 44 U.S.C. chapter 35 and have been
assigned OMB numbers 0581-0116 for navel oranges and 0581-0121 for
Valencia oranges.
This rule reduces the reporting burden on approximately 25
processors of navel and Valencia oranges who had been completing Form
38, taking about 0.33 hour to complete each report. This rule also
reduces the reporting burden on approximately 210 handlers who ship
primarily by truck, taking about 0.40 hour to complete each report.
About 80 handlers who ship by rail at some point during a season will
continue to use Form 3, taking approximately 0.20 hour to complete the
report.
Based on these considerations, the Administrator of the AMS has
determined that this action will not have a significant economic impact
on a substantial number of small entities.
After consideration of all relevant material presented, the
information and recommendations submitted by the committees, and other
information, it is found that finalizing the interim final rule,
without change, as published in the Federal Register (58 FR 53112,
October 14, 1993) will tend to effectuate the declared policy of the
Act.
List of Subjects in 7 CFR Parts 907 and 908
Marketing agreements, Oranges, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR parts 907 and 908
are amended as follows:
1. The authority citation for both 7 CFR parts 907 and 908
continues to read as follows:
Authority: 7 U.S.C. 601-674.
PART 907--NAVEL ORANGES GROWN IN ARIZONA AND DESIGNATED PART OF
CALIFORNIA
2. Accordingly, the interim final rule amending 7 CFR part 907,
which was published at 58 FR 53112 on October 14, 1993, is adopted as a
final rule without change.
PART 908--VALENCIA ORANGES GROWN IN ARIZONA AND DESIGNATED PART OF
CALIFORNIA
3. Accordingly, the interim final rule amending 7 CFR part 908,
which was published at 58 FR 53112 on October 14, 1993, is adopted as a
final rule without change.
Dated: December 27, 1993.
Robert C. Keeney,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-55 Filed 1-3-94; 8:45 am]
BILLING CODE 3410-02-P
Complete official Federal Register PDF
FR Doc. 94-32 Inquiry Into Alleged Anticompetitive Practices Related to Marketing Affiliates of Interstate Pipelines and Ozark Gas Transmission System; Order on Rehearing and Extending Sunset Date
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 243-256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Parts 161 and 250
[Docket Nos. RM87-5-012 and CP87-238-003; Order No. 497-E]
Inquiry Into Alleged Anticompetitive Practices Related to
Marketing Affiliates of Interstate Pipelines and Ozark Gas Transmission
System; Order on Rehearing and Extending Sunset Date
Issued December 23, 1993.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule; order on rehearing and extending sunset date.
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SUMMARY: This order rules on requests for rehearing of the Commission's
order on remand issued following the decision of the U.S. Court of
Appeals for the D.C. Circuit which upheld in substantial part the
Commission's final rule governing the relationship between interstate
natural gas pipelines and their marketing or brokering affiliates. The
order on remand, among other things, narrowed the scope of the
contemporaneous disclosure requirement by pipelines with respect to
sales and marketing information and extended the sunset date of the
final rule's reporting requirements. The order on rehearing, among
other things, deletes the remaining categories of gas sales and
marketing information from the contemporaneous disclosure requirement
and further extends the sunset date.
EFFECTIVE DATE: This final rule is effective January 1, 1994.
FOR FURTHER INFORMATION CONTACT: David Faerberg, Office of the General
Counsel, Federal Energy Regulatory Commission, 825 North Capitol
Street, NE., Washington, DC 20426, (202) 208-1275.
SUPPLEMENTARY INFORMATION: In addition to publishing the full text of
this document in the Federal Register, the Commission also provides all
interested persons an opportunity to inspect or copy the contents of
this document during normal business hours in room 3104, 941 North
Capitol Street, NE., Washington, DC 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user and may be accessed using a personal computer with a modem by
dialing (202) 208-1397. To access CIPS, set your communications
software to use 300, 1200, or 2400 bps, full duplex, no parity, 8 data
bits and 1 stop bit. CIPS can also be accessed at 9600 bps by dialing
(202) 208-1781. The full text of this rule will be available on CIPS
for 30 days from the date of issuance. The complete text on diskette in
WordPerfect format may also be purchased from the Commission's copy
contractor, La Dorn Systems Corporation, also located in room 3104, 941
North Capitol Street, NE., Washington, DC 20426.
I. Introduction
On December 4, 1992, the Commission issued Order No. 497-D1 in
response to the opinion issued by the United States Court of Appeals
for the District of Columbia Circuit in Tenneco Gas v. Federal Energy
Regulatory Commission (Tenneco)2 which upheld in substantial part
Order Nos. 497 and 497-A,3 the Commission's final rule governing
the relationship between interstate natural gas pipelines and their
marketing or brokering affiliates. However, the court found that the
Commission did not adequately justify its extension of the
contemporaneous disclosure requirement of Sec. 161.3(f)4 of the
Commission's regulations to gas sales and marketing information.
Further, in its review of Ozark Gas Transmission System (Ozark),5
a consolidated case, the court found that, based upon the evidence in
the record, the Commission erred in finding Order No. 497 applicable to
Ozark Gas Transmission System (Ozark), a joint venture. Accordingly,
the court remanded the proceeding to the Commission. In response to the
court's remand, the Commission issued Order No. 497-D which revised
Sec. 161.3(f) to narrow the scope of the contemporaneous disclosure
requirement with respect to sales and marketing information, and found
that Ozark is subject to the requirements of Order No. 497. In
addition, Order No. 497-D extended the sunset date of Order No. 497's
reporting requirements from December 31, 1992, until December 31, 1993.
However, the order stated that 90 days after the Commission has
determined that an individual pipeline is in full compliance with Order
No. 636,6 the pipeline would not be required to submit the
affiliated transportation log (FERC Form No. 592) to the Commission.
The order stated that the pipeline must continue to maintain and
provide its affiliated transportation log information on its electronic
bulletin board (EBB).
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\1\57 FR 58978 (December 14, 1992), III FERC Stats. & Regs.
30,958 (1992).
\2\969 F.2d 1187 (D.C. Cir. 1992).
\3\Inquiry Into Alleged Anticompetitive Practices Related to
Marketing Affiliates of Interstate Pipelines, Order No. 497, 53 FR
22139 (June 14, 1988), FERC Stats. & Regs. [Regulations Preambles
1986-1990] 30,820 (1988), order on rehearing, Order No. 497-A, 54
FR 52781 (December 22, 1989), FERC Stats. & Regs. [Regulations
Preambles 1986-1990] 30,868 (1989), order extending sunset date,
Order No. 497-B, 55 FR 53291 (December 28, 1990), FERC Stats. &
Regs. [Regulations Preambles 1986-1990] 30,908 (1990), order
extending sunset date and amending final rule, Order No. 497-C, 57
FR 9 (January 2, 1992), III FERC Stats. & Regs 30,934 (1991),
reh'g denied, 57 FR 5815, 58 FERC 61,139 (1992), aff'd in part and
remanded in part, Tenneco Gas v. Federal Energy Regulatory
Commission, 969 F.2d 1187 (D.C. Cir. 1992).
\4\18 CFR 161.3(f).
\5\49 FERC 61,247 (1989).
\6\Pipeline Service Obligations and Revisions to Regulations
Governing Self-Implementing Transportation; and Regulation of
Natural Gas Pipelines After Partial Wellhead Decontrol, 57 FR 13267
(April 16, 1992), III FERC Stats. & Regs. Preambles 30,939 (April
8, 1992), order on reh'g, Order No. 636-A, 57 FR 36128 (August 12,
1992), III FERC Stats. & Regs. Preambles 30,950 (August 3, 1992);
order on reh'g, Order No. 636-B, 57 FR 57911 (December 8, 1992), 61
FERC 61,272 (1992), reh'g denied, 62 FERC 61,007 (January 8,
1993).
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This order (1) deletes the remaining categories of gas sales and
marketing information from the contemporaneous disclosure requirement,
(2) affirms the Commission's decision to eliminate the filing of Form
592, (3) affirms the Commission's decision that Ozark is subject to
Order No. 497, (4) rejects Hadson Gas Systems, Inc.'s (Hadson) argument
that the Commission's procedures for acting on Secs. 161.3(j) and
284.286(e) filings prohibit public participation, (5) requires all
future standards of conduct filings made under section 161.3(j) and all
requests for waiver of the standards to include form notices, suitable
for publishing in the Federal Register, (6) clarifies what type of
employee is an ``operating employee'' for purposes of the Order No. 497
regulations, and (7) extends the sunset date of Order No. 497's
reporting requirements until June 30, 1994, because concurrently with
this order the Commission is issuing a notice of proposed rulemaking
(NOPR) in Docket No. RM94-6-000 which proposes to revise Order No.
497's reporting requirements.
II. Public Reporting Burden
The public reporting burden under FERC-592, Marketing Affiliates of
Interstate Pipelines, as revised by Order Nos. 497-D and 636, is
expected to remain unchanged. Currently, the reporting burden is
estimated to average 9.94 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Annual reporting requirements under FERC-592
are expected to total 7,882 hours, based on an estimated 793 responses
from approximately 61 respondents.
Issued concurrently with this order is a NOPR in Docket No. RM94-6-
000.7 The NOPR proposes to significantly reduce the FERC-592
information reporting requirements and burden. Extending the sunset
date for FERC-592 through June 30, 1994, will give interested parties
and the Commission time to evaluate the NOPR comments and allow the
Commission time to prepare a final rule.
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\7\Standards of Conduct and Reporting Requirements for
Transportation and Affiliate Transactions.
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Interested persons may send comments regarding the burden estimates
or any other aspect of this information collection, including
suggestions for reductions to the reporting burden, to the Federal
Energy Regulatory Commission, 941 North Capitol Street, NE.,
Washington, DC 20426 [Attention: Michael Miller, Information Services
Division, (202) 208-1415, FAX (202) 208-2425]. Comments on these
reporting requirements may also be sent to the Office of Information
and Regulatory Affairs of OMB, Washington, D.C. 20503 [Attention: Desk
Officer for Federal Energy Regulatory Commission (202) 395-6880].
Hard copy and/or electronic formats for any data collection
required by this order may be obtained by contacting: La Dorn Systems
Corporation, room 3308, 941 North Capitol Street, NE., Washington, DC
20426.
III. Background
On July 21, 1992, the United States Court of Appeals for the
District of Columbia Circuit issued its opinion in Tenneco, upholding
in substantial part Order Nos. 497 and 497-A. However, the court found
that the Commission did not adequately justify its extension of the
contemporaneous disclosure requirement of Sec. 161.3(f) to gas sales
and marketing information. The court stated that ``[o]n remand the
Commission should reconsider its justification for applying [the
contemporaneous disclosure requirement of Sec. 161.3(f)] to sales and
marketing information and ensure that the final requirement is
reasonably tailored to meet the Commission's goals of improving the
market and benefitting consumers, as well as preventing undue
discrimination.'' 8 In a related matter, the court stated that
``[a]pplying [the contemporaneous disclosure requirement of
Sec. 161.3(f)] to released-gas information prior to the issuance of
Order No. 497-A might well be fundamentally unfair'' and that the
Commission could avoid ``the expense of litigation over this issue by
announcing that it will not retroactively apply [Sec. 161.3(f)] to
released gas information.''9 Further, in its review of Ozark, the
court found that the Commission erred in finding Order No. 497
applicable to Ozark, a joint venture partnership composed of
subsidiaries of four natural gas pipelines, each of which has a 25
percent ownership and voting interest. The court stated that the
Commission failed to consider relevant evidence regarding the ability
of the owner pipelines with affiliates to control the partnership.
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\8\Tenneco Gas v. Federal Energy Regulatory Commission, 969 F.2d
1187, 1201 (DC Cir. 1992).
\9\Id. at 1202.
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On December 4, 1992, in response to the court's opinion in Tenneco,
the Commission issued Order No. 497-D, an order on remand and extending
sunset date. Based upon the court's opinion, and in light of the
structural changes in the gas industry that were to occur as a result
of Order No. 636, the Commission revised Sec. 161.3(f) to narrow the
scope of the contemporaneous disclosure requirement with respect to
sales and marketing information. Under revised standard (f), pipelines
are still required to contemporaneously disclose information related to
transportation of natural gas. However, with respect to information
related to gas sales or marketing, pipelines are only required to
disclose information relating to sales or marketing on its system or
the system of an affiliated pipeline. There are two categories of gas
sales or marketing information that are not required to be
contemporaneously disclosed: (1) Gas sales or marketing information
that is available from public sources and (2) information related to
gas sales off a pipeline's system, but not involving the system of an
affiliated pipeline. Section 161.3(f) now reads:
To the extent [a pipeline] provides to a marketing affiliate
information related to transportation of natural gas, or information
related to gas sales or gas marketing on its system or the system of
an affiliated pipeline, it must provide that information
contemporaneously to all potential shippers, affiliated and
nonaffiliated, on its system. Pipelines are not required to
contemporaneously disclose: (1) Gas sales or gas marketing
information that is available from public sources and (2)
Information related to gas sales or gas marketing off a pipeline's
system, but not involving the system of an affiliated pipeline.
In a related matter, based upon the court's advice, the Commission
stated that it will not retroactively apply the contemporaneous
disclosure requirement of standard (f) to released gas information,
that is, standard (f)'s application to released gas information would
begin with the issuance of Order No. 497-A.
With respect to the issue of Order No. 497's applicability to
Ozark, the Commission found that despite the fact that there is a
unanimous approval provision in the Ozark partnership agreement, the
two partners that have parent companies with marketing affiliates
shipping on Ozark's line can still exercise ``control'' as defined by
Sec. 161.2 of the Commission's regulations.10 The Commission found
that even with a unanimous approval provision in the partnership
agreement, Ozark Pipeline Company and Tennessee Ozark Gas Company, the
two partners whose parent companies have marketing affiliates, can each
act alone to direct or effect the management or policies of Ozark Gas
Transmission System. The Commission stated that since there is a
unanimous approval requirement, each partner has veto power over any
decision by simply withholding its vote. The Commission stated that
such power could be exercised in a manner that could unduly prefer the
marketing affiliates related to Ozark's partners, for example, by
either or both partners refusing to engage in an action that would
benefit an independent marketer in competition with one of Ozark's
partners' affiliates. The Commission stated that it believed that
control can be exercised in a negative manner, i.e., by withholding
approval of a specific policy or transaction, as well as in an
affirmative manner, i.e., by actually approving a decision that would
unduly prefer a marketing affiliate.
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\1\018 CFR 161.2.
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Finally, the Commission extended the sunset date of Order No. 497's
reporting requirements from December 31, 1992, until December 31, 1993,
because of the important role they will play in the regulatory
structure created by Order No. 636. The Commission stated that although
Order No. 636 does not change the requirements governing the
relationship between pipelines and their marketing affiliates, the
structural changes engendered by full compliance with the rule would
remove the need to continue filing the affiliated transportation log
(FERC Form No. 592) with the Commission. The Commission stated that
Order No. 636's Electronic Bulletin Board (EBB) requirements ensure
certain minimum standards for maintaining and communicating information
about a pipeline's available capacity, current capacity release offers,
and affiliate marketing-related information. The order stated that
unless further case-specific action is taken by the Commission, 90 days
after the Commission has determined that a pipeline is in full
compliance with the requirements of Order No. 636, that pipeline will
not be required to submit Form 592 to the Commission. The order further
stated that the pipeline must continue to maintain and to provide its
affiliated transportation log information on its EBB. Finally, the
order stated, in practice, this means that pipelines remain subject to
the standards of conduct and will continue to maintain the information
mandated by Order Nos. 497 and 636, but will not be required to file
Form 592 with the Commission.
On January 4, 1993, requests for rehearing were filed by the
Indicated Parties (consisting of Conoco, Inc., Anadarko Petroleum
Corp., Chevron U.S.A., Inc., and Texaco Inc.), Hadson Gas Systems, Inc.
(Hadson), National Fuel Gas Supply Corporation (National Fuel), the
Interstate Natural Gas Association of America (INGAA), ANR Pipeline
Company and Colorado Interstate Gas Company (ANR and CIG), the Joint
Parties (consisting of Williams Gas Marketing Company, Consolidated
Natural Gas Company, Midcon Marketing Corp., and Enron Gas Marketing,
Inc.), CNG Transmission Corporation (CNG), Northwest Pipeline
Corporation (Northwest), and Ozark Gas Transmission System (Ozark).
Their requests are discussed below.
IV. Discussion
A. The Revised Contemporaneous Disclosure Requirement
1. Requests for Rehearing
A number of pipelines (National Fuel, INGAA, ANR, CIG, Tenneco,
CNG, and Northwest) and the Joint Parties assert that the Commission
should eliminate from Sec. 161.3(f) the requirement that sales and
marketing information given to a marketing affiliate must be
contemporaneously disclosed to all potential shippers because it is
inconsistent with the court's decision in Tenneco.
The pipelines and the Joint Parties contend that the revised
standard provides a limited exclusion for sales and marketing
information that is available from public sources or is related to off-
system sales or marketing transactions not involving the system of an
affiliated pipeline but there is no explanation in Order No. 497-D as
to how so limited an exclusion can be interpreted as responsive to the
court's remand. The pipelines and Joint Parties argue that the
Commission's assumption that pipelines obtain sales and marketing
information in connection with or when combined with transportation is
not responsive to the court's directive to provide an independent
justification for barring the exchange of sales or marketing
information that is wholly unrelated to transportation information. The
pipelines and the Joint Parties submit that Order No. 497-D evidences
neither the independent justification required by the court, nor a
consideration of the action on remand which was suggested by the court.
The pipelines and the Joint Parties assert that the Commission has not
examined the relevant data and articulated a satisfactory explanation
for its action including a rational connection between the facts found
and the choice made. They argue that the result is an arbitrary and
capricious order which is unsupported by substantial evidence.
The pipelines and the Joint Parties contend that Order No. 497-D is
inconsistent with Order No. 636. They assert that the Commission has
unequivocally found in Order No. 636 that sales services are
competitive and has set in motion a restructuring of the pipeline
industry that is intended to result in competition for sales on an even
basis by producers, pipelines, and marketers. The pipelines and the
Joint Parties submit that Order No. 497-D is at odds with Order No. 636
in its assumption (which is unsupported by record evidence) that
pipelines possess sales and marketing information which flows from the
pipelines' anticompetitive market power. They state that, as the
Commission documented in Order No. 636, most pipeline industry market
power has already been eliminated, and some individual companies have
completed the transition to competitiveness by unbundling. They further
state that to remove the last vestiges of pipeline market power, as the
Commission sees it in Order No. 636, an industry-wide unbundling is to
be in place by the start of the 1993-94 heating season.
The pipelines and the Joint Parties assert that in light of
unbundling under Order No. 636, it is inexplicable how the Commission
could see a need to re-promulgate standard (f) with regard to sales and
marketing information. They state that when Order No. 497 was issued,
prior to unbundling, the Commission's intent was to prevent
preferential treatment of an affiliated marketer by an interstate
pipeline in the provision of transportation services. The pipelines and
the Joint Parties state that, as recognized by the Commission,
pipelines have no monopoly power over sales. They assert that it is
only a pipeline's transportation function which even arguably puts it
in a position of being able to favor its own marketing affiliates.
Consequently, they argue that the standards of conduct under Order No.
497 should only apply to pipeline transportation information.
The pipelines and the Joint Parties contend that the new
contemporaneous disclosure requirement in Order No. 497-D imposes
unnecessary and unreasonable burdens upon pipelines. They state that,
as Chair Moler noted in her dissent to Order No. 497-D, the standards
of conduct under Order No. 497 already preclude pipelines from
disclosing to marketing affiliates any information obtained from non-
affiliated shippers, or otherwise giving any advantages or preferences
to their marketing affiliates in the provision of transportation
service. The pipelines and the Joint Parties assert that these
requirements effectively prevent pipelines from using any remaining
market power they have over transportation services to benefit their
marketing affiliates, and make the Order No. 497-D disclosure
requirements unnecessary. The pipelines and the Joint Parties do not
believe that in light of all of the current competition in the natural
gas industry, pipelines have significant market power over
transportation service. However, to the extent there is any remaining
market power over transportation service, the pipelines and the Joint
Parties argue that the Order No. 497 standards of conduct adequately
address this issue without a need for the contemporaneous disclosure
requirement for sales and marketing information. They submit that the
Commission's imposition of the Order No. 497-D contemporaneous
disclosure requirement only serves to benefit pipeline competitors, and
imposes unnecessary burdens on pipelines.
The pipelines and the Joint Parties argue that the Commission cites
no evidence to support its critical conclusion that the sales and
marketing information that a pipeline derives from its ongoing
relationship with its customers is a product of either past or present
anticompetitive market power. They assert that the Commission's error
on this point is exacerbated by its lack of jurisdiction to regulate
the disclosure of sales or marketing information at all. The pipelines
and Joint Parties state, as the court noted, because the Commission is
authorized to regulate only those practices that are unduly
discriminatory or preferential, the Commission appears to lack the
authority to prevent pipelines from preferring their affiliates with
exclusive access to sales or marketing information unless that sort of
preference is undue. The pipelines and Joint Parties contend that the
Commission cannot resolve questions about the very existence of its
authority based on nothing more than its sense that the informational
advantages that a gas marketer derives from an affiliated pipeline
result from anticompetitive market power rather than the economic
efficiencies of vertical integration. The pipelines and the Joint
Parties submit that the contemporaneous disclosure requirement also
exceeds the Commission's lawful authority because the Commission is
only empowered to act with respect to any transportation or sale of
natural gas subject to the jurisdiction of the Commission. They state
that the contemporaneous disclosure requirement apparently applies to
the sharing of information regardless of whether a jurisdictional
service is being performed. The pipelines and the Joint Parties assert
that there is plainly no lawful basis for the Commission to extend its
regulation to non-jurisdictional services.
The pipelines and the Joint Parties argue that even assuming that
the pipeline generates certain sales and marketing information that is
not publicly available, mere sharing of this information with an
affiliate does not translate into a transportation advantage for an
affiliate, i.e., even if the pipeline informs an affiliate of a
potential sales market, that does not mean that the pipeline can
automatically provide the affiliate with the transportation capacity
necessary to complete the deal. Indeed, they assert that the affording
of such a preference is precluded under Sec. 161.3(c) which states that
a pipeline may not give its marketing affiliate preference over
nonaffiliated customers in matters relating to part 284 transportation,
including, but not limited to, scheduling, balancing, transportation,
storage, or curtailment priority. The pipelines and the Joint Parties
contend that all the Commission's contemporaneous disclosure
requirement does is to limit the flow of information in the market in a
manner which hinders competition and serves no legitimate purpose.
The pipelines and the Joint Parties assert that with the issuance
of Order No. 636, and the restructuring of all interstate pipelines,
pipelines will no longer retain any transportation capacity. They state
that Order No. 636 prohibits a pipeline from retaining or obtaining
capacity downstream of the point of unbundling on its system except for
storage needed for system management and balancing for no-notice
service, and thus all capacity will be allocated to the pipeline's
shippers. The pipelines and the Joint Parties state that with all of
the pipeline's capacity in the hands of its shippers, the pipeline will
have no control over when the capacity will become available. They
state that availability will depend, to a large degree, on its release
by firm shipper through the pipeline's capacity release program.
Moreover, they state when the capacity does become available (either
through the release program or as interruptible transportation), the
pipeline will have no control over who will get the capacity. They
state that the decision will be solely determined by price paid and
other objective criteria as specified by the releasing shipper and/or
in the pipeline's tariff. The pipelines and the Joint Parties submit
that even if a pipeline knew of a particular gas supply and a demand
for gas in a particular location and proceeded to pass that information
on to its affiliate, no preferential treatment with respect to the
provision of transportation services could result. The pipelines and
the Joint Parties assert that as Order No. 636 has dispelled the
potential for a pipeline to grant an undue preference with respect to
transportation services (the purported reason behind Order No. 497),
the Commission's newly revised contemporaneous disclosure requirement
constitutes nothing more than an arbitrary prohibition against the
normal interactions between affiliates, in a manner which places
pipeline marketing affiliates at an unjustified disadvantage.
Northwest requests that the Commission clarify that it will not
apply standard (f) to any conduct regarding sales or marketing
information prior to the effective date of Order No. 497-D.
Tenneco requests that the Commission clarify that the
contemporaneous disclosure requirement for information regarding on-
system sales and marketing information conveyed by the pipeline to its
marketing affiliate applies only to the transmission of information by
the transportation personnel of the pipeline and not to transmission of
information by the unbundled merchant personnel of the pipeline.
Tenneco believes that such a clarification is reasonable because in the
post-Order No. 636 environment the unbundled merchant will be the
functional equivalent of a marketing affiliate because it will not have
market power over the sale of natural gas. Further, the pipeline
merchant personnel will be required to operate under the exact same
restraints with respect to the pipeline transportation personnel that
marketing affiliate personnel are required to abide by.
2. Commission Ruling
In Tenneco, the court found that ``the contemporaneous disclosure
requirement--at least as it affects information regarding
transportation, where pipelines have monopolistic market power--
reflects a reasonable effort to promote a competitive market without
significantly harming existing efficiencies.''11 However, with
respect to the contemporaneous disclosure of gas sales and marketing
information, the court stated that based on the record it was ``unable
to conclude that standard (f)'s application to sales and marketing is
justified; nor can we be confident that FERC possessed the statutory
authority to regulate the transfer of sales and marketing information
from pipelines to their affiliates.''12 The court remanded the
proceeding to the Commission and stated that ``[o]n remand, the
Commission should consider its justification for applying standard (f)
to sales and marketing information and ensure that the final
requirement is reasonably tailored to meet the Commission's goals of
improving the market and benefitting consumers, as well as preventing
undue discrimination.''13 Upon further review of the issues raised
with respect to the disclosure of certain categories of sales and
marketing information and in light of the court's findings, the
substantive protection of other standards of conduct (particularly
standard(e)),14 structural changes in the industry, and the
restructuring mandated by Order No. 636, the Commission will delete
from the contemporaneous disclosure requirement of standard (f) the
remaining categories of gas sales and marketing information. Pipelines
with marketing affiliates will only be required to contemporaneously
disclose information related to the transportation of natural gas. The
Commission now believes that to impose a general requirement of
contemporaneous disclosure of non-transportation information could have
a chilling effect on pipelines marketing their gas and does not with
any degree of certainty improve the market nor benefit consumers. But
while we are limiting the reach of standard (f), pipelines are not
relieved of their obligations to refrain from unduly discriminatory
conduct that is prohibited under the Natural Gas Act or the Natural Gas
Policy Act, whether or not that conduct is covered by standard (f) or
any of the other standards. Moreover, while the Commission does not
choose to continue a standard requiring contemporaneous disclosure of
certain categories of sales and marketing information at this time,
this does not bar the Commission from examining such questions, if
relevant and necessary, in specific cases.
---------------------------------------------------------------------------
\1\1Tenneco at 1199.
\1\2Id. at 1199.
\1\3Id. at 1201.
\1\4Section 161.3(e) states that a pipeline ``may not disclose
to its affiliate any information the pipeline receives from a
nonaffiliated shipper or potential nonaffiliated shipper.''
---------------------------------------------------------------------------
The court questioned standard (f)'s applicability to information
generated by the pipeline ``from public sources, or other sources
entirely unrelated to a pipeline's transportation service.''15 The
court also questioned the Commission's assertion ``that the sales and
marketing information pipelines use today is a result of their `past
monopoly power over transportation.'''16 Noting that the marketing
of gas depended on current--not past--information, the court found the
Commission's position ``counter-intuitive.''17 The court stated:
---------------------------------------------------------------------------
\1\5Id. at 1200.
\1\6Id.
\1\7Id.
The Commission appears to believe that any advantage a pipeline
gives its marketing affiliate is improper * * * . But advantages a
pipeline gives its affiliate are improper only to the extent that
they flow from the pipeline's anti-competitive market power.18
---------------------------------------------------------------------------
\1\8Id. at 1201.
Examined in this light, the Commission now believes that standard (f)
should be narrowed to affect only the disclosure of information related
to the transportation of gas.
Historically, the pipeline collected and maintained extensive data
on natural gas supply and markets. As the primary--if not exclusive--
buyer and seller of natural gas, pipelines had all of the data on
production, consumption and markets for the areas they served. However,
pipelines today are not the dominant sellers of natural gas they were a
decade ago. About 80 percent of the natural gas pipelines deliver today
is shipper-owned gas. Indeed, after the Order No. 636-mandated
restructuring process is complete, nearly 100 percent of natural gas
deliveries will be shipper-owned gas. Also, other structural changes in
the industry further weaken the pipeline's knowledge base.
Increasingly, contract pricing relies on nationwide competitive and
financial market determinations, such as the NYMEX futures market, and
published spot prices. Also, Order No. 636 establishes a short-term
capacity release program for transactions less than 30 days in duration
where even the EBB bidding requirements are waived. Pipelines will be
afforded substantially less information about these types of
transactions than traditionally required. For these transactions
pipelines know where the gas is entering their system, and where it is
redelivered, but may know nothing about the extent of reserves, the
producers' or consumers' circumstances, or the commercial terms of the
sale itself. Often the pipeline does not even know the identity of the
ultimate consumer. Indeed the theory underlying Order No. 636 is that
shippers would have more access to producers and marketers to make
their decisions.
But just as important is the fact that other shippers and producers
will know where gas is entering and being redelivered throughout the
system. Order No. 636 requires that this type of information be
provided during the restructuring process, and through the EBB posting
requirement required during the right-of-first-refusal, and capacity
release programs.
To the extent that a pipeline collects sales and marketing
information from public sources, or from sources outside its
transportation role, release of this information to its marketing
affiliate generally does not in any way relate to the pipeline's
monopoly power over transportation. Unnecessary interference with
communications between a pipeline and its marketing affiliates would
actually reduce competition, by inhibiting one segment of the industry
from vigorously competing with other natural gas sellers. To do
otherwise would create an unlevel playing field tilted against pipeline
merchant service units or marketing affiliates and towards producers,
nonaffiliated marketers, local distribution companies (LDCs), and
others. Rather than a balanced approach, this tilted playing field
would give an unfair advantage to non-pipeline merchants.
The pipeline obtains sales and marketing information from the
public domain, its bundled merchant function or its transportation
activities. The public domain information should not trigger standard
(f), following the Tenneco court's reasoning. The bundled merchant
information is outdated and does not meet the current information
standard mentioned by the court. And finally, the transportation-
generated sales and marketing information cannot be shared with the
affiliate in the first instance given the standard (e)
prohibition.19
---------------------------------------------------------------------------
\1\9The only sales and marketing information which could result
from a pipeline abusing its monopoly transportation position by
sharing with a marketing affiliate would come from nonaffiliated
shippers or potential shippers. Since standard (e) prohibits the
pipeline from sharing any information derived from those sources
with its marketing affiliate, the act of sharing such sales and
marketing information both violates standard (e) and triggers the
requirement to comply with standard (f).
---------------------------------------------------------------------------
Standards (f) and (e) are compatible with respect to transportation
information--pipelines could generate and communicate transportation
information to their marketing affiliates without violating standard
(e). For example, as a result of its own engineering flow analysis, a
pipeline could develop information concerning capacity availability. If
that information is shared with a marketing affiliate, standard (f) is
triggered. But since the information was not obtained by the pipeline
from a nonaffiliated shipper or potential shipper, standard (e) is not
violated.
In addition to the protections provided by standard (e), standard
(c) also provides an adequate safeguard against affiliate abuse.
Standard (c) states:
[A pipeline] may not, through a tariff provision or otherwise,
give its marketing affiliate preference over nonaffiliated customers
in matters relating to part 284 transportation including, but not
limited to, scheduling, balancing, transportation, storage, or
curtailment priority.20
---------------------------------------------------------------------------
\2\018 CFR 161.3(c).
While these reasons themselves compel modification of standard (f),
further changes in the industry structure, and in pipelines' operations
mandated by Order No. 636 provide additional support. Order No. 636
will both level the playing field for all competitors, and increase the
amount of capacity information available from EBBS to all potential
shippers--marketing affiliates and all other sellers, marketers,
transporters and consumers alike.
First, Order No. 636 requires pipelines to unbundle their own sales
from the transportation service. To do this each pipeline is required
to establish separate operating staffs for pipeline (transportation)
operations and merchant operations (merchant function operating unit).
Each pipeline is also required to treat its merchant function operating
unit as if it were a marketing affiliate, for purposes of compliance
with the standards of conduct and reporting requirements of Order No.
497, et seq. In practice, many pipelines are establishing separate
affiliates to provide the merchant services required by Order No. 636.
This change should further reduce the likelihood that a pipeline would
even have sales or marketing information to pass along to its marketing
affiliate (or merchant function operating unit). Indeed, whatever sales
and marketing information a pipeline would have developed from public
sources would, for the most part, be available to all other competitors
on a similar basis.
In Tenneco the court found
[N]o evidence in the record--and FERC points to none--for the
assertion that the sales and marketing information pipelines use
today is a result of their ``past monopoly over transportation.''
The [FERC's] assertion strikes us as counter-intuitive. The sales
and marketing of gas would seem to depend on current information--a
surmise that is supported by evidence in the record that pipelines'
sales and marketing information includes information developed
through ongoing customer calls and reviews of filings with state and
federal regulatory agencies, trade publications, and market
reports.21
---------------------------------------------------------------------------
\2\1Id. at 1200.
This represents a significant change from past practices. When
pipelines were the primary merchants in the interstate marketplace,
merchant services were provided under long-term contracts on an ``on
demand'' basis. While the pipelines had all of the industry's
information available to them, and operational control over all of the
functions, this information was aggregated over both time (monthly) and
markets. Increasingly, today's merchant services focus on individual
customers and are adjustable on a daily or even hourly basis. The
information needed to drive the old-style merchant services is neither
compatible with nor sufficient to meet the demands of today's
marketplace.
Second, all future sales of gas will take place at pipeline receipt
or pooling points. This requires that the pipeline, acting as a
merchant, and the pipeline's marketing affiliates must sell gas at the
same point on the system as other gas sellers. This places all other
natural gas sellers on a level playing field with marketing affiliates
and the pipeline as a merchant. And because the Commission has mandated
that pipelines allow all shippers flexible receipt, pooling, and
delivery point authority, all shippers should have equal access to
available capacity throughout the system. The designation of pooling
points, the pipeline's point of sale for merchant services, and the
terms and conditions governing flexible point authority are all subject
to negotiations among the pipeline and the parties in individual
restructuring proceedings--not subject to the pipeline's sole
discretion to decide. The result of negotiations over these significant
operating terms and conditions must ultimately be filed by the
pipelines as part of their FERC tariffs and apply equitably to all
shippers whether they purchase from the pipeline or anyone else.
Third, pipelines are encouraged in the Order No. 636 restructuring
process to minimize transition costs by assigning--on a voluntary non-
discriminatory basis--gas supply contracts to their former sales
customers. Pipelines are also allowed 100 percent recovery of
transition costs. These transition provisions are designed to fairly
distribute the burden of the historic legacy of uncompetitive pipeline
purchase arrangements. Coupled with removal of burdensome regulatory
pricing structures, pipeline merchant function operating units should
be left in a position to compete fairly with other merchants without
being saddled with the costs of uncompetitive purchase contracts.
Fourth, Order No. 636 requires pipelines to establish and maintain
EBBs and requires that EBB personnel function independently of the gas
marketing personnel to the maximum extent practicable. Identification
of some of the data to be maintained on the EBB is the subject of
negotiation between the pipeline and the parties to the restructuring
proceedings. However, other data are required by Order No. 636 to be on
the EBB at all times, e.g., length of release, rate, quantity, criteria
for bid evaluation (which criteria was determined during the
restructuring proceeding) and the pipeline must identify all capacity
on its system which is available directly from the pipeline.
Implementation of these EBBs will give all shippers and potential
shippers instant access to the most current information about the
availability of pipeline capacity.
Finally, Order No. 636 creates a capacity releasing program. Under
this program, firm shippers of the pipeline are allowed to resell their
capacity, in whole or in part, and under terms and conditions they
choose, to the highest bidding replacement shipper. Releasing shippers
are also allowed to include specific provisions for the recall of
released capacity, e.g., when temperatures drop below a pre-set minimum
level. Releases may be either permanent or temporary, firm or
interruptible. Coupled with flexible receipt and delivery point
authority, the capacity release program will allow existing firm
shippers to sell their capacity in the pipeline to others. This will
create competition for capacity against the pipeline itself. Although
the pipeline would continue to operate the system, it would no longer
be in sole control over who has access to capacity. Again, the
pipelines and their shippers are expected to work together in
implementing the Order No. 636 restructuring process to decide how the
pipeline will operate in the new unbundled world.
With respect to Northwest's request, the Commission clarifies that
it will not apply standard (f) to any conduct regarding sales or
marketing information prior to the effective date of Order No. 497-D.
Tenneco's request that the Commission clarify that the
contemporaneous disclosure requirement for information regarding on-
system sales and marketing information conveyed by the pipeline to its
marketing affiliate applies only to the transmission of information by
the transportation personnel of the pipeline and not to transmission of
information by the unbundled merchant personnel of the pipeline is
moot. The Commission notes, however, that standard (f), in any form,
applies only to the pipeline in its relationship with its marketing
affiliate, and now, because of Order No. 636, its unbundled merchant
division is the functional equivalent of a marketing affiliate.
B. The Elimination of the Filing of Form 592
1. Requests for Rehearing
The Indicated Parties assert that the Commission erred in
permitting interstate pipelines to cease to submit the affiliated
transportation log (Form 592) 90 days after the Commission has
determined that an individual pipeline is in full compliance with Order
No. 636. The Indicated Parties submit that the information available on
Form 592 may be more essential after a pipeline complies fully with
Order No. 636 than it is now. The Indicated Parties state that
following full compliance with Order No. 636, an interstate pipeline
will be permitted to sell natural gas at negotiated prices. In this
environment, the Indicated Parties argue that such a pipeline may be
motivated to favor its own sales of gas as well as sales made by its
marketing affiliates. For example, the Indicated Parties contend that
to obtain a sale at the expense of other sellers, a pipeline could sell
its gas at a loss or a very low price, but charge the full
transportation rate. The Indicated Parties assert that this would allow
the pipeline to avoid the correlative discount rule under
Sec. 161.3(i), and charge all other sellers the maximum transportation
rate rather than discounting to obtain the transportation business. The
Indicated Parties argue that to remain competitive, non-affiliated
sellers would be forced to reduce their gas prices below what they
would charge if the pipeline discounted its transportation rates rather
than the price at which the pipeline merchant function sells its gas.
The Indicated Parties contend that the non-affiliated sellers would
suffer a loss because they would be forced to sell their gas at a loss
and pay the full transportation rate. The Indicated Parties assert that
the pipeline, however, would not suffer the same economic detriment
because it would receive the full transportation rate on the movement
of its gas. The Indicated Parties submit that they and other competing
merchants will be unable to monitor and detect such favoritism without
the information provided on Form 592.
The Indicated Parties assert that the difficulty with the
elimination of the filing of Form 592 is that the Commission and the
industry have no experience with the operation of EBBs by a pipeline in
full compliance with Order No. 636. The Indicated Parties argue that
the Commission cannot find that the EBBs will prove to be a reliable
and accurate source of the information now supplied on Form 592. The
Indicated Parties state that in light of this practical experience, the
Commission recently requested comments on the configuration and
operation of EBBs in Docket No. RM93-4-000. The Indicated Parties state
that in the list of questions on which comments were requested the
Commission asked whether ``any of this information [available on the
EBBs can] be used to fulfill existing FERC reporting requirements?''
The Indicated Parties contend that this request demonstrates that the
EBBs are an unproven means of communicating the information now
available on Form 592. The Indicated Parties state that even though it
had requested comments on whether it could eliminate any of its current
reporting requirements, the Commission, without even waiting for an
answer to its question, erroneously assumed in Order No. 497-D that the
answer would be ``yes'' and eliminated one of its reporting
requirements. The Indicated Parties submit that the disparity between
the requests for comments and the elimination of a reporting
requirement in Order No. 497-D demonstrates that the Commission acted
in an arbitrary and capricious manner without substantial evidence in
eliminating the filing of Form 592. The Indicated Parties assert that
the Commission has failed to protect the public interest with its
elimination of the requirement that pipelines file Form 592. The
Indicated Parties argue that the Commission should grant rehearing and
reinstate the requirement that pipelines file Form 592.
Hadson also asserts that the Commission erred in eliminating the
filing of Form 592. Hadson states that under Order No. 636 pipelines
will be able to conduct an essentially deregulated gas merchant
business under the pipeline's corporate entity and while sharing key
personnel. Hadson contends that this arrangement, which it does not
oppose in and of itself, nonetheless creates additional opportunities
for the pipeline-transporter to favor both its own merchant division as
well as its affiliates and that this increases rather than diminishes
the need for public scrutiny. Hadson argues that, at a minimum,
deregulating the pipeline-merchant can certainly not be invoked as
grounds for a decrease in the need for public monitoring by the
industry watchdog. Finally, Hadson notes that even requiring the same
information to be disclosed on an EBB is materially different from
requiring the information to be filed with the Commission under the
Natural Gas Act since filings with the Commission are subject to 18
U.S.C. 1001 while postings on an EBB are probably not.
Tenneco asserts that while the Commission recognized in Order No.
497-D that the EBB requirements in Order No. 636 obviate the need for
pipelines to file Form 592 with the Commission, the Commission failed
to recognize that certain information currently required in Form 592
will have little use to anyone in the post-Order No. 636 world.
Tenneco states that Item Nos. 7 and 8 require that a pipeline
report the position of its marketing affiliate in the pipeline's
transportation queue and the total number of requests in the queue
respectively. Tenneco submits that in the unbundled world pipelines
will allocate available capacity among requesting shippers not on a
first-come, first-served basis, but on the basis of the relative value
of the request to the pipeline. Tenneco states that the value of the
requests for transportation will involve a calculation based on the
price offered and the term of the request, and the precise method of
determining which offer has the highest value to the pipeline will be
stated in the pipeline's tariff. Tenneco asserts that without a first-
come, first-served queue in effect, there is no advantage to be gained
by maintaining these two information requirements. Tenneco further
asserts that the pipeline capacity release programs will provide yet
another avenue through which shippers desiring firm transportation
capacity can obtain it, thus further reducing the utility of the
required information. Tenneco contends that these changes brought about
by Order No. 636 will thus eliminate the need for pipelines to report
the queue position of their marketing affiliates and the total number
of requests in the queue.
Tenneco states that Item Nos. 23 and 24 require pipelines to report
whether or not the pipeline will receive take-or-pay credits for
transporting an affiliate's gas and what percentage of the gas
transported will be subject to credit. Tenneco states that because the
Commission's take-or-pay crediting program terminated on December 31,
1990, pipelines have not been able to receive take-or-pay credits since
December 31, 1990. Therefore, Tenneco asserts that maintaining this
requirement serves no purpose.
Tenneco states that Item No. 32 requires pipelines to identify the
location of the producing fields from which gas requested to be
transported for an affiliate originates. Tenneco argues that with the
implementation of flexible receipt and delivery points and capacity
release, this information becomes useless. Tenneco contends that
shippers will be using secondary receipt points on their own contracts
and acquiring each other's capacity much more than they have
historically. Tenneco asserts that this is precisely the outcome that
the Commission is trying to bring about by mandating flexible receipt
and delivery points and capacity release. Tenneco submits that with
this increase in the number of transportation transactions that involve
the use of points other than the primary receipt or delivery point of
the entity requesting transportation, requiring pipelines to report
this information serves no purpose.
Tenneco states that Record No. 3 requires pipelines to report
requested receipt and delivery points for transportation requests of
their marketing affiliates. Tenneco asserts that the advent of flexible
receipt and delivery points renders this information useless. Tenneco
argues that the marketing affiliate, like any other shipper, will have
the firm right to use any receipt or delivery point on the system to
the extent that capacity is available. Thus, Tenneco contends the
utility of maintaining a list of requested receipt and delivery points
is vastly diminished.
Because the information required by Item Nos. 7, 8, 23, 24, and 32
of Schedule 2 and all of Schedule 3 will no longer have value after
full compliance with Order No. 636, Tenneco requests that the
Commission clarify that this information need not be maintained on
pipelines' EBBs. Tenneco asserts that eliminating the requirement to
report it is consistent with the Commission's goal to decrease
needlessly burdensome regulation. Tenneco requests expedited action on
this issue as pipelines are currently setting up their EBBs, and a
swift affirmative response will enable the new EBBs to more accurately
reflect the required information.
2. Commission Ruling
The Commission denies the Indicated Parties' and Hadson's requests
for rehearing. Their arguments lose sight of the fact that the Form 592
information must still be provided electronically, thus allowing
interested parties and the Commission staff to monitor the activities
of pipelines and their affiliates and to initiate the appropriate
action when evidence of discrimination in favor of affiliates exists.
The Indicated Parties' concerns about obtaining reliable and accurate
Form 592 information are unfounded. Section 250.16(g)(2) states that:
An interstate pipeline must provide 24-hour access, by
electronic means, to the data specified in paragraph (b)(2) of this
section. Access to the information must be provided once the service
has begun. A pipeline must, on a daily basis, either update the
information or indicate that no changes have occurred in the log
information.
Most pipelines satisfied this requirement through the use of EBBs
in the past, and Order No. 636 now mandates EBBs. Interested parties
have been receiving and will continue to receive the Form 592
information electronically. Thus, the Indicated Parties' argument that
the Commission and the industry have no experience with EBBs is
inaccurate. Moreover, the requirements of Order No. 636 ensure that
each pipeline's Order No. 497 EBB must provide for: (a) Downloading by
users; (b) daily back-up of information, which must be available for at
least three years; (c) purging information on completed transactions
from current files; (d) display of most recent entries ahead of
information posted earlier; and (e) on-line help, a search function and
a menu that permits users to separately access records in the
transportation log and standards of conduct information.22 These
features allow shippers to take the information that is currently filed
on Form 592s off the pipelines' EBBs and obtain access to the
information up to three years after it is posted.23 In these
circumstances, the burden on the pipelines from filing Form 592s and
the administrative burden on the Commission from collecting them
outweighs any benefits of collecting the data in hard copy.
---------------------------------------------------------------------------
\2\218 CFR 284.8(b)(4) and 284.9(b)(4).
\2\318 CFR 284.8(b)(4) and 284.9(b)(4).
---------------------------------------------------------------------------
The Commission also does not believe that Hadson's argument relying
on 18 U.S.C. 1001 is a valid reason for maintaining the Form 592 filing
requirement. Section 1001 states:
Whoever, in any matter within the jurisdiction of any department
or agency of the United States knowingly and willfully falsifies,
conceals or covers up by any trick, scheme, or device a material
fact, or makes any false, fictitious or fraudulent statements or
representations, or makes or uses any false writing or document
knowing the same to contain false, fictitious or fraudulent
statement or entry, shall be fined not more than $10,000 or
imprisoned not more than five years, or both.
Hadson's argument implies that because a hard copy of the Form 592
information will not be filed with the Commission pipelines will
knowingly provide inaccurate or incorrect information through
electronic means. The Commission believes that the language of the
statute is broad enough to cover electronic postings. However, in order
to prevent any such fraudulent conduct, the Commission deems the
electronic posting of the Form 592 information equivalent to a filing
for purposes of 18 U.S.C. 1001.
Since contemporaneously with this order the Commission is issuing a
Notice of Proposed Rulemaking (NOPR) which proposes to revise Order No.
497's reporting requirements, including Form 592, the Commission will
not address Tenneco's request to delete certain parts of Form 592.
C. Application of Order No. 497 to Ozark
1. Request for Rehearing
Ozark asserts that the Commission's order on remand ignores the
court's instructions requiring the Commission to consider the effect of
Ozark's evidence on the question of control. Ozark contends that it
simply relies upon an equally deficient rationale for concluding,
without reference to any evidence, that Tennessee Ozark and Ozark
Pipeline Corporation each, individually, ``controls'' Ozark, thereby
making the marketing affiliates of those partners marketing affiliates
of Ozark. Ozark submits that to avoid problems inherent in finding that
these partners can exercise ``affirmative control'' over Ozark, the
Commission concluded that they can exercise ``negative control'' by
simply withholding their vote and vetoing any transportation
transaction that would compete with their respective marketing
affiliates.
Ozark argues that the ability to withhold a vote or ``veto'' any
particular transaction does not exist as far as open access
transportation arrangements are concerned. Ozark states that open
access pipelines, including Ozark, are required by Secs. 284.8(b) and
284.9(b) to transport natural gas on an open and non-discriminatory
basis. Ozark asserts that it is clearly prohibited from taking actions
that would unduly prefer the marketing affiliates of Ozark's partners
and Ozark's partners have an obligation to the partnership to operate
the pipeline within legal parameters.
Ozark submits that its Commission-approved firm and interruptible
rate schedules establish the criteria which control who receives
transportation service from Ozark. Ozark contends that decisions as to
who will be permitted to ship on Ozark may not be made at the whim of a
particular Ozark partner. Ozark asserts that if the tariff criteria are
met, the request must be granted. Ozark states that, in fact, at a
Management Committee meeting held on June 26, 1991, Ozark's Management
Committee, consisting of representatives of each of the partners, voted
unanimously to approve a resolution authorizing the President of Ozark
or his designee to execute interruptible transportation agreements on
behalf of Ozark. Thus, Ozark contends, each of the partners ceded to
the Operator the authority to enter into interruptible transportation
agreements. Ozark argues that no partnership vote is required and the
Operator is bound by the tariff. Ozark asserts that it should be
obvious that not only are Tennessee Ozark and Ozark Pipeline
Corporation not free to veto transportation transactions but each has
relinquished any right it might otherwise have to vote on such
transactions.
Ozark submits that the record before the Commission shows an
absence of control. Ozark asserts that the record before the Commission
shows a complete absence of any vetoing of any transportation
transaction by any Ozark partner, consistent with the delegation of
authority to enter into such transportation agreements. Ozark argues
that the Operator is required to act in accordance with its fiduciary
responsibilities to the partnership, not inconsistent with those
responsibilities. Ozark contends that the Commission's finding here
that one partner could prefer its marketing affiliate by vetoing
transportation for others is directly contrary to the Commission's
prior findings in this case that ``[t]here are no facts before us in
this proceeding which indicate that Ozark has discriminated in offering
transportation services to any party.''24
---------------------------------------------------------------------------
\2\4Citing, Ozark Gas Transmission System, 43 FERC 61,443 at
62,108 (1988).
---------------------------------------------------------------------------
Ozark submits that previously the Commission assumed that the Ozark
partners would act together to provide preferences to marketing
affiliates of one of the partners or that one of the Ozark partners
would be willing to grant preferences to their Ozark partners in the
hopes of obtaining reciprocal preferences. Ozark states that here the
Commission assumes that one of the partners will simply veto
transactions that would benefit the partnership because the transaction
might compete with a transaction of one of its affiliates. Ozark
asserts that there is no evidence to support any such assumption. Ozark
contends that to make such a finding the Commission would have to
assume that Ozark would violate its tariff, the Commission's
regulations, and Texas partnership law. Ozark argues that the
Commission would also have to assume that its prior finding that there
are no facts showing discrimination in Ozark's offering of
transportation is wrong. Ozark submits that not one of these
assumptions is logical, consistent with any information relating to
Ozark, or supported by evidence in the record. Ozark asserts that all
of the evidence shows that such control does not exist including the
fact that numerous transportation transactions have been conducted by
Ozark for independent marketers which compete with the marketing
affiliates of Ozark partners.
Ozark states that its decisions as to who it will ship for are
subject to review by this Commission and this Commission's complaint
procedures. Ozark contends that if the Commission were to find that
Ozark had engaged in such conduct, enforcement proceedings would
commence and Ozark would either be ordered to provide the service
required or its blanket certificate would be revoked.
Finally, Ozark argues that it does not control any of its
individual partners, is not controlled by any of its individual
partners, and is not under common control with any of its individual
partners. It asserts that nothing in the record before the Commission
suggests the contrary.
Ozark also contends that the Commission erred to the extent that it
relied on the modified definition of ``control.'' Ozark states that in
Order No. 497-A the Commission modified the definition of ``control''
in Sec. 161.2. Ozark states that on January 16, 1990, it sought
rehearing of Order No. 497-A. Ozark states that the Commission issued
an order granting rehearing for purpose of further consideration but
the Commission has never, to the best of Ozark's knowledge, issued an
order on the merits of Ozark's rehearing request. Ozark states that
three years have passed and numerous orders utilizing the definition
have issued, including the order in this proceeding, and it considers
its request for rehearing as having been denied. However, to the extent
that the Commission is applying the revised definition to support the
result here, Ozark seeks rehearing.
Ozark asserts that the Commission's order is not at all clear
whether it is relying upon the modified definition of ``control'' to
support its decision here. If the Commission's decision rests at all on
``whether acting alone or in conjunction with others'' language, Ozark
submits that the Commission's decision is in error. Ozark argues that
the effect of the additional language is to establish ``control'' in a
1% voting interest owner of a corporation. Ozark asserts that the
language creates an irrebuttable presumption of ``control'' by anyone
holding at least a 10% voting interest in a corporation, contrary to
the clear statement in the balance of the regulation that the
presumption of control is rebuttable. Ozark contends these two effects
result from the indisputable fact that any interest holder must act
with the requisite plurality in order for any particular action to be
taken by a corporation or a partnership. Ozark states that in its case
unanimity is required for most actions so all partners must vote in the
affirmative in order for particular action to be taken. Ozark asserts
that the fact that unanimity is required, again, does not constitute
control but, rather, evidences a lack of control. Accordingly, Ozark
submits that the modified definition is inconsistent with the existence
of a rebuttable presumption, is arbitrary and capricious, and lacks any
basis in reasoned decisionmaking.
2. Commission Ruling
The Commission rejects Ozark's request for rehearing. Ozark argues
that the Commission's definition of ``control'' is inconsistent with
the existence of a rebuttable presumption. We disagree. Section 161.2
states that ``control (including the terms `controlling,' `controlled
by,' and `under common control with') includes, but is not limited to,
the possession, directly or indirectly and whether acting alone or in
conjunction with others, of the authority to direct or cause the
direction of the management or policies of a company. A voting interest
of 10 percent or more creates a rebuttable presumption of
control.''25 In Order No. 497-A, the Commission specifically
addressed the issue of joint venture pipelines and stated that
overlapping interests create an incentive to grant an affiliate
preference.26 The Commission applied the definition in section
161.2 to several pipelines that had requested rehearing, including High
Island Offshore System, U-T Offshore System, Trailblazer Pipeline
Company, Sea Robin Pipeline Company, Northern Border Pipeline Company
and Great Lakes Gas Transmission Company.27 In Tenneco, the court
upheld the definition of control and the way in which the Commission
applied it to Northern Border Pipeline Company. In considering Ozark's
petition for review, the court remanded the Commission's application of
the term ``control'' but not the definition of the term. Thus, Ozark's
request for review of the definition of control is a collateral attack
on Order No. 497-A and the Commission rejects it.
---------------------------------------------------------------------------
\2\518 CFR 161.2.
\2\6Order No. 497-A at 31,593.
\2\749 FERC 61,340 (1989).
---------------------------------------------------------------------------
To consider whether there is control here, we will review all the
evidence Ozark has submitted on the issue. On March 10, 1987, Ozark
filed an application under section 7 of the Natural Gas Act for a
certificate of public convenience and necessity. In that application,
Ozark stated that it is a partnership and submitted its partnership
agreement, which shows that Ozark is jointly owned by four
partners,28 that the partnership will be managed by a management
committee, which will consist of equal representatives from each
partner, and will be operated by OPGC. In addition, OPGC selects the
President of Ozark, who also acts as the CEO and the Chairman of the
management committee. On July 5, 1988, Ozark emphasized that its
General Partnership agreement specifies that no action may be taken by
the management committee except by unanimous approval. On January 3,
1993, Ozark presented, for the first time, a partial copy of a
corporate resolution dated June 26, 1991. This states that ``the
President of Ozark or his designee is hereby authorized to execute
interruptible transportation agreements on behalf of Ozark.'' Because
Ozark's partners ceded to the President the authority to enter into
interruptible transportation agreements, no partnership vote is
required. All of Ozark's firm capacity is committed to Tennessee Gas
Pipeline Company and Columbia Gas Transmission Corporation. Therefore,
Ozark claims that its partners cannot ``control'' transportation either
affirmatively or negatively through veto power.
---------------------------------------------------------------------------
\2\8Ozark's owners are:
1. Ozark Gas Pipeline Corporation (OPGC), which is a direct
subsidiary of USX Corporation. Other subsidiaries include, TXO
Production Company, Marathon Oil Company and Delhi Gas Marketing
Corporation. The activities of TXO Production Company, the marketing
affiliate, have been subsumed into Marathon Oil Company. However,
TXO Production Corporation still ships on Ozark, as does Delhi Gas
Marketing Corporation, another marketing affiliate.
2. Tennessee Ozark Gas Pipe Company, which is a wholly-owned
subsidiary of Tennessee Gas Pipeline Company, which is in turn, a
wholly owned subsidiary of Tenneco, Inc. Tennessee's marketing
affiliate is Tenngasco Corporation (Tenngasco), which is a shipper
on Ozark.
3. Columbia Gulf Transmission, which is a wholly-owned
subsidiary of the Columbia Gas System, Inc. Columbia Gas' marketing
affiliate, Columbia Gas Development Corporation ships on Ozark; and
4. Caney River Transmission Company, which is a wholly-owned
subsidiary of ONEOK, Inc.
---------------------------------------------------------------------------
We disagree. The partners still have authority to direct the
management and policies of Ozark and could, at any time, revoke the
authority over interruptible transportation from the President.
Moreover, under the terms of the partnership agreement, OPGC selects
the President of Ozark and operates Ozark. OPGC's marketing affiliates
ship on Ozark. OPGC has the requisite control described in section
161.2 of the Commission's regulations because it operates Ozark and,
through the President it selects, manages the pipeline.
In addition, ``control'' is not limited to authority over firm or
interruptible transportation. Informal actions of the management
committee or the partners could provide the marketing affiliates with
significant advantages, such as non-public transportation information.
For example, if Ozark intends to build a new pipeline under Part 284 of
the Commission's regulations, the partners could convey that
information to their marketing affiliates, and the marketing affiliates
would have an advantage over nonaffiliated marketers in obtaining
customers. Likewise, information with respect to the addition of new
receipt of delivery points could be of significant advantage to the
marketing affiliates.
Ozark also states that it has not discriminated in the past and
that no Ozark partner has vetoed any transportation transactions. Ozark
asserts that its operating structure together with its history should
serve to successfully rebut a presumption of control. But the partners'
ability to control the management and policies of the pipeline is not
linked to whether Ozark has discriminated in the past. In Order No.
497, the Commission found sufficient anticompetitive conduct industry-
wide to substantiate the need for the rule. The court upheld the rule
in Tenneco. The Commission need not produce evidence of discrimination
with respect to each pipeline to justify application of the rule to any
one pipeline.
Finally, Ozark argues that it is subject to the undue
discrimination provisions of section 4 of the NGA and therefore will
not discriminate in favor of its affiliates.29 Despite these
prohibitions, the Commission found the need for additional guidelines
to deter anticompetitive conduct and concluded in Order No. 497 that
s
FR Doc. 94-32 Inquiry Into Alleged Anticompetitive Practices Related to Marketing Affiliates of Interstate Pipelines and Ozark Gas Transmission System; Order on Rehearing and Extending Sunset Date
tandards of conduct and reporting requirements were
appropriate.30 Ozark's argument that it should not be subject to
Order No. 497 because it is subject to other regulations is
inconsistent with the purposes of Order No. 497.
---------------------------------------------------------------------------
\2\9Section 4 of the NGA as well as 18 CFR 284.8(b) and 284.9(b)
generally prohibit a pipeline from granting an undue preference to
any person.
\3\0Notice of Proposed Rulemaking on Inquiry Into Alleged Anti-
Competitive Practices Related to Marketing Affiliates of Pipelines,
52 FR 21578 (June 8, 1987), FERC Stats. & Regs. 32,445 at 33,563-5
(1987).
---------------------------------------------------------------------------
D. Standards of Conduct Filings
1. Request for Rehearing
Hadson asserts that the Commission's procedures for acting on
Secs. 161.3(j) and 284.286(e) filings are illegal. Hadson states that
the Commission treats these filings as non-tariff filings which are
assigned an MG docket prefix. Hadson states that according to
Sec. 161.3(j) the filings are made to enable shippers and the
Commission to determine how the pipeline is complying with the
substantive standards of conduct. Hadson submits that the filings
cannot achieve this purpose, however, since they are withheld from
public notice in the Federal Register and in the Commission's daily
orders. Hadson contends that they are effectively concealed from public
view in the great majority of cases since shippers and other interested
members of the public have no way of knowing when to look to find a new
or revised MG filing.
Hadson states that, moreover, the Commission has ruled that the MG
filings are non-adversarial and that the Commission may therefore rely
upon non-public and off-the-record communications in determining
whether a pipeline is in compliance with the substantive standards or
not.31 Hadson states that the Commission has further ruled that no
one may protest or intervene in the non-public proceedings. Hadson
states that any attempt to assert that a compliance filing is not in
compliance with the law will be redocketed in a new proceeding and
treated as a complaint in which the erstwhile protestant bears the
burden of conducting discovery to prove that a pipeline's compliance
filing is not in compliance with the law, rather than the pipeline
being responsible for showing compliance.\32\
---------------------------------------------------------------------------
\3\1Citing, ANR Pipeline Co., et al., 55 FERC 61,260 at 61,833,
n. 6 (1991), order on reh'g and clarification sub nom., Algonquin
Gas Transmission Co., et al., 58 FERC 61,143 (1992).
\3\2Id.
---------------------------------------------------------------------------
Hadson argues that similar problems taint the filings under section
284.286 since Order No. 636 appears to generally incorporate the
existing procedures and relies upon them to support the effective
deregulation of the unbundled pipeline merchants under the Subpart J
certificates. Hadson states that the basis for this conclusion is that
Order No. 636 appears to maintain the dichotomy between tariff
provisions (which presumably would be made in an MT or successor
docket) and procedures (which filing requirement, the Commission
states, would be similar to that of Sec. 161.3(j)).33 Hadson
asserts that the primary difference between the new and the current
procedures, and the only apparent reason for not incorporating
Sec. 161.3(j) along with the various other sections which were
incorporated by reference, is that the new rules have deleted the
statement that the filing will enable shippers and the Commission to
determine how a pipeline is complying with the standards of conduct.
---------------------------------------------------------------------------
\3\3Citing, Order No. 636, III FERC Stats. & Regs. at 30,442, n.
232.
---------------------------------------------------------------------------
Hadson contends that the deletion of the phrase is apparently not
accidental since it accurately reflects the fact that the new filing
will not enable shippers or any other member of the public to (1) learn
how a given pipeline defines ``operating employee'' or how it
interprets the phrase ``practicable,'' (2) receive notice of any such
filing, (3) have an opportunity to comment thereon, or (4) obtain a
decision based upon public evidence compiled in a public record in
accordance with applicable law.
Hadson states that faced with the Commission's determination to
leave the definitional difficulties to be resolved in the individual
restructuring dockets, it did not seek judicial review of Order No. 636
on these issues and has diligently raised these points in its comments
on various pipelines' proposed Order No. 636 compliance plans.
Hadson asserts that the issue here is whether the Commission may
rely upon what Hadson calls the stealth procedures of section 161.3(j)
for purposes of making its decision in this docket to eliminate the
publicly available monitoring requirement. For the reason set forth
above, Hadson submits that the Commission cannot do so.
2. Commission Ruling
The Commission rejects Hadson's argument that its procedures for
acting on Sec. 161.3(j) and Sec. 284.286(e) filings prohibit public
participation. Hadson misinterprets Sec. 284.286(e). It requires
pipelines to file procedures for complying with standards of conduct as
part of their publicly noticed compliance filings.34 Any
interested person can participate in those proceedings and protest
pipelines' proposals for complying with the standards. All the
pipelines' compliance filings have been publicly available and Hadson,
as well as other interested persons, have had ample opportunity to
comment on those procedures. In fact, Hadson intervened in 91
restructuring proceedings and filed comments with respect to several
pipelines' standards of conduct.35 Contrary to Hadson's claims of
``stealth,'' the Commission's decisions with respect to the standards
of conduct will be reviewed in the context of the restructuring
proceedings.
---------------------------------------------------------------------------
\3\4Order No. 636-A, III FERC Stats. & Regs. Preambles, 30,950
at 30,623-4 (1992).
\3\5See Hadson's comments in Florida Gas Transmission Company in
Docket No. RS92-16-000, et al., Texas Gas Transmission Corp. in
Docket No. RS92-24-000, Natural Gas Pipeline Company of America in
Docket No. RS92-45-000.
---------------------------------------------------------------------------
The public also participated in the proceedings in which the
Commission reviewed the standards of conduct pipelines had filed before
Order No. 636 required restructuring. Although the Commission labeled
these proceedings as ``non-adversarial,''36 and invited the public
to file complaints,37 it also addressed all requests for rehearing
of the May 1991 standards of conduct decisions (these dockets have the
prefix MG).38 Eight parties sought rehearing of the May 1991 MG
orders.39 Of those, IGM asked the Commission to address its
previous protests.40 In the Order on Rehearing, the Commission
individually addressed each of IGM's previous allegations concerning
pipelines' implementation of the standards.41 Hadson had the same
opportunity to file comments and protests in the pipelines' pre-Order
No. 636 standards of conduct (MG) proceedings and did not.
---------------------------------------------------------------------------
\3\6Algonquin Gas Transmission Co., et al., 55 FERC 61,260 at
61,833, n. 6 (1991).
\3\7Algonquin Gas Transmission Co., et al., 55 FERC 61,261 at
61,836 (1991).
\3\8Section 385.713 of the Commission's regulations gives
parties 30 days to request rehearing after the Commission issues a
final order. 18 CFR 385.713 (1993).
\3\9Algonquin Gas Transmission Company, Carnegie Natural Gas
Company, Independent Gas Marketers (IGM), Panhandle Eastern Pipeline
Company, Southwest Gas Storage Company, Trunkline Gas Company, Texas
Eastern Transmission Corporation, and Vesta Energy Company.
\4\058 FERC 61,143 at 61,455 (1992).
\4\1Id., at 61,455-60.
---------------------------------------------------------------------------
Finally, Hadson incorrectly states that the Commission treated the
MG filings as non-public. These filings are public and are available
through the Commission's Records Information and Management System. In
addition, all conversations that occurred between the Commission staff
and pipelines were memorialized in memoranda that were placed in the
Commission's public files.42 The public had an opportunity to
raise issues concerning those conversations during rehearing of the May
1991 orders.
---------------------------------------------------------------------------
\4\2ANR Pipeline Co. et. al., 55 FERC 61,260 at 61,833, n. 6.
---------------------------------------------------------------------------
Therefore, not only are the MG filings public, but contrary to
Hadson's assertions, they have no real relation to our decision to
eliminate the requirement to file Form 592s. The MG dockets concern the
pipelines' general implementation of the standards of conduct. In
contrast, Form 592 is a log of specific transportation transactions. As
stated, we are eliminating the requirements to file Form 592s because
the information contained in them will be available on pipelines'
EBBs.43
---------------------------------------------------------------------------
\4\3See discussion at Section IV.B.
---------------------------------------------------------------------------
However, the Commission does agree that, prospectively, it can
facilitate access to pipelines' standards of conduct filings by
publicly noticing them. As a result, the Commission will require all
future standards of conduct filings made under Sec. 161.3(j) and all
requests for waiver of the standards to include form notices suitable
for publishing in the Federal Register.
E. Interpretation of ``Operating Employee''
In response to questions raised by Hadson and other companies and
in order to assist pipelines in their compliance with the separation of
operating personnel as required by Standard G and the reporting
requirements of Sec. 250.16(b), the Commission will clarify what type
of employee it considers an ``operating employee.''
Standard G, 18 CFR 161.3(g), states that ``[t]o the maximum extent
practicable a [pipeline's] operating employees and the operating
employees of its marketing affiliate must function independently of
each other.'' In addition, under the reporting requirements of
Sec. 250.16(b), ``[a]n interstate pipeline must file * * * (1)[n]ew and
existing tariff provisions containing * * * (i) [a] complete list of
operating personnel and facilities shared by the interstate natural gas
pipeline and the affiliated marketing or brokering company.''
While not mandating organizational separation, Standard G ensures
against affiliate preference and the discriminatory dissemination of
information by requiring a pipeline to provide, to the maximum extent
practicable, for the independent functioning of ``operating personnel''
of the pipeline and its marketing affiliate. The contemporaneous
disclosure mandate of Standard F requires that to the extent a pipeline
provides to a marketing affiliate any information related to
transportation of natural gas, it must provide that information
contemporaneously to all potential shippers, affiliated and
nonaffiliated, on its system. Standard G's requirement that operating
employees are to function independently to the maximum extent
practicable will help ensure that the opportunity to share such
information is minimized. If, for example, a pipeline and its marketing
affiliate could evade the contemporaneous disclosure requirement simply
by using the same person to arrange transportation on the pipeline and
market gas for the affiliate, the rule would be substantially
undermined.
Throughout the rulemaking proceeding, however, the Commission has
held that complete divestment, divorcement, or organizational
separation of pipelines and their marketing affiliates is not necessary
to prevent the abuses at which the marketing affiliates rule is aimed.
The independent functioning requirement does not require a pipeline to
separate all of its employees from those of a marketing affiliate, but
rather only operating employees. This determination is consistent with
the Commission's finding that complete organizational separation is
unnecessary and may even be harmful where divestment chills essential
day-to-day communications between the pipeline and its affiliate.
The Commission stated in Order No. 497-A that the phrase
```operating employees' can include officers, directors and managers as
well as non-management employees.''44 However, without further
clarification of that phrase, pipelines may not be able to identify
properly every ``operating employee,'' especially those shared with
their affiliate. Since different pipelines are faced with different
practical circumstances, a person's status as an ``operating employee''
will, in many situations, depend not on his or her occupation or title,
but on his or her actual function within the company.
---------------------------------------------------------------------------
\4\4Order No. 497-A at 31,598.
---------------------------------------------------------------------------
To provide further guidance, the Commission interprets ``operating
employee'' to mean an individual who has day-to-day duties and
responsibilities for planning, directing, organizing, or carrying out
gas-related operations, including gas transportation, gas sales or gas
marketing activities. Examples of operating employees include any
member of the board of directors, officers, managers, supervisors,
regulatory and technical personnel with duties involving day-to-day gas
purchasing, marketing, sales, transportation, operations, dispatching,
storage, or related activities. Such operating employees may be
expected to receive and use information concerning such functions for
the benefit of the specific entity for which they work directly. Under
normal circumstances, employees, including highly-placed operatives
such as members of the board of directors or officers of the
corporations, who do not have such duties would not be likely to
receive or use transportation-related information subject to Standard
F. To the extent a non-operating person obtains such information and
provides it to the marketing affiliate, the pipeline would be required
to disclose the information contemporaneously pursuant to Standard F.
Employees with no direct operational responsibilities and whose
duties are only supportive in nature need not be considered operating
employees. Examples of non-operating employees include support
personnel not engaged in the day-to-day marketing, sales,
transportation or other gas-related operations of the affiliated
companies, clerical and secretarial staff, general office building
maintenance personnel, and payroll and general accounting staff.
F. Extension of Reporting Requirements
Finally, the Commission will only extend the sunset date of Order
No. 497's reporting requirements from December 31, 1993, until June 30,
1994, because contemporaneously with this order the Commission is
issuing a NOPR in Docket No. RM94-6-000 which, among other things,
substantially revises Order No. 497's reporting requirements. The
Commission believes that extending the sunset provision to June 30,
1994, will allow the Commission enough time to issue a final rule
setting forth the new reporting requirements and will also prevent any
gaps in the reporting requirements which would occur if the Commission
simply let the sunset provision lapse.
V. Information Collection Statement
Office of Management and Budget (OMB) regulations require approval
of certain information collection requirements imposed by agency
rules.45 The subject order does not establish any new information
collection requirements and does not reduce the reporting requirements
under FERC-592, Marketing Affiliates of Interstate Pipelines, as
revised by Commission Order Nos. 497-D and 636 (OMB Control No. 1902-
0157).
---------------------------------------------------------------------------
\4\55 CFR 1320.14.
---------------------------------------------------------------------------
The information required under FERC-592 enables the Commission to
carry out its legislative mandate under the NGA and NGPA and will help
ensure a viable capacity release market under the Commission's Order
No. 636. Specifically, the required information allows the Commission
to review/monitor pipeline transportation, sales, and storage
transactions with its marketing affiliates to deter undue
discrimination and to take appropriate action, where and when
necessary. The information is also used by others to indicate whether
or not there has been discrimination in pipeline/affiliate/nonaffiliate
transactions.
The Commission is notifying OMB that there is no change in the
FERC-592 reporting requirements as a result of the subject order and
requesting that OMB extend its approval of FERC-592 through June 30,
1994. The 180-day extension of FERC-592 is necessary to allow the
Commission adequate time to prepare a final rule based on the related
NOPR, issued concurrently with this order, in Docket No. RM94-6-000
(Standards of Conduct and Reporting Requirements for Transportation and
Affiliate Transactions).
Interested persons may obtain further information by contacting the
Federal Energy Regulatory Commission, 941 North Capitol Street, NE.,
Washington, DC 20426 [Attention: Michael Miller, Information Services
Division, (202) 208-1415]. Comments on the FERC-592 reporting
requirements may also be sent to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20503 [Attention: Desk Officer for Federal Energy Regulatory
Commission].
VI. Effective Date
Section 553(d) of the Administrative Procedure Act (APA)46
generally requires a rule to be effective not less than 30 days after
publication in the Federal Register unless good cause is found to
shorten the time period. The sunset date for the reporting requirements
will expire before the APA's 30 day publication requirement has been
fulfilled thus causing a gap in the reporting requirements. Therefore,
in order to prevent a gap in the rule's reporting requirements, this
final rule is effective January 1, 1994.
---------------------------------------------------------------------------
\4\65 U.S.C. 553(d).
---------------------------------------------------------------------------
List of Subjects
18 CFR Part 161
Natural gas, Reporting and recordkeeping requirements.
18 CFR Part 250
Natural gas, Reporting and recordkeeping requirements.
By the Commission.
Lois D. Cashell,
Secretary.
In consideration of the foregoing, the Commission amends parts 161
and 250, chapter I, title 18 Code of Federal Regulations as set forth
below.
PART 161--STANDARDS OF CONDUCT FOR INTERSTATE PIPELINES WITH
MARKETING AFFILIATES
1. The authority citation for part 161 continues to read as
follows:
Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.
2. In Sec. 161.3, paragraph (f) is revised to read as follows:
Sec. 161.3 Standards of conduct.
* * * * *
(f) To the extent it provides to a marketing affiliate information
related to transportation of natural gas, it must provide that
information contemporaneously to all potential shippers, affiliated and
nonaffiliated, on its system.
* * * * *
PART 250--FORMS
1. The authority citation for part 250 continues to read as
follows:
Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.
2. In Sec. 250.16, paragraphs (a)(3), (c)(1), (c)(2) and (d)(1) are
revised to read as follows:
Sec. 250.16 Format of compliance plan for transportation services and
affiliate transactions.
(a) Who must comply. * * *
(3) Maintain all information required under this section from the
time the information is received until June 30, 1994.
* * * * *
(c) What to maintain. (1) An interstate pipeline must maintain the
information in paragraph (b)(2) of this section for all requests for
transportation services made by nonaffiliated shippers or in which a
nonaffiliated shipper is involved from the time the information is
received until June 30, 1994.
(2) The information required to be maintained by this section will
be available from September 12, 1988, and should be maintained
consistent with the requirements of Sec. 284.8(b)(4)(ii) of the
Commission's regulations.
* * * * *
(d) When to file. (1) The information in paragraph (b)(1) of this
section and entries in the log specified in paragraph (b)(2) of this
section relating to transportation requests for which transportation
has commenced 30 days or more previously, which have been denied, or
which have been pending for more than six months, must be filed
initially with the Commission by September 19, 1988, and thereafter as
required by paragraphs (d)(2) and (d)(4) until the earlier of: 90 days
after the Commission has determined that the pipeline is in full
compliance with the requirements of Order No. 636; or June 30, 1994.
This requirement applies to transportation service that commenced or
transportation requests that were denied after July 14, 1988, or that
were pending for six months or more on July 14, 1988.
* * * * *
[FR Doc. 94-32 Filed 1-3-94; 8:45 a.m.]
BILLING CODE 6717-01-P
Complete official Federal Register PDF
FR Doc. 94-14 Amendments to the Multijurisdictional Disclosure System for Canadian Issuers
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 242-243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14]
[[Page Unknown]]
[Federal Register: January 4, 1994]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 239
[Release No. 33-7040; International Series Release No. 625; File No.
S7-16-93]
RIN 3235-AF83
Amendments to the Multijurisdictional Disclosure System for
Canadian Issuers
AGENCY: Securities and Exchange Commission.
ACTION: Final amendments to Form F-9.
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SUMMARY: The Securities and Exchange Commission (the ``Commission'')
has adopted amendments to Form F-9 under the multijurisdictional
disclosure system (``MJDS'') for Canadian issuers which will recognize
investment grade ratings by securities rating organizations recognized
by Canadian securities regulators for purposes of filings on Forms F-9
and 40-F. These amendments have been adopted in light of the
Commission's experience with the MJDS and should further facilitate
transnational capital formation. They are being made effective in light
of the adoption by Canadian securities regulators of parallel
amendments to the MJDS in Canada for U.S. issuers.
EFFECTIVE DATE: January 4, 1994.
FOR FURTHER INFORMATION CONTACT: Paul M. Dudek, (202) 272-3246, Office
of International Corporate Finance, Division of Corporation Finance,
Securities and Exchange Commission, Washington, DC 20549.
SUPPLEMENTARY INFORMATION:
I. Amendments to Form F-9
On November 3, 1993, the Commission adopted several amendments to
the MJDS.\1\ In the November 3 Release, the Commission stated that the
amendments to Form F-9\2\ relating to recognition of investment grade
ratings by securities rating organizations recognized by Canadian
securities regulators would not become effective until such time as the
Canadian securities regulators had adopted parallel amendments to the
multijurisdictional disclosure system in Canada for U.S. issuers.
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\1\Securities Act Release No. 7025 (November 3, 1993) [58 FR
62028] (the ``November 3 Release'').
\2\17 CFR 239.39.
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The Canadian securities regulators have now adopted such amendments
with an effective date of December 31, 1993. As a result, the
Commission is publishing this release to make effective the amendments
to Form F-9 described above.
II. Regulatory Flexibility Act Certification
Pursuant to Section 605(b) of the Regulatory Flexibility Act [5
U.S.C. 605], at the time the Commission issued its release proposing
the amendments being adopted hereby, the Chairman of the Commission
certified that such amendments will not have a significant impact on a
substantial number of small entities. That certification, including the
reasons therefor, was attached as an Appendix to such release and was
published in the Federal Register.
III. Cost-Benefit Analysis
No specific data were provided in response to the Commission's
request regarding the costs and benefits of the amendments being
adopted today. Some commenters indicated that these amendments would
save Canadian issuers the expense of obtaining a securities rating from
those rating organizations currently specified under Form F-9.
IV. Effective Date
The amendments to Form F-9 shall be effective on the date of
publication in the Federal Register in accordance with the
Administrative Procedure Act, which allows effectiveness in less than
30 days after publication for ``a substantive rule which grants or
recognizes an exemption or relieves a restriction.'' 5 U.S.C.
553(d)(1).
V. Statutory Bases
The amendments to the Commission's rule and form are being proposed
pursuant to sections 6, 7, 8, 10 and 19(a) of the Securities Act of
1933, and Sections 3(b), 4A, 12, 13, 14, 15, 16 and 23 of the
Securities Exchange Act of 1934.
List of Subjects in 17 CFR Part 239
Reporting and recordkeeping requirements, Securities.
Text of Amendments
In accordance with the foregoing, title 17, chapter II of the Code
of Federal Regulations is amended as follows:
PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
1. The authority citation for Part 239 continues to read in part as
follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78l,
78m, 78n, 78o(d), 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m,
79n, 79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-37, unless otherwise
noted.
* * * * *
2. By amending Sec. 239.39 by revising the Instruction following
paragraph (a)(2) to read as follows:
Sec. 239.39 Form F-9, for registration under the Securities Act of
1933 of certain investment grade debt or investment grade preferred
securities of certain Canadian issuers.
(a) * * *
(2) * * *
Instruction
Securities shall be ``investment grade'' if, at the time of
sale, at least one nationally recognized statistical rating
organization (as that term is used in relation to Rule 15c3-
1(c)(2)(vi)(F) under the Securities Exchange Act of 1934 (the
``Exchange Act'') (Sec. 240.15c3-1(c)(2)(vi)(F) of this chapter)) or
at least one Approved Rating Organization (as defined in National
Policy Statement No. 45 of the Canadian Securities Administrators,
as the same may be amended from time to time) has rated the security
in one of its generic rating categories that signifies investment
grade; typically the four highest rating categories (within which
there may be subcategories or gradations indicating relative
standing) signify investment grade.
* * * * *
3. By amending Form F-9 (Sec. 239.39) by revising the Instruction
following paragraph A. of General Instruction I, to read as follows:
Note: Form F-9 does not and these amendments will not appear in
the Code of Federal Regulations.
Form F-9
* * * * *
General Instructions
I. Eligibility Requirements for Use of Form F-9
A. * * *
Instruction Securities shall be ``investment grade'' if, at the
time of sale, at least one nationally recognized statistical rating
organization (as that term is used in relation to Rule 15c3-
1(c)(2)(vi)(F) under the Securities Exchange Act of 1934 (the
``Exchange Act'')) or at least one Approved Rating Organization (as
defined in National Policy Statement No. 45 of the Canadian Securities
Administrators, as the same may be amended from time to time) has rated
the security in one of its generic rating categories that signifies
investment grade; typically the four highest rating categories (within
which there may be subcategories or gradations indicating relative
standing) signify investment grade.
* * * * *
By the Commission.
Dated: December 27, 1993.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-14 Filed 1-3-94; 8:45 am]
BILLING CODE 8010-01-P
Complete official Federal Register PDF
FR Doc. 94-1021 Revision of Trademark Fees
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 236-237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1021]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Part 2
[Docket No. 930508-3327]
RIN 0651-AA61
Revision of Trademark Fees
AGENCY: Patent and Trademark Office, Commerce.
ACTION: Final rule.
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SUMMARY: The Patent and Trademark Office (PTO) is amending the rules of
practice in trademark cases. The PTO is announcing that the fee for
filing a trademark application is $245, in accordance with the
applicable provisions of the Patent and Trademark Office Authorization
Act of 1993. No other fees will be affected by this rulemaking.
EFFECTIVE DATE: December 3, 1993.
FOR FURTHER INFORMATION CONTACT:
Robert Kopson by telephone at (703) 305-8510 or by mail marked to his
attention and addressed to the Commissioner of Patents and Trademarks,
Washington, DC 20231.
SUPPLEMENTARY INFORMATION: This rule change adjusts the fee for filing
a trademark application in accordance with the provisions of Public Law
103-179. The trademark fee increase is required to address long-term
funding needs of the trademark functions of the PTO which cannot be
satisfied with the current fee structure.
Statutory Provisions
Section 31 of the Trademark (Lanham) Act of 1946, as amended (15
U.S.C. 1113), authorizes the Commissioner to establish fees for the
filing and processing of an application for the registration of a
trademark or other mark, and for all other services and materials
furnished by the PTO relating to trademarks and other marks.
Public Law 103-179 established the fee for filing a trademark
application at $245 per class. Public Law 103-179 took effect on
December 3, 1993.
Recovery Level Determinations
The existing fee schedule, along with the adjustment to the
trademark application fee, will recover $518,692,000 in fiscal year
1994, of which $4,830,000 is attributable to the increase in the
trademark application fee. The enacted 1994 budget is $504,021,000. An
additional $14,671,000 of patent statutory fees will be collected in
1994 and will be deposited to the Fee Surcharge Fund.
Patent statutory fees are subject to the provisions of the Omnibus
Budget Reconciliation Act of 1990, as amended by Public Law 102-204. Of
the total amount of income expected to be collected in 1994 under 35
U.S.C. 41 (a) and (b), $103,000,000 must be deposited to the Fee
Surcharge Fund for deficit reduction purposes in lieu of seeking
general taxpayer funds from the U.S. Treasury. The $103,000,000 is
deposited in a special account in the U.S. Treasury, reserved
exclusively for use by the PTO, and is made available to the PTO
through the appropriation process. For 1994, the Congress appropriated
$88,329,000 from the Fee Surcharge Fund.
General Procedures
There will be a grace period of 60 days, beginning December 3,
1993, and ending January 31, 1994. During the grace period, any party
who submits a trademark application, which is otherwise sufficient,
with a fee of at least $210, but less than $245, will be notified of
the fee deficiency and permitted to supplement it within a 30-day
period set by the notice of the insufficient fee. If the applicant
submits the amount by which the fee is deficient within the 30-day
period, the application will retain its original filing date. If the
amount by which the fee is deficient is not submitted within 30 days,
the application papers and fee will be returned to the applicant. Any
trademark application submitted after January 31, 1994 with a deficient
fee payment will be returned to the applicant.
Discussion of Specific Rules
37 CFR 2.6 Trademark fees
Section 2.6, subparagraph (a)(1), is revised to adjust the fee
authorized by the Trademark (Lanham) Act of 1946 in accordance with the
provisions of Public Law 103-179.
Other Considerations
This rule change is in conformity with the requirements of
Executive Order 12612, and the Paperwork Reduction Act of 1980, 44
U.S.C. 3501, et seq. There are no information collection requirements
relating to patent and trademark fee rules.
This regulation was reviewed by the Office of Information and
Regulatory Affairs of the Office of Management and Budget under
Executive Order 12866.
The PTO has determined that this rule change has no Federalism
implications affecting the relationship between the National Government
and the States as outlined in Executive Order 12612.
Notice and opportunity for comment are unnecessary under 5 U.S.C.
553(6)(b) because this rule change merely restates a Congressionally-
mandated fee change. Because notice of proposed rulemaking is not
required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.) does not apply.
The PTO published a notice of proposed rulemaking on July 21, 1993,
(58 FR 39102) to increase the trademark fee to $245 based on pending
legislation that would have given PTO the authority to raise trademark
fees in excess of the Consumer Price Index. The legislation as passed
(Pub. L. 103-179) simply increased the trademark application filing fee
to $245 effective the date of enactment.
List of Subjects in 37 CFR Part 2
Administrative practice and procedure, Courts, Lawyers, Trademarks.
For the reasons set forth in the preamble, the PTO is amending
title 37 of the Code of Federal Regulations, Chapter I, as set forth
below.
PART 2--RULES OF PRACTICE IN TRADEMARK CASES
1. The authority citation for part 2 continues to read as follows:
Authority: 15 U.S.C. 1123; 35 U.S.C. 6, unless otherwise noted.
2. Section 2.6 is amended by revising paragraph (a)(1) to read as
follows:
Sec. 2.6 Trademark fees.
* * * * *
(a) Trademark process fees.
(1) For filing an application, per class: $245.00.
* * * * *
Dated: December 23, 1993.
Bruce A. Lehman,
Assistant Secretary of Commerce and Commissioner of Patents and
Trademarks.
[FR Doc. 94-1021 Filed 1-3-94; 8:45 am]
BILLING CODE 3510-16-M
Complete official Federal Register PDF
FR Doc. 93-32110 Loans for Demand Side Management, Energy Conservation Programs, and On- Grid and Off-Grid Renewable Energy Systems
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 494-498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32110]
[[Page Unknown]]
[Federal Register: January 4, 1994]
_______________________________________________________________________
Part VIII
Department of Agriculture
_______________________________________________________________________
7 CFR Part 1710
Loans for Demand Side Management, Energy Conservation Programs, and On-
Grid and Off-Grid Renewable Energy Systems; Interim Final Rule
DEPARTMENT OF AGRICULTURE
Rural Electrification Administration
7 CFR Part 1710
Loans for Demand Side Management, Energy Conservation Programs,
and On-Grid and Off-Grid Renewable Energy Systems
AGENCY: Rural Electrification Administration, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Rural Electrification Administration (REA) hereby amends
its pre-loan regulations for electric loans to incorporate changes to
electric loan policies required by the Rural Electrification Loan
Restructuring Act of 1993 (RELRA). This action will permit REA to make
loans for demand side management (DSM), energy conservation programs,
and on- and off-grid renewable energy systems.
DATES: This rule is effective January 4, 1994.
Written comments must be received by REA or carry a postmark or
equivalent by May 4, 1994.
ADDRESSES: Written comments should be addressed to F. Lamont Heppe,
Jr., Deputy Director, Program Support Staff, U.S. Department of
Agriculture, Rural Electrification Administration, room 2230-S, 14th
Street and Independence Avenue, SW., Washington, DC 20250-1500. REA
requires a signed original and three copies of all comments (7 CFR
1700.30(e)). Comments will be available for public inspection during
regular business hours (7 CFR 1.27(b)).
FOR FURTHER INFORMATION CONTACT: F. Lamont Heppe, Jr., Deputy Director,
Program Support Staff, U.S. Department of Agriculture, Rural
Electrification Administration, room 2230-S, 14th Street & Independence
Avenue, SW., Washington, DC 20250-1500. Telephone: 202-720-0736. FAX:
202-720-4120.
SUPPLEMENTARY INFORMATION: This regulatory action is issued in
conformance with Executive Order 12866, Regulatory Planning and Review.
The Administrator of REA has determined that the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.) does not apply to this rule. The
Administrator of REA has determined that this rule will not
significantly affect the quality of the human environment as defined by
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
Therefore, this action does not require an environmental impact
statement or assessment. Section 1710.117 requires borrowers to comply
with applicable environmental regulations and will cover the activities
for which assistance is sought under this subpart. This rule is
excluded from the scope of Executive Order 12372, Intergovernmental
Consultation, which may require consultation with State and local
officials. A Notice of Final Rule titled Department Programs and
Activities Excluded from Executive Order 12372 (50 FR 47034) exempts
REA electric loans and loan guarantees from coverage under this Order.
This rule has been reviewed under Executive Order 12778, Civil Justice
Reform. This rule: (1) Will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule; (2) will not have any retroactive effect; (3)
will not require administrative proceedings before any parties may file
suit challenging the provisions of this rule. The program described by
this rule is listed in the Catalog of Federal Domestic Assistance
Programs under number 10.850 Rural Electrification Loans and Loan
Guarantees. This catalog is available on a subscription basis from the
Superintendent of Documents, the United States Government Printing
Office, Washington, DC 20402-9325. The existing recordkeeping and
reporting burdens contained in this rule were approved by the Office of
Management and Budget (OMB) pursuant to the Paperwork Reduction Act of
1980 (44 U.S.C. 3501 et seq.), under control numbers 0572-0017, 0572-
0032 and 0572-0103. Because of the deadline imposed by the law, the
additional recordkeeping and reporting burdens have been submitted to
OMB for approval on an emergency basis. Send questions or comments
regarding these burdens or any other aspect of these collections of
information, including suggestions for reducing the burden, to the
Office of Information and Regulatory Affairs, Office of Management and
Budget, room 3201, NEOB, Washington, DC 20503. Attention: Desk Officer
for USDA.
Background
The Rural Electrification Loan Restructuring Act of 1993, Public
Law 103-129, 107 Stat. 1356, (RELRA), signed into law by President
Clinton on November 1, 1993, amends the Rural Electrification Act of
1936, 7 U.S.C. 901 et seq. (RE Act). The amendments mandate a
restructuring of the electric loan programs of REA. Loan purposes, the
definition of ``rural area'', applicable interest rates and loan terms
and conditions were among the areas affected by RELRA. An interim rule
implementing these provisions of RELRA were published on December 20,
1993 at 58 FR 66260.
The amendments to 7 CFR part 1710, published today implement the
provision for making loans for demand side management, energy
conservation programs, on- and off-grid renewable energy systems. This
provision has a statutory deadline of January 1, 1994.
Demand side management has become increasingly important to
electric utilities as they seek ways to make their existing systems
more efficient and reduce the need for new capacity. REA has supported
demand side management (DSM) activities in the form of direct load
control and energy conservation through loans for control equipment and
principal deferment programs for energy conservation. With the passage
of RELRA, REA is authorized to expand its role and make loans for all
types of demand side management activities.
This authority will be used primarily to finance distribution
borrower needs. REA believes that most DSM activities must be conducted
at the distribution level because DSM impacts the consumer's use of
electricity. Power supply borrowers are eligible for this financing
assistance, but the level of investment required to support their
distribution members in this area is not normally expected to require
loan funds. REA will not make DSM loans or any type of loans directly
to individuals.
To be eligible for a loan for DSM programs, which include energy
conservation programs (except those financed by loan principal
deferments), and for on-grid renewable energy systems, the loan request
must be supported by an REA-approved integrated resource plan (IRP).
REA may also require an IRP, on a case by case basis, for certain large
or unusual loans for off-grid renewable energy systems. DSM programs
must also be supported by DSM plan, which must be consistent with the
borrower's IRP.
As defined by the Energy Policy Act of 1992 (Pub. L. 102-486) (EP
Act), an integrated resource plan is ``a planning and selection process
for new energy resources that evaluates the full range of alternatives,
including new generation capacity, power purchases, energy conservation
and efficiency, cogeneration and district heating and cooling
applications, and renewable energy sources, in order to provide
adequate and reliable service at the lowest system cost. The process
shall take into account necessary features for system operation, such
as diversity, reliability, dispatchability, and other factors of risk
and shall take into account the ability to verify energy savings
achieved through energy conservation and efficiency and the projected
durability of such savings measured over time; and shall treat demand
and supply side resources on a consistent and integrated basis.''
In the regulatory text, the term ``IRP'' is used to refer to the
result of the process rather than the process.
The EP Act also defines the term ``system cost'' to mean ``all
direct and quantifiable net costs for an energy resource over its
available life, including the cost of production, distribution,
transportation, utilization, waste management, and environmental
compliance.''
This subpart establishes policies and requirements for IRPs and DSM
plans. Many of these requirements are new, although existing
Secs. 1710.253 and 1710.254, and existing subparts E and G, set forth
analytical and related requirements for the financing of most
generation facilities that are the same in many respects to the
requirements of an IRP. Given the expansion of REA lending authority in
the relatively new and sometimes uncertain areas of DSM and renewable
energy systems, it is essential that borrowers make their investment
decisions based on an IRP in order to ensure informed and prudent
investment planning.
If a distribution borrower is a member of a power supply borrower,
its requests for DSM loans must be based on and be consistent with the
IRP of the power supply borrower. The IRP of the power supply borrower
will establish which DSM programs, on-grid renewable energy systems,
and traditional utility investments, among several feasible
alternatives, are most cost-beneficial from the standpoint of the power
supply borrower and its members taken as an integrated system. The DSM
programs of the individual distribution members must be coordinated
among all parties to ensure that the DSM programs of one member do not
jeopardize the financial integrity and loan security of any other
member or that of the power supply borrower.
Although DSM must be implemented at the distribution level, a
significant portion of the benefits and costs of DSM are accrued at the
power supply level. These benefits and costs are then transferred to
the distribution borrower through wholesale rates. Consequently, DSM
planning by distribution borrowers must consider the impacts of their
activities on their power supplier and the implications of the power
supplier's wholesale rates.
Because of the relationship between a power supply borrower and its
members and the relationship among the members of a power supply
borrower, it is imperative that the power supply borrower and its
members coordinate IRP activities per Sec. 1710.356(b)(1) of this
interim rule.
If a distribution borrower is not a member of a power supply
borrower, loan requests for DSM programs and on-grid renewable energy
systems must be supported by the borrower's own IRP. The IRP must
address, in particular, any effects its DSM programs will have on the
wholesale power rates charged by its non-REA financed power supplier.
The requirements set forth for DSM plans and IRPs are intended to
provide guidance as these new requirements are implemented. Since these
areas are new in many respects, REA intends to exercise its discretion
to administer the specific requirements and procedures with a prudent
degree of flexibility, especially during the first several months of
implementation. Comments from the public are invited regarding the
policies and requirements set forth herein for DSM plans and IRPs.
This rule includes citations to studies of the Electric Power
Research Institute (EPRI) and the U.S. Department of Energy which are
included as reader aids and do not imply REA adoption or endorsement of
said studies.
This interim regulation will define DSM and renewable energy
systems. It will also emphasize REA commitment to finance
nontraditional (renewables, DSM and energy conservation systems) and
traditional resources on an equal footing. Borrowers requesting loans
under this subpart will be required to submit an IRP and a DSM plan in
most cases.
Loans under this subsection for facilities to be owned and operated
by the borrower will generally be treated like loans for usual electric
facilities. Loans for other purposes will be considered as operational
loans with terms based on the borrower's program cycle.
Until REA has developed experience in making loans for these new
purposes, cumulative loans for DSM and for energy conservation programs
will be limited to an amount not to exceed 20 percent of the borrower's
equity.
List of Subjects in 7 CFR Part 1710
Electric power, Electric utilities, Loan programs--energy, Rural
areas.
For the reasons set out in the preamble, REA amends chapter XVII,
title 7 of the Code of Federal Regulations as follows:
PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO
INSURED AND GUARANTEED ELECTRIC LOANS
1. The authority citation for part 1710 is revised to read as
follows:
Authority: 7 U.S.C. 901-950(b); Pub. L. 99-591, 100 Stat. 3341;
Delegation of Authority by the Secretary of Agriculture, 7 CFR 2.23;
Delegation of Authority by the Under Secretary for Small Community
and Rural Development, 7 CFR 2.72.
2. Section 1710.2(a) is amended by adding new definitions in
alphabetical order to read as follows:
Sec. 1710.2 Definitions and rules of construction.
(a) * * *
Demand side management (DSM) means the deliberate planning and/or
implementation of activities to influence consumer use of electricity
provided by a distribution borrower to produce beneficial modifications
to the system load profile. Beneficial modifications to the system load
profile ordinarily improve load factor or otherwise help in utilizing
electric system resources to best advantage consistent with acceptable
standards of service and lowest system cost. Load profile modifications
are characterized as peak clipping, valley filling, load shifting,
strategic conservation, strategic load growth, and flexible load
profile. (See, for example, publications of the Electric Power Research
Institute (EPRI), 3412 Hillview Avenue, Palo Alto, CA 94304, especially
``Demand-Side Management Glossary'' EPRI TR-101158, Project 1940-25,
Final Report, October 1992.) DSM includes energy conservation programs.
It does not include sources of electrical energy such as renewable
energy systems, fuel cells, or traditionally fueled generation, such as
fossil or nuclear fueled generators.
* * * * *
DSM activities means activities of the type referred to in
Sec. 1710.354(f).
DSM plan means a plan that describes the implementation at the
distribution level of the DSM activities identified in the integrated
resource plan as having positive net benefits. See Sec. 1710.357.
* * * * *
Integrated Resources Plan (IRP) means a plan resulting from the
planning and selection process for new energy resources that evaluates
the benefits and costs of the full range of alternatives, including new
generating capacity, power purchases, DSM programs, system operating
efficiency, and renewable energy systems.
* * * * *
Off-grid renewable energy system means an energy source which is
not electrically attached to the grid. Off-grid systems are operated as
an island and will have no direct impact on a utility system's physical
operations. An off-grid system need not meet electric utility power
quality standards.
On-grid renewable energy system means an energy source electrically
attached to an existing grid. It can be attached on either side of a
consumer's meter. On-grid systems are operated as part of the overall
utility system and have a direct impact on a utility system's
operations. An on-grid system must meet electric utility power quality
and safety standards.
* * * * *
Renewable energy system means a source of energy (kWh) used to meet
borrower electric load that is fueled by any of the following
technologies: Hydropower, geothermal, biomass, municipal waste, solar
thermal, photovoltaic, wind, fuel cells not fueled by fossil fuels.
See, for example, ``Renewable Resources in U.S. Electricity Supply,''
February 1993, Publication number DOE/EIA 0561, published by the
Department of Energy, Energy Information Administration, Forrestal
Building, EI-231, Washington, DC 20585.
* * * * *
Sec. 1710.118 [Removed and Reserved]
3. Section 1710.118 is removed and reserved.
4. Subpart H heading is revised and the text of subpart H is added
to part 1710 to read as follows:
Subpart H--Demand Side Management and Renewable Energy Systems
Sec.
1710.350 Purpose.
1710.351 General policy; renewable energy systems.
1710.352 General policy; energy resource conservation programs.
1710.353 General policy; demand side management.
1710.354 Eligible DSM activities.
1710.355 DSM loan applications.
1710.356 Integrated resource plans.
1710.357 DSM plans.
1710.358 Requirements for a DSM plan.
1710.359 DSM effects.
1710.360 Submittal of alternate documentation.
1710.361 Type and term of loans.
1710.362 Loan approval.
1710.363 Advance and documentation of use of loan funds.
1710.364 Loan limits.
Subpart H--Demand Side Management and Renewable Energy Systems
Sec. 1710.350 Purpose.
This subpart sets forth REA policies and procedures with regard to
loans and loan guarantees to REA borrowers for the purpose of
implementing their demand side management (DSM) plans, energy
conservation programs, and on-grid and off-grid renewable energy
systems. The Administrator reserves the right to determine if loans for
purposes under this subpart will be made to a borrower in default under
its mortgage and loan contract. As is the case with all other REA
loans, loans for purposes under this subpart will not be made to
individuals.
Sec. 1710.351 General policy; renewable energy systems.
(a) Off-grid renewable energy systems will be considered the same
as DSM activities and will qualify for either insured loans or loan
guarantees pursuant to Sec. 1710.102.
(b) On-grid renewable energy systems will be treated as a
generation resource and will be eligible only for loan guarantees
pursuant to Sec. 1710.102. Existing REA policy with respect to
generation resources shall generally apply.
(c) REA loans for renewable energy systems will be made only for
systems utilizing technologies that are proven and commercially
available.
Sec. 1710.352 General policy; energy resource conservation programs.
This subpart does not replace the energy resource conservation
program financed by deferments of loan principal.
Sec. 1710.353 General policy; demand side management.
(a) REA will make loans for the purpose of assisting electric
borrowers to implement REA approved demand side management plans. For
the purposes of this regulation energy conservation programs are
included as a DSM activity.
(b) REA will treat demand-side and supply-side resources on an
equal basis. All requirements applicable to loans for traditional
electric facilities will apply to loans for DSM. In addition the
requirements set forth in this subpart will apply.
(c) DSM will be considered a distribution loan purpose, eligible
for either insured loans or loan guarantees pursuant to Sec. 1710.102.
(d) REA will conduct its own evaluation, as specified in this
subpart, of a borrower's DSM activities before making a determination
on the disposition of a borrower's loan application.
(e) REA loans for DSM activities will be made only for systems
utilizing technologies that are proven and commercially available.
(f) In general, REA will require pilot project testing of DSM
activities new to the borrower.
(g) If the borrower's IRP, DSM plan, project construction and/or
financing, and/or rate recovery is subject to the approval of state
authorities, the borrower must obtain such approvals before REA will
approve a loan for any purpose for which an REA approved DSM plan or
IRP is required under this subpart.
Sec. 1710.354 Eligible DSM activities.
DSM activities that are projected to result in more efficient use
of electric system resources and which are consistent with an REA
approved Integrated Resource Plan (IRP) and DSM plan may be eligible
for financing. Examples of such DSM activities, which are not mutually
exclusive, are as follows:
(a) General information and education;
(b) Purchase and installation of borrower owned or consumer owned
equipment or materials, including:
(1) Heating, ventilation, air conditioning;
(2) Building envelope;
(3) Appliances;
(4) Load control;
(5) Lighting and lighting control;
(6) Thermal storage; and
(7) Efficient motors and drives;
(c) Rebates for DSM equipment and facilities;
(d) Fuel switching for dual fuel applications where one of the
energy sources is electricity; and
(e) Pilot DSM projects.
Sec. 1710.355 DSM loan applications.
(a) Any loan application which includes funds for DSM must include
all loan support documents required for a loan for electric facilities,
and must demonstrate that requirements for need, loan feasibility and
loan security are satisfied. In addition, the application must be
supported by an REA approved IRP, except as provided in
Sec. 1710.356(a)(1), and an REA approved DSM plan.
(b) DSM loans will be made to provide financing for DSM activities
planned to be implemented within a two year period.
Sec. 1710.356 Integrated resource plans.
(a)(1) An REA approved IRP is required for all loans that include
funds for DSM activities, unless the cumulative total of all previous
DSM loans and the loan under consideration for that applicant is less
than 1 percent of the applicant's total utility plant.
(2) An REA approved IRP is required for all loans that include
funds for on-grid renewable energy systems.
(3) An REA approved IRP is required for all loans that include
funds for off-grid renewable energy systems unless the Administrator
determines that an IRP is not needed to determine that the loan is both
feasible and secure pursuant to Secs. 1710.112 and 1710.113,
respectively.
(b)(1) When an IRP is required, a distribution borrower that is a
member of a power supply borrower must use the IRP prepared by the
power supply borrower for its overall system. This IRP must have been
coordinated with all of the member systems and it must have been
approved by the board of directors of the power supply borrower.
Because of the relationship between the power supply borrower and its
members under which the loans incurred by the power supply borrower are
primarily to construct, improve or acquire facilities that benefit all
members directly or indirectly, the security of loans to all parties is
interlinked. Consequently, DSM activities and renewable energy
activities must be coordinated among all parties to insure that the
activities of one member do not jeopardize the financial integrity or
loan security of any other member or that of the power supply borrower.
(2) A distribution system that is not a member of an REA financed
power supply borrower shall prepare its own IRP. An IRP developed by a
distribution borrower that is not a member of a power supply borrower
need only address its own system, but shall include an analysis of the
effects of its DSM activities on its wholesale power costs.
(c) The IRP shall identify supply side and demand side options and
analyze their benefits and costs in order to provide adequate and
reliable electric service to consumers at the lowest cost for the
system as a whole.
(d) The IRP shall include necessary features for system operation,
such as diversity, reliability, dispatchability, and other factors of
risk; and it shall take into account the ability to verify energy and
cost savings achieved through DSM, energy conservation, and renewable
energy systems, and the projected durability of such savings measured
over time.
(e) The following elements also included in a DSM plan, pursuant to
Secs. 1710.357 and 1710.358, shall be included except where REA
determines that they are not necessary:
(1) Load shape objectives;
(2) Wholesale power pricing policy and costs, and their
relationship to the proposed DSM activities;
(3) Ownership and costs of DSM related hardware;
(4) Incentive and marketing costs;
(5) Communication and control costs; and
(6) Monitoring methods and costs.
(f) The IRP shall analyze the DSM effects set forth in
Sec. 1710.359.
Sec. 1710.357 DSM plans.
(a) A DSM plan approved by the borrower's board of directors is
required in support of a loan that includes funds for DSM activities or
for off-grid renewable energy systems. The DSM plan shall address the
borrower's existing and proposed activities for the same period covered
by the Long-Range Financial Forecast submitted in support of the loan
application.
(b)(1) A DSM plan prepared by a member of a power supply borrower
must be consistent with the IRP prepared by the power supply borrower.
(2) A DSM plan prepared by a distribution borrower that is not a
member of an REA financed power supply borrower must be consistent with
the borrower's own IRP.
(c) The level of detail required in the DSM plan is dependent on
several factors, for example:
(1) Size and term of loan;
(2) Financial impact of loan on the borrower;
(3) Probability of realization of the estimated impacts;
(4) Magnitude of the estimated effects; and
(5) Potential effects, if any, on other distribution members of a
power supply borrower.
(d) REA will consider effects of proposed and existing DSM plans on
government loan security, rates, revenue requirements, competitiveness,
other distribution borrowers, power supply borrowers or other industry
recognized tests as applicable.
Sec. 1710.358 Requirements for a DSM plan.
A DSM plan shall include:
(a) A list of the DSM activities to be financed by the loan
including details on implementation such as beginning and completion
dates and estimated draw downs of loan funds;
(b) An analysis of the borrower's existing and proposed DSM
activities, including sources of financing and projections of the
effects of those activities as set forth in Sec. 1710.359;
(c) System specific load research and DSM pilot projects as
required by Sec. 1710.353(f);
(d) A benefit/cost and net present value cash flow analysis of each
DSM activity included in the plan. Benefits and costs must be expressed
in the same units where possible. Short term and long term impacts must
be addressed. Who benefits and who pays must be clearly identified.
Objectives of a DSM plan shall be stated in terms of load profile
adjustments by customer rate class and/or market segment. The benefit/
cost analysis shall include the following steps:
(1) Identification of objectives, alternatives, and effects;
(2) Simulation of impacts on the system and its consumers, and the
probable costs and benefits, including sensitivity/probability and
scenario analysis; and
(3) Selection of DSM activities;
(e) An outline of monitoring and reporting procedures to evaluate
the performance of the implemented DSM plan;
(f) A narrative discussing the following:
(1) Scope of the DSM plan;
(2) Resources used to develop the DSM plan;
(3) Internal and external data collection and analysis;
(4) Analysis method used to screen and evaluate the projected
programs;
(5) Analysis of existing and projected plans; and
(6) Coordination activities with power supplier.
Sec. 1710.359 DSM effects.
The IRP and the DSM plan shall consider and discuss the expected
effects of the borrower's DSM activities. The expected effects to be
considered and discussed includes, but are not limited to, the
following:
(a) Effects on the utility (supply side effects):
(1) Operations;
(2) Maintenance;
(3) Environmental compliance;
(4) Capacity planning, including deferment of capacity and
reliability of capacity;
(5) DSM equipment including purchase, operation and maintenance
considerations;
(6) Transmission and distribution effects;
(7) Administrative costs, including administrative and general
costs, program costs, DSM planning costs, integration of supply and DSM
planning, marketing costs, incentive costs, infrastructure support,
monitoring and evaluation costs, bidding costs; and
(8) Revenues and rates;
(b) Effects on consumers (demand side effects):
(1) Equipment purchases;
(2) Operation costs;
(3) Maintenance costs;
(4) Supply voltage quality;
(5) Availability of service and reliability (outages);
(6) Change in benefits received from appliances and housing;
(7) Convenience (availability of equipment, appliances and
services);
(8) Change in comfort and air quality levels of buildings; and
(9) Rates, billing level and elasticity;
(c) Effects on competitiveness;
(d) Effects on other member distribution systems of the power
supply borrower; and
(e) Effects on power supply borrower.
Sec. 1710.360 Submittal of alternate documentation.
(a) The borrower may have performed analysis and prepared
comparable documentation for other purposes, such as for a state
regulatory commission. This information may be acceptable to REA as an
IRP or a DSM plan if the borrower demonstrates that the alternative
information meets the goals and objectives of this subpart.
(b) The borrower shall advise REA of all material information
provided to other lenders or other governmental authorities relating to
their DSM plans. This information shall be provided to REA as
requested.
Sec. 1710.361 Type and term of loans.
(a) The final maturity of loans for purposes under this subpart
shall be determined by REA based on the expected life of needed capital
improvements, expected cost recovery periods, the expected life of
program benefits, the certainty of these benefits, and matching costs
and benefits.
(b) REA will normally consider final maturities for DSM loans of up
to 5 years. Longer loan terms, not to exceed 10 years, for loans for
these purposes will be considered if the borrower can satisfactorily
demonstrate to the Administrator an acceptable basis for doing so and
can demonstrate that the loan will be feasible and secure pursuant to
Secs. 1710.112 and 1710.113, respectively, for the longer period. As
used in this paragraph, renewable energy resource equipment and
facilities are not considered a DSM purpose. Maturities for such loans
will be limited to the expected useful life of the equipment and
facilities.
Sec. 1710.362 Loan approval.
The amount and scope of loans approved by REA under this subpart
are subject to the discretion of REA. Applications will be evaluated on
the merits of the proposals as outlined in the plans specified in this
subpart. REA approval of a loan for purposes under this subpart and/or
REA approval of IRPs and DSM plans does not relieve a borrower of its
responsibilities under this subpart or constitute a representation or
warranty by REA to the borrower or any person that its IRP or DSM plan
will work as described therein.
Sec. 1710.363 Advance and documentation of use of loan funds.
(a) Loan funds for on-grid renewable energy systems will be
advanced using the same procedure as loans for other electric system
facilities.
(b) Loan funds for DSM activities.
(1) Funds for these purposes shall be advanced and used only for
the specific projects and purposes detailed in the loan application and
supporting documents. Generally funds shall be drawn down on a
reimbursement basis. The borrower shall certify completion of work
according to the DSM plan.
(2) The borrower shall maintain accounting and plant records
sufficient to document the cost and location of DSM activities and to
support loan fund advances and disbursements.
(3) All cost associated with DSM projects related to construction,
operations or maintenance, shall be accumulated using the borrower's
work order procedure. An individual work order or work orders shall be
used to record and control the costs of each DSM project. Daily time
and material reports referenced to the DSM activity shall be kept to
record labor and materials used as the activity(ies) is completed.
(4) All other disbursements for DSM activities must be properly
supported by invoices, contracts, or other forms of evidence required
by REA regulations. All such supporting material shall be available at
the borrower's premises for review by the REA Field Accountant,
borrower's certified public accountant and other authorized parties as
applicable. Costs of DSM activities related to operations and
maintenance should be charged to expense in the month incurred.
Departures from this prescribed accounting must be approved by REA
subject to the provisions of 7 CFR 1767.13.
(c) Requirements on advance of funds for all insured electric loans
are in 7 CFR part 1721, subpart B.
Sec. 1710.364 Loan limits.
Cumulative loans DSM activities at the time of loan approval for,
including energy conservation programs and off-grid renewable energy
systems, shall not exceed the lesser of:
(a) Twenty percent of the borrower's equity at the time of the loan
or any time during amortization of the loan; or
(b) An amount approved for such purposes in a final non-appealable
order by the applicable regulatory body for inclusion in the borrower's
rate base.
Dated: December 29, 1993.
Michael V. Dunn,
Acting Under Secretary, Small Community and Rural Development.
[FR Doc. 93-32110 Filed 12-30-93; 3:19 pm]
BILLING CODE 3410-15-M
Complete official Federal Register PDF
FR Doc. 93-32102 Pacific Coast Groundfish Fishery
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 258-259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32102]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF COMMERCE
50 CFR Part 663
[Docket No. 931244-3344; ID. No. 121493A]
Pacific Coast Groundfish Fishery
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final rule; suspension of effectiveness.
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SUMMARY: On November 16, 1992, NMFS promulgated regulations, effective
January 1, 1993, establishing a license-limitation-limited-entry system
for the Pacific Coast commercial groundfish fishery. The regulations,
among other things, require that an owner of a vessel wishing to
participate in the limited-entry fishery have a Federally issued
limited-entry permit endorsed with an appropriate vessel size
endorsement. In view of a delay in issuing certain other regulations
necessary to fully implement this system, this action suspends until
April 1, 1994, the effectiveness of the vessel size endorsement
requirement, which limits variances in vessel length from the length
specified in a permit. The intent of this action is to allow vessel
owners to participate in the limited-entry fishery who would otherwise
be barred from the fishery by the size endorsement requirement.
EFFECTIVE DATE: Effective December 29, 1993, the effectiveness of 50
CFR 633.33(f)(2) is suspended until April 1, 1994.
FOR FURTHER INFORMATION CONTACT:
William L. Robinson at 206-526-6140.
SUPPLEMENTARY INFORMATION: On November 16, 1992, NMFS promulgated
regulations codified at 50 CFR 663.30-663.43, and effective January 1,
1993, establishing a license-limitation-limited-entry system for the
Pacific Coast commercial groundfish fishery. The regulations, among
other things, require that an owner of a vessel wishing to participate
in the limited-entry fishery, have a Federally issued limited-entry
permit endorsed with an appropriate vessel size endorsement.
In general, each limited-entry permit is endorsed with the overall
length of the vessel with which it initially qualified for a permit.
Under 50 CFR 663.33(f)(2), a limited-entry permit endorsed for gear
other than trawl gear may be registered for use with a vessel up to 5
feet (1.52 m) longer than, the same length as, or any length shorter
than, the size endorsed on the existing permit. A limited-entry permit
endorsed for trawl gear may be registered for use with a vessel between
5 feet (1.52 m) shorter, and 5 feet (1.52 m) longer, than the size
endorsed on the existing permit.
Where the owner would like to use a limited entry permit with a
vessel of a length that exceeds the variance, Sec. 663.33(g) allows the
owner to combine two or more limited-entry permits from smaller
vessels, in order to ``step-up'' to a permit for the larger vessel.
However, before any permits may be combined, Sec. 663.33(g) also
requires the Director, Northwest Region, NMFS (Regional Director), with
the professional advice of marine architects and other qualified
individuals, and after consultation with the Pacific Fishery Management
Council (Council), to develop and implement, through amendment of the
regulations, a standardized measure of harvest capacity for the purpose
of determining the appropriate endorsed lengths for limited-entry
permits created by combining two or more permits with smaller size
endorsements.
While the Regional Director has completed the process of
consultation with the appropriate persons and the Council, and has
developed regulations to implement the required standardized measure of
harvest capacity and associated rules for combining permits, the
regulations have not yet been proposed. However, this proposal will
soon be published in the Federal Register for public comment, and a
final rule is expected to be published and to be effective by April 1,
1994.
In anticipation of issuance by January 1, 1994, of the regulations
governing the combining of permits, some vessel owners have acquired
larger vessels and additional limited-entry permits. NMFS estimates
that by January 1, 1994, 30 or more vessel owners will have limited
entry permits endorsed with the size of a qualifying vessel that has
been replaced by a vessel more than 5 feet (1.52m) longer than the
qualifying vessel. Under Sec. 663.33(f)(2), none of these vessel owners
could participate in the fishery until he/she obtains a single permit
endorsed with the size of the larger vessel.
In order to allow limited-entry permit holders in the situation
just described to participate in the limited-entry fishery until the
date by which the Regional Director is expected to have issued the
necessary final rule, NMFS is suspending, until April 1, 1994, the
effectiveness of 663.33(f)(2)--the provision of the regulations
imposing limitations of endorsed length on the use of limited-entry
permits.
Failure to take this action would result in limited-entry permit
owners who have already obtained, or are in the process of obtaining,
additional limited entry permits for combination into a larger permit
being unable to participate in the limited-entry fishery until the
Regional Director issues the necessary final rule. The limited-entry
program is not intended to prevent permit owners from participating in
a fishery for which they have obtained the appropriate limited-entry
permits.
NMFS does not expect this suspension will result in much, if any,
additional harvest capacity entering the limited-entry fishery during
the time of the suspension. The harvest of all major species taken in
the limited-entry fishery during the first 3 months of the calendar
year is controlled with restrictive trip limits that serve as a
disincentive to any permit holders bringing new, large-capacity fishing
vessels into the fishery.
Classification
This final rule is issued under the Magnuson Fishery Conservation
and Management Act, 16 U.S.C. 1801 et seq. Because this rule must be in
effect at the time limited-entry permits are required for participation
in the limited-entry fishery (January 1, 1994) in order to allow vessel
owners who intend to combine permits to participate in the limited-
entry fishery pending establishment of a system to combine permits, it
is unnecessary and not in the public interest to provide prior public
comment under 5 U.S.C. 553(b)(B). Also, because this rule temporarily
relieves a restriction, it is being made effective immediately without
a 30-day delay in effectiveness under 5 U.S.C. 553(d)(1).
List of Subjects in 50 CFR Part 663
Fisheries, Fishing, Reporting and recordkeeping requirements.
Dated: December 29, 1993.
Nancy Foster,
Deputy Assistant Administrator for Fisheries, National Marine Fisheries
Service.
For the reasons set out in the preamble, the effectiveness of 50
CFR 663.33 (f)(2) is suspended until April 1, 1994.
[FR Doc. 93-32102 Filed 12-29-93; 3:44 pm]
BILLING CODE 3510-22-M
Complete official Federal Register PDF
FR Doc. 93-32097 Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 257-258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32097]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF COMMERCE
50 CFR Part 642
[Docket No. 930791-3191; I.D. UP30]
Coastal Migratory Pelagic Resources of the Gulf of Mexico and
South Atlantic
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Trip limit reduction.
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SUMMARY: NMFS reduces the commercial trip limit in the Florida west
coast zone to 50 king mackerel per day in or from the exclusive
economic zone (EEZ). This trip limit reduction is necessary to protect
the overfished Gulf king mackerel resource.
EFFECTIVE DATES: The 50-fish commercial trip limit is effective 12:01
p.m., local time, December 29, 1993, and remains in effect through June
30, 1994, unless the commercial fishery for king mackerel in the
Florida west coast zone is closed before June 30 by publication of a
notice in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Mark F. Godcharles, 813-893-3161.
SUPPLEMENTARY INFORMATION: The fishery for coastal migratory pelagic
fish (king mackerel, Spanish mackerel, cero, cobia, little tunny,
dolphin, and, in the Gulf of Mexico only, bluefish) is managed under
the Fishery Management Plan for the Coastal Migratory Pelagic Resources
of the Gulf of Mexico and South Atlantic (FMP). The FMP was prepared by
the Gulf of Mexico and South Atlantic Fishery Management Councils
(Councils) and is implemented by regulations at 50 CFR part 642, under
the authority of the Magnuson Fishery Conservation and Management Act.
Catch limits recommended by the Councils and implemented by NMFS
for the Gulf of Mexico migratory group of king mackerel for the current
fishing year (July 1, 1993, through June 30, 1994, 58 FR 58509,
November 2, 1993) set the commercial quota of king mackerel in the
Florida west coast zone at 865,000 pounds (392,361 kg). In accordance
with 50 CFR 642.31(a)(2), from the date that 75 percent of the zone's
commercial quota has been harvested until a closure of the Florida west
coast zone has been effected, king mackerel in or from the EEZ may be
possessed aboard or landed from a permitted vessel in amounts not
exceeding 50 per day. Such 50-fish trip limit remains in effect through
June 30, 1994, the end of the fishing year, unless 100 percent of the
commercial quota is reached before June 30, in which case the
commercial fishery for king mackerel in the Florida west coast zone is
closed by publication of a notice in the Federal Register.
NMFS has determined that 75 percent of the commercial quota for
Gulf group king mackerel from the Florida west coast zone was reached
on December 28, 1993. Accordingly, a 50-fish trip limit applies to king
mackerel in or from the EEZ in the Florida west coast zone effective
12:01 p.m., local time, December 29, 1993.
The Florida west coast zone extends from the Alabama/Florida
boundary (87 deg.31'06''W. longitude) to: (1) the Dade/Monroe County,
Florida boundary (25 deg.20.4'N. latitude) from November 1 through
March 31; and (2) the Monroe/Collier County, Florida boundary
(25 deg.48'N. latitude) from April 1 through October 31.
Classification
This action is required by 50 CFR 642.31(a)(2) and (b).
Authority: 16 U.S.C. 1801 et seq.
List of Subjects in 50 CFR Part 642
Fisheries, Fishing, Reporting and recordkeeping requirements.
Dated: December 29, 1993.
David S. Crestin,
Acting Director, Office of Fisheries Conservation and Management,
National Marine Fisheries Service.
[FR Doc. 93-32097 Filed 12-29-93; 3:44 pm]
BILLING CODE 3510-22-M
Complete official Federal Register PDF
FR Doc. 93-32091 Summer Flounder Fishery
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Page 257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32091]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 625
[Docket No. 921230-3020; I.D 122793C]
Summer Flounder Fishery
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Notification of commercial quota transfer and commercial quota
availability.
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SUMMARY: NMFS issues this notification to announce that 10,000 pounds
(4,536 kg) of summer flounder commercial quota available to the State
of North Carolina has been transferred to the State of Rhode Island.
This transfer adjusts the commercial quota for the State of North
Carolina to 3,121,750 pounds (1,416,016 kg) and adjusts the Rhode
Island quota to 1,946,851 pounds (883,086 kg). As a result of this
transfer, NMFS announces that vessels issued a Federal fisheries permit
for the summer flounder fishery may resume landing summer flounder in
the State of Rhode Island until further notice.
EFFECTIVE DATES: December 28, 1993 through December 31, 1993.
FOR FURTHER INFORMATION CONTACT:
Hannah Goodale, Fishery Policy Analyst, 508-281-9101.
SUPPLEMENTARY INFORMATION: Regulations implementing the Fishery
Management Plan for the Summer Flounder Fishery (FMP) are found at 50
CFR part 625 (December 4, 1992, 57 FR 57358). The regulations require
an annual specification of a commercial quota that is apportioned among
the coastal states from North Carolina through Maine. The process to
set the annual commercial quota and the percent allocated to each state
are described in Sec. 625.20.
The commercial quota for summer flounder for the 1993 calendar year
is set equal to 12.35 million pounds (5.6 million kg) (January 22,
1993, 58 FR 5658). The percent allocated to each state was adjusted by
Amendment 4 to the FMP (September 24, 1993, 58 FR 49937) with 15.68298
percent or 1,936,851 pounds (878,550 kg) allocated to Rhode Island, and
27.44584 percent, or 3,389,565 pounds (1,537,497 kg) allocated to North
Carolina.
An emergency interim rule published August 26, 1993, (58 FR 45075),
and extended on November 29, 1993 (58 FR 62556), allows two or more
states, under mutual agreement and with the concurrence of the
Director, Northeast Region, NMFS, (Regional Director), to transfer or
combine summer flounder commercial quota. The Regional Director is
required to consider the criteria set forth in Sec. 625.20 in the
evaluation of requests for quota transfers or combinations.
The 1993 coastwide commercial quota apportioned to North Carolina
effective on January 1, 1993 (58 FR 5658; January 22, 1993), in the
amount of 3,435,214 pounds (1.56 million kg) was revised by Amendment 4
to the FMP effective October 25, 1993 (58 FR 49937), reducing the
amount by 45,649 pounds (20,706 kg) totalling 3,389,565 pounds (1.54
million kg). North Carolina made three transfers during 1993 totalling
257,815 pounds (116,942 kg) of summer flounder, reducing the amount to
3,131,750 pounds (1.42 million kg). Two transfers were made to Virginia
for 125,000 pounds (56,699 kg) each; one was effective on November 3,
1993 (58 FR 59196; November 8, 1993), and the other was effective on
November 19, 1993 (58 FR 62050). The third transfer was made to New
Jersey in the amount of 7,815 pounds (3,545 kg) and was effective on
November 18, 1993 (58 FR 61844; November 23, 1993).
Further, the Regional Director is required to publish a
notification in the Federal Register advising a state, and notifying
Federal vessel and dealer permit holders that, effective upon a
specific date, a portion of a state's commercial quota has been
transferred to, or combined with, the commercial quota of another
state.
North Carolina and Rhode Island have agreed to transfer 10,000
pounds (4,536 kg) of North Carolina's commercial quota to Rhode Island.
The Regional Director has determined that the criteria set forth in
Sec. 625.20 have been met, and publishes this notification of quota
transfer. The revised quotas for the calendar year 1993 are: North
Carolina--3,121,750 pounds (1,416,016 kg); Rhode Island--1,946,851
pounds (883,086 kg).
As a result of this quota transfer, the previous notice of closure
effective December 22, 1993, is rescinded and vessels may again land
summer flounder in Rhode Island until the available 1993 quota is
harvested.
Classification
This action is required by 50 CFR part 625.
List of Subjects in 50 CFR Part 625
Fisheries, Reporting and recordkeeping requirements.
Authority: 16 U.S.C. 1801 et seq.
Dated: December 28, 1993.
David S. Crestin,
Acting Director, Office of Fisheries Conservation and Management,
National Marine Fisheries Service.
[FR Doc. 93-32091 Filed 12-28-93; 4:41 pm]
BILLING CODE 3510-22-M
Complete official Federal Register PDF
FR Doc. 93-32065 Federal Direct Student Loan Program
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 472-486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32065]
[[Page Unknown]]
[Federal Register: January 4, 1994]
_______________________________________________________________________
Part VI
Department of Education
_______________________________________________________________________
34 CFR Part 685
Federal Direct Student Loan Program; Final Rule
DEPARTMENT OF EDUCATION
34 CFR Part 685
RIN 1840-AC05
Federal Direct Student Loan Program
AGENCY: Department of Education.
ACTION: Final standards, criteria, and procedures.
-----------------------------------------------------------------------
SUMMARY: The Secretary of Education issues standards, criteria, and
procedures governing the Federal Direct Student Loan (Direct Loan)
Program in the academic year beginning July 1, 1994.
These standards, criteria, and procedures govern the Federal Direct
Stafford Loans Program, the Federal Direct Unsubsidized Stafford Loans
Program, and the Federal Direct PLUS Program, collectively referred to
as the Direct Loan Program.
EFFECTIVE DATE: The standards, criteria, and procedures in this notice
are effective on January 4, 1994, with the exception of Secs. 685.204,
685.206, 685.301, 685.302, 685.303, 685.304, and 685.308. These
sections will become effective after the information collection
requirements contained in those sections have been submitted by the
Department of Education to, and approved by, the Office of Management
and Budget under the Paperwork Reduction Act of 1980. If you want to
know the effective date of these sections, call or write the Department
of Education contact person. A document announcing the effective date
will be published in the Federal Register.
FOR FURTHER INFORMATION CONTACT:
Lloyd Robertson, U.S. Department of Education, 400 Maryland Avenue,
SW., (room 4310, ROB-3), Washington, DC 20202-5162. Telephone: (202)
708-8242. Individuals who use a telecommunications device for the deaf
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through
Friday.
SUPPLEMENTARY INFORMATION: The Student Loan Reform Act of 1993, enacted
on August 10, 1993, established the Direct Loan Program under the
Higher Education Act of 1965, as amended (HEA). See subtitle A of the
Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66). Under the
Direct Loan Program, loan capital is provided directly to student and
parent borrowers by the Federal Government rather than through private
lenders. This program replaces the direct loan demonstration program
that was authorized to begin in July 1994 by the Higher Education
Amendments of 1992 (Pub. L. 102-325).
The HEA directs the Secretary to consult with members of the higher
education community and to publish a notice of standards, criteria, and
procedures for the program's first year in lieu of issuing regulations
using the Department's usual procedures. The Secretary's
representatives participated in regional meetings at various locations
around the country in which members of the higher education community
including representatives of colleges, universities, proprietary
schools, and educational associations were consulted. The Secretary's
representatives have also met with numerous national, regional, and
state organizations representing the financial aid community to discuss
various aspects of the Direct Loan Program. The Secretary's
representatives have met with personnel from schools and financial
advisors to assist in the development of the software that will be used
by Direct Loan Program schools. In addition, the notice is based in
part on final regulations for the direct loan demonstration program in
34 CFR part 685 that were published in the Federal Register on July 2,
1993 (58 FR 36088), following the publication of a notice of proposed
rulemaking and consideration of public comment. The Secretary believes
that participating schools' familiarity with those regulations will
ease the burden of their participation in the Direct Loan Program.
This notice establishes the policies and procedures necessary for
schools to implement the Direct Loan Program and most of the policies
and procedures relating to borrowers in the Direct Loan Program. The
Secretary anticipates publishing another notice in the spring of 1994
to govern repayment of loans for the 1994-1995 academic year and
establish standards and procedures relating to Federal Direct
Consolidation Loans.
I. Background
On September 10, 1993, the Secretary published a notice in the
Federal Register (58 FR 47816) soliciting applications from schools for
participation in the Direct Loan Program. Over 1,100 schools responded
to that invitation. The Secretary selected 104 schools, representing
approximately five percent (5%) of the total Federal Family Education
Loan Program (FFEL) loan volume, to participate in the Direct Loan
Program for the academic year beginning July 1, 1994. The rules in this
notice are applicable for the period beginning July 1, 1994, and ending
June 30, 1995. As required by statute, program regulations for the
Direct Loan Program in future years will be developed through the use
of a negotiated rulemaking process to the extent practicable.
II. Participation
Schools may participate in the Direct Loan Program by originating
loans directly, by participating in a consortium of schools that
originates loans directly, or by using an alternative originator to
originate loans. All schools are responsible for determining student
eligibility for Direct Loan and disbursing loan proceeds to borrowers.
Some schools participate in the Direct Loan Program and the FFEL
concurrently, while the rest of the selected schools participate
exclusively in the Direct Loan Program. Some of the schools that
participate in both programs concurrently make Direct Loans available
to first time borrowers only; other schools make Direct Loans available
to students studying in certain divisions of the school and make FFEL
loans available to their other students.
The standards and procedures in this notice are, unless otherwise
noted, applicable to each participating school regardless of its method
or volume of participation. As stated in the notice announcing the
selection of participating schools for the 1994-95 academic year, a
school may withdraw from participation within 30 days of the
publication of these standards, criteria, and procedures.
III. Administrative Fee for Loan Origination
Schools and consortia that originate loans will be paid a fee to
assist in meeting the costs of loan origination, including the costs
associated with drawing down the funds, maintaining the Direct Loan
Program account, and reconciling cash and individual loan records with
the Secretary each month. The Secretary prefers that originating
schools print promissory note/disclosure statements on site. To assist
in compensating for the costs associated with this function, schools
that print promissory notes/disclosure statements will be paid a larger
fee than schools that do not print promissory note/disclosure
statements.
The administrative fee is paid for borrowers for whom a first
disbursement has been made and for whom the first disbursement has been
reconciled with the Secretary. For the 1994-1995 academic year, the
program-wide average administrative fee may not exceed $10 per
borrower. The Secretary will notify schools that originate loans of the
actual fee schedule and payment procedures when they are determined.
This fee structure is applicable to the first year of the program
only and is likely to be restructured through the negotiated rulemaking
process and when additional data are available.
IV. Making Direct Loans
Beginning with the 1994-95 academic year, all student applications
for Federal student aid, including Direct Loans, will be processed by
the Central Processor System (CPS). The school will receive an official
output from the CPS in the form of a Student Aid Report (SAR) or an
Electronic Student Aid Report (ESAR). The ESAR output may be on tapes,
cartridges, or rosters. With this official output, the school will be
able to assemble a financial aid award package. A school participating
in the Direct Loan Program may package Direct Loans as part of the
financial aid package in the same manner that a school participating in
the FFEL Program packages FFEL Program loans.
A school in the Direct Loan Program will either originate loans or
use the services for an alternative originator. A school will use an
alternative originator if it chooses not to originate loans or is not
eligible to originate loans. For the first year of the Direct Loan
Program, the criteria for eligibility to originate were prescribed by
statute. These criteria were included in the September 10, 1993 Federal
Register notice.
A. Originating Schools
Under the Direct Loan Program, schools and consortia that originate
loans must use software provided by the Secretary, or other software
based on specifications provided by the Secretary, to create a loan-
origination record containing the basic information necessary to make a
loan. The software provided by the Secretary reformats the data
received from the CPS and prompts the school to add data collected by
the school, such as the type of loan, loan amount, and disbursement
dates. Because schools have different needs, various options are
available to schools after they generate the loan origination record.
The software allows schools to computer-generate combined promissory
notes/disclosure statements. Alternatively, a school could transmit the
information collected by the school to the Direct Loan Program
Servicer, which upon request, will print promissory notes/disclosure
statements on behalf of the school and ship them to the school.
A student who accepts a Direct Loan completes a promissory note and
returns it to the school; the school may not disburse Direct Loan funds
without a completed promissory note.
An originating school in the Direct Loan Program requests and
obtains loan funds from the Secretary using a process similar to the
process for drawing down funds for other Department of Education (ED)
programs. The Secretary adopted this process to ease the burden on
schools participating in the Direct Loan Program. The Direct Loan
Program system, however, differs from the systems used for other ED
programs in two ways. First, a school transmits to ED a specific Direct
Loan funding request that is separate from its funding requests for
other programs. Direct Loan capital must be tracked separately and
cannot be used for purposes other than making Direct Loans. The actual
transmission request and subsequent electronic transfer of funds uses
the same delivery process as is used for the Federal Pell Grant
Program. After a request for funds is received, the Secretary uses the
Automated Clearinghouse (ACH) process through the Federal Reserve
Banking system to deposit funds in a school's designated bank account.
Currently, this process takes between 48 to 72 hours from the school's
request for funds until the school's receipt of funds.
The second difference between the Direct Loan Program system and
the system used for other ED programs is that the amount of loan
capital needed by the school is dependent on the eligibility of student
and parent borrowers at the school. Funds for the Direct Loan Program
are not limited by Congressional appropriations. As a result, there is
no need for a maximum funding level to be authorized for a school in
the Direct Loan Program. The Direct Loan system, however, incorporates
internal fund controls to monitor school drawdown requests; these
controls will flag any requests that appear excessive. The system also
identifies schools that have failed to comply with program
requirements. These flags result in immediate inquiry and intervention
by the Secretary.
The software provided by the Secretary computes gross
disbursements, loan fees, and net disbursements on the basis of the
loan amounts entered by the school. A school requests the amount needed
to fund net disbursements to borrowers. The Secretary expects that
schools will follow the guidelines for cash management set out in The
Blue Book, which is the manual of accounting, recordkeeping, and
reporting requirements for postsecondary educational institutions under
the federally-funded student financial aid programs. This notice
requires any interest earned on funds drawn down to be returned to the
Secretary. For future years, the Secretary anticipates that issues
related to fiscal control and final accountability will be addressed in
more detail in negotiated rulemaking.
After receiving funds from the Secretary, a school disburses funds
to students by crediting their accounts at the school or by sending
checks to the students. Before a school may disburse funds to a
borrower, the school must ensure that it has a completed and signed
promissory note. After the first disbursement is made, the school must
record the actual disbursed amount and the date of each disbursement in
the loan-origination record and transmit all completed loan records and
promissory notes to the Secretary. The school transmits subsequent
disbursement data to the Secretary as the disbursements occur.
A school is required to reconcile cash and individual loan records
monthly. To reconcile cash, a school must provide documentation that
the total disbursement minus cancellations, plus return of excess cash,
is equal to the amount of money the school has drawn down during a one-
month period by the end of the next month. For example, loan records
and promissory notes for all disbursements and cancellations made in
July 1994 must be transmitted to the Secretary by the end of August
1994. To reconcile loan records, a school's records must match the
records of the Direct Loan Program Servicer. The software that is
provided to participating schools is designed to assist schools in this
reconciliation process.
B. Schools That Use an Alternative Originator
Schools that use an alternative originator transmit to the Direct
Loan Program Servicer the data necessary for the Direct Loan Program
Servicer to generate the combined promissory note/disclosure statement
unless the school chooses to print the promissory note/disclosure
statement on its premises. After the Direct Loan Program Servicer
generates the promissory note/disclosure statement, it is sent to the
school or to the borrower depending upon the school's established
procedures. The borrower must complete the promissory note/disclosure
statement and forward it as instructed to the Direct Loan Program
Servicer or to the school. The Direct Loan Program Servicer must review
the promissory note/disclosure statement before funds can be disbursed.
If the Direct Loan Program Servicer or the school determines that the
promissory note/disclosure statement is not accurate or complete, the
promissory note/disclosure statement must be correct and complete
before funds can be disbursed. The Direct Loan Program Servicer
initiates drawdown of funds to the school based on the completed
promissory note/disclosure statement. The school also receives a roster
from the Direct Loan Program Servicer identifying each borrower, the
disbursement date and amount to be disbursed for each borrower, and the
total amount of funds received by the school. Schools that use
alternative origination are still responsible for reporting actual
disbursement data, reconciling cash, and returning funds that are not
used or for which the borrower is not eligible.
In short, the procedures used by a school that uses alternative
origination differ in two ways from the procedures of originating
schools. The first is that a school under alternative origination may
choose to designate the alternative originator as the manager of
promissory note/disclosure statements. The second is that a school
under alternative origination does not manage the funds draw down
process; instead, the school receives funds drawn down by the
alternative originator only for those completed promissory notes in the
possession of the alternative originator.
The Secretary anticipates that issues related to participation of
alternative originators in future years will be subject to the
negotiated rulemaking process.
C. Federal Direct PLUS Loans
Federal Direct PLUS loans are made through a process similar to the
one used in the Federal PLUS loan program. The parent obtains a
combined application/promissory note from the school and, after
completing the combined application/promissory note, sends it to the
school. The school completes the school section of the application/
promissory note and forwards it to the Direct Loan Program Servicer
where data from the note is key entered and a credit check is
performed. Alternatively, a school enters data from the note using the
software provided by the Direct Loan Program Servicer and
electronically forwards this information to the Direct Loan Program
Servicer. In either case, the Direct Loan Program Servicer performs a
credit check to determine, as required by section 428B(a) of the HEA,
whether the parent has an adverse credit history and notifies the
school and the parent of the results. If the loan is approved, the
Direct Loan Program Servicer sends a disclosure statement to the
parent. If the credit check indicates an adverse credit history, the
Secretary advises the parent of available options; for example, the
parent could obtain an endorser without an adverse credit history. If
the loan is approved and the school originates loans, the school may
draw down money and disburse loan funds in the same manner as it would
for other loans made under the Direct Loan Program. If the school does
not originate loans, the alternative originator electronically
transmits the funding request for the school based on the application/
promissory notes that the Direct Loan Program Servicer holds for that
school.
V. Loan Servicing
The Secretary is responsible for servicing and collecting Direct
Loans. As noted above, a notice specifically concerned with repayment
and collection will be published shortly.
A school's interaction with the Direct Loan Program Servicer during
the servicing and collection of the loan is similar to the interaction
schools currently have with lenders and guaranty agencies in the FFEL
Program. Schools must respond to periodic student status confirmation
requests as well as to ad hoc requests for information regarding
borrowers from the Direct Loan Program Servicer.
Borrowers who default on Direct Loans are added to ED's debt
collection system and are subject to all legally authorized default-
collection activities.
VI. Impact of Other Rules
Many of the provisions of the FFEL Program that are applicable to
the Direct Loan Program have been incorporated into this notice of
standards, criteria, and procedures. The Secretary adopted those
provisions because schools are familiar with them from their
participation in the FFEL Program. Certain policies and procedures
currently being developed through negotiated rulemaking for FFEL
Program regulations will be adopted in the Direct Loan Program,
including policies relating to borrower forgiveness for students who
attended schools that have closed or whose eligibility was falsely
certified and policies controlling the deferment for economic hardship.
VII. Summary of Contents
A. Subpart A--Purpose and Scope
Subpart A contains descriptions of the types of loans that will be
made, the entities involved, and the definitions used in the Direct
Loan Program.
B. Subpart B--Borrower Provisions
Subpart B contains conditions of borrower eligibility, which are
identical to the borrower eligibility provisions in the FFEL Program.
The charges for which borrowers are responsible, loan limits, deferment
and forbearance options, and borrower defenses to repayment are also
included. The Student Loan Reform Act of 1993 eliminated the Federal
Supplemental Loans for Students (SLS) program but increased the loan
limits for the Unsubsidized Stafford Program beginning July 1, 1994.
The Higher Education Technical Amendments of 1993 further revised the
loan limits. The revised loan limits are included in this notice along
with a chart (Appendix A) which illustrates the loan limits that will
be applicable as of July 1, 1994.
C. Subpart C--Requirements, Standards, and Payments for Schools in the
Direct Loan Program
Subpart C contains those provisions governing a school's
participation in the Direct Loan Program, including disbursement
procedures, entrance and exit counseling, withdrawal procedures,
recordkeeping and funds control requirements. The Secretary anticipates
that schools will continue with the conscientious efforts demonstrated
in the FFEL Program in tailoring the counseling to the borrower's
particular needs and making counseling accessible. These efforts have
included, for example, sign language interpreters for hearing impaired
borrowers or translations for limited English proficient borrowers.
Executive Order 12866
The contents of this notice have been reviewed in accordance with
Executive Order 12866. Under the terms of the order, the Secretary has
assessed the potential costs and benefits of the standards, criteria,
and procedures in this notice.
The potential costs associated with the contents of this notice are
those resulting from statutory requirements and those determined by the
Secretary to be necessary for administering this program effectively
and efficiently. In assessing the potential costs and benefits--both
quantitative and qualitative--of these standards, criteria, and
procedures, the Secretary has determined that the benefits of these
standards, criteria, and procedures justify the costs.
The Secretary has also determined that the contents of this notice
do not unduly interfere with State, local, and tribal governments in
the exercise of their governmental functions.
The contents of this notice are consistent with the requirements of
the HEA and promote the President's priorities.
Waiver of Rulemaking
It is the practice of the Secretary to offer interested parties an
opportunity to comment on proposed regulations. However, Public Law
103-66 requires that the Secretary publish a notice in lieu of
regulations for the first year of the Direct Loan Program and exempts
the contents of the notice from the rulemaking requirements of section
431 of the General Education Provisions Act. While the Secretary has
consulted with members of the higher education community in the
development of this notice, the statutory timeframe for the program
does not permit the solicitation of further public comment. A public
comment period, while helpful, would seriously delay the provision of
necessary guidance for the operation of the Direct Loan Program.
Therefore, the Secretary finds that solicitation of public comments
would be impracticable and contrary to the public interest under 5
U.S.C. 553(b)(B).
List of Subjects in 34 CFR Part 685
Administrative practice or procedure, Colleges and universities,
Education, Loan programs-education, Student aid, Vocational education.
(Catalog of Federal Domestic Assistance Number 84.268, Federal
Direct Student Loan Program)
Dated: December 27, 1993.
Richard W. Riley,
Secretary of Education.
The Secretary revises part 685 of title 34 of the Code of Federal
Regulations to read as follows:
PART 685--STANDARDS, CRITERIA, AND PROCEDURES FOR THE DIRECT LOANS
PROGRAM
Subpart A--Purpose and Scope
Sec.
685.100 The Federal Direct Student Loan Program.
685.101 Participation in the Direct Loan Program.
685.102 Definitions.
685.103 Applicability of subparts.
Subpart B--Borrower Provisions
685.200 Borrower eligibility.
685.201 Obtaining a loan.
685.202 Charges for which Direct Loan Program borrowers are
responsible.
685.203 Loan limits.
685.204 Deferment.
685.205 Forbearance.
685.206 Borrower responsibilities.
Subpart C--Requirements, Standards and Payments for Direct Loan Program
Schools
685.300 Agreements between an eligible school and the Secretary for
participation in the Direct Loan Program.
685.301 Certification by a Direct Loan Program school for a loan.
685.302 Correspondence school schedule requirements.
685.303 Disbursing borrowers' loan proceeds and counseling
borrowers.
685.304 Determining the date of a student's withdrawal.
685.305 Payment of a refund to the Secretary.
685.306 Withdrawal procedure for schools participating in the
Direct Loan Program.
685.307 Remedial actions.
685.308 Administrative and fiscal control and fund accounting
requirements for schools participating in the Direct Loan Program.
Appendix A New Loan Maximums as of July 1, 1994
Authority: 20 U.S.C. 1087a et seq.
Subpart A--Purpose and Scope
Sec. 685.100 The Federal Direct Student Loan Program.
(a) Under the Federal Direct Student Loan Program (Direct Loan
Program), the Secretary makes loans to enable a student or parent to
pay the costs of the student's attendance at postsecondary schools.
This part governs the Federal Direct Stafford Loan Program, the Federal
Direct Unsubsidized Stafford Loan Program, and the Federal Direct PLUS
Program for the academic year beginning July 1, 1994. The Secretary
makes loans under the following program components:
(1) Federal Direct Stafford Loan Program, which provides loans to
undergraduate, graduate, and professional students. The Secretary
subsidizes the interest while the borrower is in an in-school, grace,
or deferment period.
(2) Federal Direct Unsubsidized Stafford Loan Program, which
provides loans to undergraduate, graduate and professional students.
The borrower is responsible for the interest that accrues during any
period.
(3) Federal Direct PLUS Program, which provides loans to parents of
dependent students. The borrower is responsible for the interest that
accrues during any period.
(b) The Secretary makes a Federal Direct Stafford Loan, a Federal
Direct Unsubsidized Stafford Loan, or a Federal Direct PLUS loan only
to a student or a parent of a student enrolled in a school that has
been selected by the Secretary to participate in the Direct Loan
Program.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.101 Participation in the Direct Loan Program.
(a)(1) Colleges, universities, graduate and professional schools,
vocational, and technical schools selected by the Secretary may
participate in the Direct Loan Program. Participation in the Direct
Loan Program enables an eligible student or parent to obtain a loan to
pay for the student's cost of education at the school.
(2) The Secretary has the authority to permit a school to
participate in both the Federal Family Education Loan (FFEL) Program,
as defined in 34 CFR part 600 and the Direct Loan Program. A school
permitted to participate in both the FFEL Program and the Direct Loan
Program may certify loans under the FFEL Program according to the terms
of its agreement with the Secretary.
(b) An eligible student who is enrolled at a school participating
in the Direct Loan Program may borrow under the Federal Direct Stafford
Loan and Federal Direct Unsubsidized Stafford Loan programs. A parent
of an eligible dependent student may borrow under the Federal Direct
PLUS Program.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.102 Definitions.
(a)(1) The following definitions are set forth in the Student
Assistance General Provisions, 34 CFR part 668:
Academic year
Campus-based programs
Dependent student
Eligible program
Eligible student
Enrolled
Federal Consolidation Loan Program
Federal Direct Student Loan Program (Direct Loan Program)
Federal Pell Grant Program
Federal Perkins Loan Program
Federal PLUS Program
Federal-State Student Incentive Grant Program
Federal Supplemental Educational Opportunity Grant Program
Federal Work-Study Program
Independent student
Parent
State
U.S. citizen or national
(2) The following definitions are set forth in the regulations for
Institutional Eligibility Under the Higher Education Act of 1965, as
amended, 34 CFR part 600:
Accredited
Clock hour
Educational program
Eligible institution
Federal Family Education Loan (FFEL) Program
Institution of higher education
Nationally recognized accrediting agency or association
Preaccredited
Program of study by correspondence
Secretary
(3) The following definitions are set forth in the regulations for
the Federal Family Education Loan (FFEL) Program, 34 CFR part 682:
Act
Endorser
Expected family contribution
Federal Insured Student Loan (FISL) Program
Federal Stafford Loan Program
Foreign school
Full-time student
Graduate or professional student
Guaranty agency
Holder
Legal guardian
Lender
Totally and permanently disabled
Undergraduate student
(b) The following definitions also apply to this part:
Alternative originator: An entity that originates Direct Loans to
students and parents of students who attend a Direct Loan Program
school that does not have an agreement with the Secretary to originate
loans.
Direct Loan Program borrower: An individual to whom a Direct Loan
is made.
Default: The failure of a borrower and endorser, if any, to make an
installment payment when due, or to meet other terms of the promissory
note, if the Secretary finds it reasonable to conclude that the
borrower and endorser, if any, no longer intend to honor the obligation
to repay, provided that this failure persists for--
(1) 180 days for a loan repayable in monthly installments; or
(2) 240 days for a loan repayable in less frequent installments.
Direct Loan Program school: A school that has an agreement with the
Secretary under Sec. 685.300 to participate in the Direct Loan Program.
Disbursement: The delivery of loan proceeds by a school to a
borrower, either directly or by applying the proceeds to the student's
account with the school.
Estimated cost of attendance: The tuition and fees normally
assessed a student carrying the same academic workload as the student
to whom or on whose behalf a Direct Loan is sought, as determined by
the school, plus the school's estimate of other expenses reasonably
related to attendance at that school, for the period of enrollment for
which the loan is sought. They may include, but are not limited to--
(1) The costs for rental or purchase of any equipment, materials,
or supplies required of all students in the student's course of study,
except for the cost of rental or purchase of telecommunications
equipment for a student receiving all or part of his or her instruction
by means of that telecommunications technology;
(2) For a student attending the school on at least a half-time
basis, an allowance for books, supplies, transportation, and
miscellaneous personal expenses;
(3) If applicable, the loan fee for the loan;
(4) An allowance, as determined by the school, for room and board
costs incurred by the student that includes--
(i) For a student, without dependents, residing at home with
parents, an allowance of at least $1,500;
(ii) For a student, without dependents, residing in institutionally
owned or operated housing, a standard allowance based on the amount
normally assessed most of the school's residents for room and board;
and
(iii) For all other students, an allowance of not less than $2,500
for expenses reasonably incurred by those students for room and board;
(5) For a student enrolled in a program of study by correspondence,
only the tuition and fees and, if required, books and supplies, travel,
and room and board costs incurred specifically in fulfilling a required
period of residential training;
(6) For a student enrolled in an educational program that normally
includes a formal program of study abroad, reasonable costs associated
with that study;
(7) For a student with one or more dependents, an allowance based
on the expenses reasonably incurred for dependent care based on the
number and age of the dependents; and
(8) For a student with a disability, an allowance for those
expenses related to his or her disability, including special services,
transportation, equipment, and supplies that reasonably are incurred
and not provided by other assisting agencies.
Estimated financial assistance: (1) The estimated amount of
assistance that a student has been or will be awarded, for a period of
enrollment, from Federal, State, institutional, or other scholarship,
grant, financial need-based employment, or loan programs, including but
not limited to--
(i) Veterans' educational benefits paid under chapters 30, 31, 32,
and 35 of title 38 of the United States Code;
(ii) Educational benefits paid under chapters 106 and 107 of title
10 of the United States Code (Selected Reserve Educational Assistance
Program);
(iii) Reserve Officer Training Corps (ROTC) scholarships and
subsistence allowances awarded under chapter 2 of title 10 and chapter
2 of title 37 of the United States Code;
(iv) Benefits paid under Public Law 97-376, section 156: Restored
Entitlement Program for Survivors (or Quayle benefits);
(v) Benefits paid under Public Law 96-342, section 903: Educational
Assistance Pilot Program;
(vi) Any educational benefits paid because of enrollment in a
postsecondary education institution;
(vii) The estimated amount of other Federal student financial aid,
including, but not limited to, a Federal Direct Stafford loan eligible
for interest subsidies, Federal Pell Grants, and to the extent funding
is available, campus-based aid the student would be expected to receive
if the student has applied or will apply for that aid; and
(viii) In the case of a Federal Direct PLUS loan, the estimated
amount of other Federal student financial aid, including but not
limited to, a Federal Direct Stafford loan, Federal Pell grant, and
campus-based aid that the student has been or will be awarded.
(ix) If the student is applying for a loan to cover expenses
incurred within the same enrollment period as that for which a prior
Federal or conventional student loan was received, the amount of loan
proceeds withheld by the Secretary, lender, or guaranty agency making
or insuring the loan if those costs were included in computing the
borrower's estimated cost of attendance for the prior loan.
(2) The estimated amount of assistance does not include--
(i) Those amounts used to replace the expected family contribution,
including--
(A) Federal Direct PLUS loan amounts; and
(B) Private and State-sponsored loan program loan amounts; and
(ii) Federal Perkins loan and Federal Work-Study funds that the
school determines the student has declined for an acceptable reason.
Federal Direct PLUS Program: A loan program authorized by title IV,
part D of the Act that provides loans to parents of undergraduate
students attending Direct Loan Program schools and one of the
components of the Direct Loan Program.
Federal Direct Stafford Loan Program: A loan program authorized by
title IV, part D of the Act that provides loans to undergraduate,
graduate, and professional students attending Direct Loan Program
schools and one of the components of the Direct Loan Program.
Federal Direct Unsubsidized Stafford Loan Program: A loan program
authorized by title IV, part D of the Act that provides loans to
undergraduate, graduate, and professional students attending Direct
Loan Program schools and one of the components of the Direct Loan
Program. The interest that accrues during all periods is paid by the
borrower.
Grace period: The period that begins on the day after a Direct Loan
Program borrower ceases to be enrolled as at least a half-time student
at an eligible institution and ends on the day before the repayment
period begins.
Half-time student: A student enrolled in a school that is
participating in the FFEL Program or the Direct Loan Program and is
carrying an academic workload that amounts to at least one-half the
workload of a full-time student, as determined by the school, and is
not a full-time student. A student enrolled solely in an eligible
program of study by correspondence as defined in 34 CFR 668.8 is
considered a half-time student.
Interest rate: The annual interest rate that is charged on a loan,
under title IV, part D of the Act.
Loan fee: A fee, payable by the borrower, that is used to help
defray the costs of the Direct Loan Program.
Originating school: A school that has an agreement with the
Secretary under Sec. 685.300(b) to originate loans in the Direct Loan
Program. An originating school requests and obtains funds to originate
Direct Loans using a draw down process similar to the process for
drawing down funds for other federal student aid programs.
Period of enrollment: The period for which a Federal Direct
Stafford, Federal Direct Unsubsidized Stafford, or Federal Direct PLUS
loan is intended. The period of enrollment must coincide with a bona
fide academic term (i.e., semester trimester, quarter, academic year,
and length of the program of study), established by the school, for
which institutional charges are generally assessed. The period of
enrollment is also referred to as the loan period.
Repayment period: (1) For a Federal Direct Stafford Loan or Federal
Direct Unsubsidized Stafford Loan, the period beginning on the date
following the expiration of the grace period and ending when the loan
is paid-in-full, exclusive of any period of deferment or forbearance.
(2) For a Federal Direct PLUS loan, the period that begins on the
date the loan is fully disbursed and ends when the loan is paid-in-
full, exclusive of any period of deferment or forbearance.
Satisfactory repayment arrangement. The making of six consecutive
voluntary on-time full monthly payments on a defaulted loan to regain
further eligibility for Direct Loan Program loans. The required monthly
payment amount may not be more than is reasonable and affordable based
on the borrower's total financial circumstances. On-time means a
payment made within fifteen days of the scheduled due date and
voluntary payments are those payments made directly by the borrower,
regardless of whether there is a judgment against the borrower, and do
not include payments obtained by income tax offset, garnishment, or
income or asset execution.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.103 Applicability of subparts.
(a) Subpart A contains general information regarding the purpose
and scope of the Direct Loan Program.
(b) Subpart B contains provisions that apply to borrowers in the
Direct Loan Program.
(c) Subpart C contains certain requirements that apply to schools
in the Direct Loan Program.
(Authority: 20 U.S.C. 1087a et seq.)
Subpart B--Borrower Provisions
Sec. 685.200 Borrower eligibility.
(a)(1) Student borrower. A student is eligible to receive a Federal
Direct Stafford Loan, or a Federal Direct Unsubsidized Stafford Loan,
or a combination of such loans, if the student is enrolled in a Direct
Loan Program school, meets the requirements for an eligible student
under 34 CFR part 668, and--
(i) In the case of an undergraduate student who seeks a Federal
Direct Stafford or Federal Direct Unsubsidized Stafford Loan for the
cost of attendance at a school that participates in the Federal Pell
Grant Program, has received a final determination, or, in the case of a
student who has filed an application with the school for a Federal Pell
Grant, a preliminary determination from the school of the student's
eligibility or ineligibility for a Federal Pell Grant and, if eligible,
has applied for the period of enrollment for which the loan is sought;
(ii)(A) Reaffirms any FFEL Program or Direct Loan Program amount
that previously was cancelled due to the borrower's total and permanent
disability, or that was discharged in bankruptcy, or written off.
(B) For purposes of this paragraph, reaffirmation means the
acknowledgement of the loan by the borrower in a legally binding
manner. The acknowledgement may include, but is not limited to, the
borrower--
(1) Signing a new promissory note or repayment schedule; or
(2) Making a payment on the loan;
(iii)(A) In the case of a borrower whose previous loan was
cancelled due to total and permanent disability, obtains a
certification from a physician that the borrower's condition has
improved and that the borrower is able to engage in substantial gainful
activity; and
(B) Signs a statement acknowledging that any Direct Loan the
borrower receives cannot be cancelled in the future on the basis of any
present impairment, unless that condition substantially deteriorates;
(iv) In the case of any student who seeks a loan but does not have
a certificate of graduation from a school providing secondary education
or the recognized equivalent of such a certificate, has passed an
independently administered examination approved by the Secretary; and
(v) Is not serving in a medical internship or residency program,
except for an internship in dentistry.
(2) Special conditions for Federal Direct Stafford Loan borrowers.
(i) A Federal Direct Stafford loan borrower must demonstrate
financial need in accordance with title IV, part F of the act.
(ii) The Secretary considers a member of a religious order, group,
community, society, agency, or other organization who is pursuing a
course of study at an institution of higher education to have no
financial need if that organization--
(A) Has as its primary objective the promotion of ideals and
beliefs regarding a Supreme Being;
(B) Requires its members to forego monetary or other support
substantially beyond the support it provides; and
(C)(1) Directs the member to pursue the course of study; or
(2) Provides subsistence support to its members.
(b) Parent borrower. A parent is eligible to receive a Federal
Direct PLUS loan, if the parent--
(1) Is borrowing to pay for the educational costs of a dependent
undergraduate student who meets the requirements for an eligible
student set forth in 34 CFR part 668;
(2) Provides his or her and the student's social security number;
(3) Meets the requirements pertaining to citizenship and residency
that apply to the student in 34 CFR 668.7;
(4) Meets the requirements concerning defaults and overpayments
that apply to the student in 34 CFR 668.7;
(5) Except for the completion of a Statement of Selective Service
Registration Status, complies with the requirements for submission of a
Statement of Educational Purpose that apply to the student in 34 CFR
part 668; and
(6) Meets the requirements of paragraphs (a)(1)(ii) and (a)(1)(iii)
of this section; and
(7)(i)(A) Does not have an adverse credit history; or
(B) Has an adverse credit history, but has obtained an endorser who
does not have an adverse credit history.
(ii) For purposes of paragraph (b)(7)(i) of this section, an
adverse credit history means that as of the date of the credit report,
the applicant--
(A) Is 90 or more days delinquent on any debt;
(B) Has been the subject of a default determination on any debt; or
(C) Has been the subject of a bankruptcy discharge, foreclosure,
repossession, tax lien, wage garnishment or write-off of a Title IV
debt during the five years preceding the date of the credit report.
(c) Use of loan proceeds to replace expected family contribution. A
borrower may use the amount of a Federal Direct Unsubsidized Loan,
Federal Direct PLUS loan, State-sponsored loan or other non-Federal
loan obtained for a loan period to replace the expected family
contribution for that loan period.
(d) Defaulted FFEL Program borrower. In the case of a student, or
parent, borrower who is currently in default on an FFEL Program loan,
the borrower must make satisfactory repayment arrangements on the
defaulted loan.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.201 Obtaining a loan.
(a) Application for a Federal Direct Stafford loan. To obtain a
Federal Direct Stafford loan, a student shall complete and submit a
Free Application for Federal Student Aid. If the student is eligible
for a Federal Direct Stafford loan, the school shall obtain a completed
promissory note from the student and complete the origination of the
loan. If the student is attending a school that uses an alternative
originator, the school must transmit the student's loan origination
record to the alternative originator, which will complete the
origination of the loan.
(b) Application for a Federal Direct Unsubsidized loan. To obtain a
Federal Direct Unsubsidized loan, a student shall complete and submit a
Free Application for Federal Student Aid. If the student is eligible
for a Federal Direct Unsubsidized Stafford loan, the school shall
obtain a completed promissory note from the student and complete the
origination of the loan. If the student is attending a school that uses
an alternative originator, the school must transmit a student's loan
origination record to the alternative originator, which will complete
the origination of the loan.
(c) Application for a Federal Direct PLUS loan. To obtain a Federal
Direct PLUS loan, the parent shall complete an application/promissory
note and submit it to the school. After the school completes its
portion of the application/promissory note, the school submits it to
the Secretary. If the parent does not have an adverse credit history an
originating school shall complete the origination of the loan. If the
student for whom the loan is intended is attending a school that uses
an alternative originator, the alternative originator will complete the
origination of the loan.
(Authority: 20 U.S.C. 1087a et seq., 1091a)
Sec. 685.202 Charges for which Direct Loan Program borrowers are
responsible.
(a) Interest--(1) Interest rate under the Federal Direct Stafford
Loan Program and the Federal Direct Unsubsidized Stafford Loan Program.
For Federal Direct Stafford Loans and Federal Direct Unsubsidized
Stafford Loans, the interest rate, during any twelve month period
beginning on July 1 and ending on June 30, is determined on the
preceding June 1 and is equal to the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction held prior to that June
1; plus 3.1 percent, but does not exceed 8.25 percent.
(2) Interest rate under the Federal Direct PLUS Program. The
interest rate on a Federal Direct PLUS loan, during any 12-month period
beginning on July 1 and ending on June 30, is determined on the
preceding June 1 and is equal to the bond equivalent rate of 52-week
Treasury bills auctioned at the final auction held prior to that June
1; plus 3.1 percent, but does not exceed nine percent.
(b) Capitalization. (1) The Secretary may add accrued interest to
the borrower's unpaid principal balance. This increase in the principal
balance of a loan is called ``capitalization.''
(2) The Secretary may capitalize interest payable by the borrower
that has accrued--
(i) During the period from the date the first disbursement was made
to the date the repayment period begins;
(ii) During a period of authorized deferment;
(iii) During a period of authorized forbearance; or
(iv) During the period from the date the first installment payment
was due until it was made.
(3) Under the Federal Direct Unsubsidized Stafford Loan Program and
the Federal Direct PLUS Program, the Secretary requires the borrower to
pay on a monthly or quarterly basis, or may capitalize on a quarterly
or less frequent basis, interest that has accrued during periods of
deferment.
(4) For a borrower who is in a period of deferment, a mandatory
forbearance, or the in-school or grace period on a Federal Direct
Unsubsidized Stafford Loan and has agreed to monthly or quarterly
payments of interest, the Secretary capitalizes past due interest after
notification to the borrower that the borrower's failure to resolve any
delinquency constitutes the borrower's consent to capitalization of
delinquent interest and all interest that would accrue through the
remainder of that period.
(c) Loan Fee for Federal Direct Stafford, Federal Direct
Unsubsidized Stafford, and Federal Direct PLUS loans. The Secretary--
(1) Charges a borrower a loan fee on a Federal Direct Stafford,
Federal Direct Unsubsidized Stafford or Federal Direct PLUS loan of
four percent of the principal amount of the loan;
(2) Deducts the loan fee from the proceeds of the loan;
(3) In the case of a loan disbursed in multiple installments,
deducts a pro rata portion of the fee from each disbursement; and
(4) Refunds by a credit against the borrower's loan balance the
portion of the loan fee previously deducted from the loan that is
attributable to a disbursement of that loan that is repaid within 120
days of disbursement.
(d) Late charge. (1) The Secretary may require the borrower to pay
a late charge of up to six cents for each dollar of each installment or
portion thereof that is late under the circumstances described in
paragraph (d)(2) of this section.
(2) The late charge may be assessed if the borrower fails to pay
all or a portion of a required installment payment within ten days
after it is due.
(e)(1) Collection charges before default. Notwithstanding any
provisions of State law, the Secretary may require that the borrower or
any endorser pay costs incurred by the Secretary or his agents in
collecting installments not paid when due, including, but not limited
to--
(i) Attorney's fees;
(ii) Court costs;
(iii) Telegrams; and
(iv) Fees on checks returned due to non-sufficient funds.
(2) Collection charges after default. If a borrower defaults on a
Direct Loan Program loan, he or she is assessed collection costs under
the formula in 34 CFR 30.60.
(Authority: 20 U.S.C. 1087a et seq., 1091a)
Sec. 685.203 Loan limits.
(a) Federal Direct Stafford Loan Program. (1) In the case of a
dependent undergraduate student who has not successfully completed the
first year of a program of undergraduate education, the total amount
the student may borrow for any academic year of study under the Federal
Direct Stafford Loan Program, and the Federal Stafford Loan Program,
may not exceed--
(i) $2,625 for a program of study of at least a full academic year
in length;
(ii) $1,750 for a program of study of at least two-thirds but less
than a full academic year in length; and
(iii) $875 for a program of study of at least one-third but less
than two-thirds of an academic year in length.
(2) In the case of a dependent undergraduate student who has
successfully completed the first year of an undergraduate program but
has not successfully completed the second year of an undergraduate
program, the total amount the student may borrow for any academic year
of study under the Federal Direct Stafford Loan Program, and the
Federal Stafford Loan Program, may not exceed--
(i) $3,500 for a program of study of at least a full academic year
in length; or
(ii) If the student is enrolled in a program of study with less
than a full academic year remaining, a prorated amount that bears the
same ratio to $3,500 as the remainder of the program measured in
semester, trimester, quarter, or clock hours bears to one academic
year.
(3) In the case of a dependent undergraduate student who has
successfully completed the first and second year of a program of study
of undergraduate education but has not successfully completed the
remainder of the program, or in the case of a student in a program who
has an associate or baccalaureate degree which is required for
admission into the program, the total amount the student may borrow for
any academic year of study under the Federal Direct Stafford Loan
Program, and the Federal Stafford Loan Program, may not exceed--
(i) $5,500 for a program of study of at least an academic year in
length;
(ii) If the student is enrolled in a program of study with less
than a full academic year remaining, a prorated amount that bears the
same ratio to $5,500 as the remainder of the program measured in
semester, trimester, quarter, or clock hours bears to one academic
year.
(4) In the case of a graduate or professional student, the total
amount the student may borrow for any academic year of study under the
Federal Direct Stafford Loan Program, in combination with any amount
borrowed under the Federal Stafford Loan Program, may not exceed
$8,500.
(b) Federal Direct Unsubsidized Stafford Loan Program. In the case
of a dependent graduate student, the total amount the student may
borrow for any period of study for the Federal Direct Unsubsidized
Stafford Loan Program and Federal Unsubsidized Stafford Loan Program is
the same as the amount determined under paragraph (a) of this section,
less any amount received under the Federal Direct Stafford Loan Program
or Federal Stafford Loan Program.
(c) Additional eligibility under the Federal Direct Unsubsidized
Stafford Loan Program. In addition to any amount borrowed under
paragraph (b), an independent undergraduate student, graduate or
professional student, or certain dependent undergraduate students may
borrow additional amounts under the Federal Direct Unsubsidized Loan
Program. In order for a dependent undergraduate student to receive this
additional loan amount, the financial aid administrator must determine
and document in the school's file, after review of the family financial
information provided by the student and consideration of the student's
debt burden, that the student's parents likely will be precluded by
exceptional circumstances (e.g., the student's parent receives only
public assistance or disability benefits, is incarcerated, has an
adverse credit history, or his or her whereabouts are unknown) from
borrowing under the Federal Direct PLUS Program or the Federal PLUS
Program and the student's family is otherwise unable to provide the
student's expected family contribution. A parent's refusal to borrow a
Federal PLUS loan or Federal Direct PLUS loan does not constitute an
exceptional circumstance. The additional amount that such a student may
borrow under the Federal Direct Unsubsidized Stafford Loan Program, in
combination with Federal Unsubsidized Stafford loans, for any academic
year of study is--
(1) In the case of a student who has not successfully completed the
first and second year of a program of undergraduate education, may not
exceed--
(i) $4,000 for enrollment in a program of study of at least a full
academic year in length;
(ii) $2,500 for enrollment in a program of study of at least two-
thirds but less than a full academic year in length;
(iii) $1,500 for enrollment in a program of study of at least one-
third but less than two-thirds of an academic year in length.
(2) In the case of a student who has successfully completed the
first and second year of an undergraduate program, but has not
completed the remainder of the program of study, may not exceed--
(i) $5,000 for enrollment in a program of study of at least a full
academic year;
(ii) If the student is enrolled in a program of study with less
than a full academic year remaining, a prorated amount that bears the
same ratio to $5,000 as the remainder of the program measured in
semester, trimester, quarter, or clock hours bears to one academic
year.
(3) In the case of a graduate or professional student, may not
exceed $10,000.2
(d) Federal Direct Stafford Loan Program and Federal Stafford Loan
Program aggregate limits. The aggregate unpaid principal amount of all
Federal Direct Stafford Loans and loans received under the Federal
Stafford Loan Program made to a student may not exceed--
(1) $23,000 in the case of any student who has not successfully
completed a program of study at the undergraduate level; and
(2) $65,500, in the case of a graduate or professional student,
including loans for undergraduate study.
(e) Federal Direct PLUS Program annual limit. The total amount of
all Federal Direct PLUS loans that a parent or parents may borrow on
behalf of each dependent student for any academic year of study may not
exceed the cost of education minus other estimated financial assistance
for that student.
(f) Federal Direct PLUS Program aggregate limit. The total amount
of all Federal Direct PLUS Program loans that a parent or parents may
borrow on behalf of each dependent student for enrollment in an
eligible program of study may not exceed the student's cost of
education minus other estimated financial assistance for that student.
(g) Federal Direct Stafford Loan and Federal Direct Unsubsidized
Stafford Loan Program aggregate limits. The total unpaid principal
amount of Federal Direct Stafford Loans, Federal Direct Unsubsidized
Stafford Loans, Federal Stafford Loans and Federal Unsubsidized
Stafford Loans may not exceed--
(1) $46,000 for an undergraduate student.
(2) $138,500 for a graduate or professional student.
(h) Minimum loan interval. The annual loan limits applicable to a
student shall apply to the length of the school's academic year as the
term is used under the FFEL Program.
(i) Treatment of Federal Direct Consolidation loans and Federal
Consolidation loans for purposes of determining loan limits. The
percentage of the outstanding balance on a Federal Direct Consolidation
loan or Federal Consolidation Loans counted against a borrower's
aggregate loan limits--
(1) For the Federal Direct Stafford Loan Program, equals the
percentage of the original amount of the Federal Direct Consolidation
loan or Federal Consolidation loan attributable to the Federal Direct
Stafford and Federal Stafford loans; and
(2) For the Federal Direct Unsubsidized Stafford Loan Program,
equals the percentage of the original amount of the Federal Direct
Consolidation loan or Federal Consolidation loan attributable to the
Federal Direct Unsubsidized Stafford Loan and Federal Unsubsidized
Stafford loans.
(j) Maximum loan amounts. In no case may a Federal Direct Stafford,
Federal Direct Unsubsidized Stafford, or Federal Direct PLUS loan
amount exceed the student's estimated cost of attendance for the period
of enrollment for which the loan is intended, less--
(1) The student's estimated financial assistance for that period;
and
(2) The borrower's expected family contribution for that period, in
the case of a Federal Direct Stafford loan.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.204 Deferment.
(a) (1) A Federal Direct Stafford Loan borrower who meets the
requirements described in subparagraph (b) is eligible for a deferment
during which periodic installments of principal need not be paid, and
interest does not accrue.
(2) A Federal Direct Unsubsidized Stafford Loan borrower or a
Federal Direct PLUS borrower who meets the requirements described in
paragraph (b) is eligible for a deferment during which periodic
installments of principal need not be paid, but interest does accrue
and is capitalized or paid by the borrower.
(b) A Direct Loan Program borrower is eligible for a deferment
during any period during which the borrower--
(1) Is carrying at least one-half the normal full-time work load
for the course of study that the borrower is pursuing, as determined by
the eligible school the borrower is attending.
(2) Is pursuing--
(i) A course of study pursuant to a graduate fellowship program
approved by the Secretary; or
(ii) A rehabilitation training program, approved by the Secretary,
for individuals with disabilities.
(3) Not in excess of three years is seeking and unable to find
full-time employment; or
(4) Not in excess of three years has experienced or will experience
an economic hardship.
(c) No borrower is eligible for a deferment, or a loan made under
this part while serving in a medical internship or residency program.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.205 Forbearance.
(a)(1) A Direct Loan Program borrower or endorser may receive
forbearance from the Secretary if the borrower or endorser is willing
but unable to make scheduled loan payments. ``Forbearance'' means
permitting the temporary cessation of payments, allowing an extension
of time for making payments, or temporarily accepting smaller payments
than previously scheduled. A forbearance is granted by the Secretary
only if the borrower or endorser requests forbearance, and--
(i) The Secretary believes that the borrower or endorser intends to
repay the loan but, due to poor health or other acceptable reasons, is
currently unable to make scheduled payments; or
(ii) The borrower's payments of principal are deferred under
Sec. 685.204 and the Secretary does not subsidize the interest benefits
on behalf of the borrower under Sec. 685.200(a)(2).
(2) If payments of interest are forborne, they are capitalized.
(b) Mandatory forbearance. (1) Medical or dental interns or
residents. Upon receipt of a written request and sufficient supporting
documentation from a borrower serving in a medical or dental internship
or residency program, the Secretary grants forbearance renewable at 12-
month intervals to a borrower--
(i) For the length of time remaining in the borrower's medical or
dental internship or residency that must be successfully completed
before the borrower may begin professional practice or service; or
(ii) For the length of time that the borrower is serving in a
medical or dental internship or residency program leading to a degree
or certificate awarded by an institution of higher education, a
hospital, or a health care facility that offers postgraduate training.
(2) Borrowers and endorsers with high debt burdens. Upon receipt of
a written request and sufficient supporting documentation from an
endorser, or from a borrower (other than a borrower who is serving in a
medical or dental internship or residency described in paragraph (i)(1)
of this section), the Secretary grants forbearance in increments of up
to one year, for periods that, collectively, do not exceed three years,
if the borrower or endorser--
(i) Is currently obligated to make payments on Title IV loans; and
(ii) The amount of such payments each month (or a proportional
share if the payments are due less frequently than monthly) is
collectively equal to or greater than 20 percent of the borrower or
endorser's monthly disposable income.
(3) Borrowers and endorsers in National and Community Service. Upon
receipt of a written request and sufficient supporting documentation
from a borrower or endorser serving in a national service position for
which the borrower or endorser receives a national service educational
award under the National and Community Service Trust Act of 1993, the
Secretary grants forbearance for the duration of the borrower's or
endorser's term of service under that statute.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.206 Borrower responsibilities and defenses.
(a) The borrower shall give the school, as part of the origination
process for a Federal Direct Stafford, Federal Direct Unsubsidized
Stafford, or Federal Direct PLUS loan--
(1) A statement, as described in 34 CFR part 668, that the loan
will be used for the cost of the student's attendance;
(2) Information demonstrating that the borrower is eligible for the
loan;
(3) Information concerning the outstanding FFEL Program and Direct
Loan Program loans of the borrower and, for a parent borrower, of the
student, including any Federal Consolidation loan or Federal Direct
Consolidation loan used to discharge a Federal Stafford, Federal PLUS
loan, Federal Direct Stafford, Federal Direct Unsubsidized Stafford or
Federal Direct PLUS loan;
(4) A statement authorizing the school to release information to
the Secretary relevant to the student's eligibility to borrow or to
have a parent borrow on the student's behalf (e.g., the student's
enrollment status, financial assistance, and employment records).
(b) The borrower shall promptly notify--
(1) The Secretary of any change of name, address, student status to
less than half-time, employer, or employer's address; and
(2) The school of any change in address during enrollment.
(c) Borrower defenses. A Direct Loan Program borrower may assert as
a defense against the repayment of the loan a claim based on the act or
omission of the school only if--
(1) The act or omission gives rise to a cause of action against the
school recognized under the law of the State in which the school
attended by the student was located;
(2) Prior to asserting the claim as a defense to repayment, the
borrower presented that claim to the school and received no
satisfaction; and
(3) The borrower presented the claim in writing to the Department
within 18 months of the date the loan was disbursed to the borrower.
(Authority: 20 U.S.C. 1087a et seq.)
Subpart C--Requirements, Standards, and Payments for Direct Loan
Program Schools
Sec. 685.300 Agreements between an eligible school and the Secretary
for participation in the Direct Loan Program.
(a) (1) General. Participation of a school in the Direct Loan
Program means that the school's students are eligible to receive Direct
Loans. To participate in the Direct Loan Program, a school must--
(i) Demonstrate to the satisfaction of the Secretary that it meets
the elements of basic eligibility as defined in 34 CFR part 600 through
certification by the Secretary; and
(ii) Enter into a written program participation agreement with the
Secretary that is signed by the Chief Executive Officer of the school
on a form approved by the Secretary.
(2) Program participation agreement. The school, in the program
participation agreement, shall promise to comply with the applicable
provisions of--
(i) The Act and applicable regulations including notices;
(ii) The Student Assistance General Provisions, 34 CFR part 668;
and
(iii) The Institutional Eligibility regulations, 34 CFR part 600.
(b) (1) In the participation agreement, the school shall agree to--
(i) Identify eligible students who seek student financial
assistance at the institution in accordance with section 484 of the
Act;
(ii) Estimate the need of each of these students as required by
part F of the Act for an academic year, except that any loan obtained
by a student under this part with the same terms as Federal Direct
Unsubsidized Stafford Loans, or Federal Direct PLUS Loans, or obtained
under any State-sponsored or private loan program, may be used to
offset the expected family contribution of the student for that year;
(iii) Provide a statement that certifies the eligibility of any
student to receive a loan under part D of the Act is not in excess of
the annual or aggregate limit applicable to the loan;
(iv) Set forth a schedule for disbursement of the proceeds of the
loan in installments, consistent with the requirements of section 428G
of the Act; and;
(v) Provide timely and accurate information to the Secretary for
the servicing and collecting of loans--
(A) Concerning the status of student borrowers (and students on
whose behalf parents borrow) while these students are in attendance at
the school and concerning any new information of which the school
becomes aware for these students (or their parents) after the student
leaves the school; and
(B) Concerning student eligibility and need, for the alternative
origination of loans to eligible students and parents in accordance
with part D of the Act;
(2) Provide assurances that the school will comply with
requirements established by the Secretary relating to student loan
information with respect to loans made under the Direct Loan Program;
(3) Provide that the school will accept responsibility and
financial liability stemming from its failure to perform its functions
pursuant to the agreement;
(4) Provide that students at the school and their parents will be
eligible to participate in the programs under part B of the Act at the
discretion of the Secretary for the period during which the school
participates in the Direct Loan Program under part D of the Act, except
that a student or parent may not receive loans under both part D of the
Act and part B of the Act for the same period of enrollment;
(5) Provide for the implementation of a quality assurance system,
as established by the Secretary and developed in consultation with the
school, to ensure that the school is complying with program
requirements and meeting program objectives;
(6) Provide that the institution will not charge any fees of any
kind, however described, to student or parent borrowers for origination
activities or the provision of any information necessary for a student
or parent to receive a loan under part D of the Act, or any benefits
associated with such loan; and
(7) Comply with other provisions that the Secretary determines are
necessary to protect the interests of the United States and to promote
the purposes of part D of the Act.
(c) Origination. A school or consortium that originates loans in
the Federal Direct Student Loan Program must have a supplemental
agreement that--
(1) Provides that the institution or consortium will originate
loans to eligible students and parents in accordance with part D of the
Act; and
(2) Provide that the note or evidence of obligation on the loan is
the property of the Secretary.
(Authority: 20 U.S.C. 1087a et seq., 1094)
Sec. 685.301 Certification by a Direct Loan Program school for a loan.
(a)(1) A school participating in the Direct Loan Program shall
ensure that any information it provides to the Secretary in connection
with loan origination is complete and accurate. Except as provided in
34 CFR part 668, subpart E, a school may rely in good faith upon
statements made on the application by the student.
(2) The information to be provided to the Secretary by the school
about the borrower receiving the loan includes but is not limited to--
(i) The borrower's eligibility for a loan, as determined in
accordance with Sec. 685.200 and Sec. 685.203;
(ii) The student's loan amount; and
(iii) The anticipated and actual disbursement date or dates and
disbursement amounts of the loan proceeds.
(3) A school may not certify a Federal Direct Stafford, Federal
Direct Unsubsidized Stafford, or Federal Direct PLUS loan, or a
combination of loans, for an amount that--
(i) The school has reason to know would result in the borrower
exceeding the annual or maximum loan amounts in Sec. 685.203; or
(ii) Exceeds the student's estimated cost of attendance, less--
(A) The student's estimated financial assistance for that period;
and
(B) In the case of a Federal Direct Stafford Loan, the borrower's
expected family contribution for that period.
(4) In determining a Federal Direct Stafford or Federal Direct
Unsubsidized Stafford loan amount in accordance with Sec. 685.203, for
a borrower enrolled in a program of study of less than 900 clock hours
or 24 semester or trimester hours, or 36 quarter hours (where the
school defines its academic year to be at least 30 weeks in length),
the school must determine the annual loan limit for the borrower by
determining what portion of the academic year the program of study
represents by calculating--
(i) Number of clock-hours in program 900 hours; or
(ii) Credit hours in program 24 semester or 36 quarter
hours.
(5) In determining a Federal Direct Stafford or Federal Direct
Unsubsidized Stafford loan amount in accordance with Sec. 685.203, for
a borrower enrolled in a program of study of less than 900 clock hours
or 24 semester or trimester hours, or 36 quarter hours (where the
school defines its academic year to be less than 30 weeks in length),
the school must determine the annual loan limit for the borrower by
determining what portion of the academic year the program of study
represents by calculating--
Number of weeks in program 30 weeks.
(6) A school may refuse to certify a Federal Direct Stafford,
Federal Direct Unsubsidized Stafford, or Federal Direct PLUS loan or
may reduce the borrower's determination of need for the loan if the
reason for that action is documented and provided to the student in
writing, provided--
(i) The determination is made on a case-by-case basis;
(ii) The documentation supporting the determination is retained in
the student's file; and
(iii) The school does not engage in any pattern or practice that
results in a denial of a borrower's access to Direct Loans because of
the borrower's race, sex, color, religion, national origin, age,
disability status, or income.
(7) A school may not assess a fee for the completion or
certification of any Direct Loan Program loan forms or information.
(b) Disbursing a loan. (1) Before disbursing a loan, a school must
determine that all information required by the loan application and
promissory note has been provided by the borrower and, if applicable,
the student.
(2) A school shall establish disbursement dates for any Direct Loan
Program loan as follows:
(i) Disbursements must be in two or more installments;
(ii) No installment may exceed one-half the loan; and
(iii) At least one-half of the loan period must elapse before the
second installment is disbursed, except as necessary to permit the
second installment to be disbursed at the beginning of the next
semester, quarter, or similar division of t
FR Doc. 93-32065 Federal Direct Student Loan Program
he loan period.
(c) Promissory note. (1) The Secretary provides promissory notes
for use in the Direct Loan Program and a school may not modify, or make
any additions to, the promissory note without the Secretary's prior
written approval.
(2) A school shall provide to the Secretary an executed legally
enforceable promissory note as proof of the borrower's indebtedness.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.302 Correspondence school schedule requirements.
(a) A school offering a course of study by correspondence shall
establish a schedule for submission of lessons by its students and
provide it to a prospective student prior to the student's enrollment.
(b) The school shall include in its schedule--
(1) A due date for each lesson in the course;
(2) A description of the options, if any, available to the student
for altering the sequence of lesson submissions from the sequence in
which they are otherwise required to be submitted;
(3) The date by which the course is to be completed; and
(4) The date by which any resident training must begin, the
location of any residential training, and the period of time within
which that resident training must be completed.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.303 Disbursing borrowers' loan proceeds and counseling
borrowers.
(a) Purpose. This section establishes rules governing a school's
disbursement of a borrower's Federal Direct Stafford, Federal Direct
Unsubsidized Stafford, or Federal Direct PLUS loan proceeds, and for
counseling borrowers. The school shall also comply with any rules for
processing a loan contained in 34 CFR part 668.
(b) General. (1) A school may not disburse any loan proceeds unless
the school or the alternative originator has obtained an executed
legally enforceable promissory note from the borrower.
(2)(i) Except in the case of a late disbursement under paragraph
(d) of this section, or as provided in paragraph (b)(2)(iii) of this
section, a school may disburse loan proceeds only to a student whom the
school determines continuously has maintained eligibility in accordance
with the provisions of Sec. 685.200 from the beginning of the loan
period certified by the school.
(ii) If, after the first disbursement is made to the student, the
student becomes ineligible due solely to the school's loss of
eligibility to participate in the Title IV programs or the Direct Loan
Program, the school may make the second or subsequent disbursement to
the borrower as permitted by 34 CFR part 668.
(iii) If, prior to when the loan is made to the student, the
student temporarily ceases to be enrolled on at least a half-time
basis, the school may make the first disbursement of the loan and any
subsequent disbursement to the student if the school subsequently
determines and documents in the student's file--
(A) That the student has resumed enrollment on at least a half-time
basis;
(B) The student's revised cost of attendance; and
(C) That the student continues to qualify for the entire amount of
the loan, notwithstanding any reduction in the student's cost of
attendance caused by the student's temporary cessation of enrollment on
at least a half-time basis.
(3) The school may credit a registered student's account with only
those loan proceeds covering costs of attendance owed to the school by
the student for which substantially all of the school's students
incurring those costs have been billed.
(4) A school may not deliver loan proceeds to a student borrower
earlier than ten days before the first day of the period of enrollment.
(5) If a registered student withdraws or is expelled prior to the
first day of classes of the period of enrollment for which the loan is
made or fails to attend school during that period, or if the school is
unable for any other reason to document that the student attended
school during that period, the school, within 30 days of the period
described in Sec. 685.304(b), shall notify the Secretary of the
student's withdrawal, expulsion, or failure to attend school, if
applicable, and return to the Secretary--
(i) Any loan proceeds credited directly by the school to the
student's account; and
(ii) The amount of payments made directly by the student to the
school, to the extent that they do not exceed the amount of any loan
proceeds delivered by the school to the student.
(6) A school may not apply the first disbursement of a Federal
Direct Stafford or Federal Direct Unsubsidized Stafford loan to the
account of a student who is enrolled in the first year of an
undergraduate program of study and who has not previously received a
Federal Stafford, Federal Supplemental Loans for Students, Federal
Direct Stafford, or Federal Direct Unsubsidized Stafford loan until 30
days after the first day of the student's program of study.
(c) Processing of the proceeds of a Direct Loan Program loan. (1)
After the student has registered, the school shall--
(i) Not more than three weeks prior to the first day of the period
of enrollment--
(A) Credit the amount of the loan proceeds to the student's
account;
(B) Notify the student or parent borrower in writing that it has so
credited that account; and
(C) Deliver to the student or parent borrower the remaining loan
proceeds, subject to paragraph (b)(5) of this section, not later than
45 days after the disbursement of the funds.
(ii) Subject to paragraph (b)(5) of this section, disburse the loan
proceeds to the borrower.
(2) A school may not credit a student's account or release the
proceeds of a loan to a student who is on a leave of absence, as
described in Sec. 685.304(c).
(d) Late disbursement. (1) For purposes of this paragraph, a
disbursement is late if the school delivers loan proceeds--
(i) After the loan period; or
(ii) Before the end of the loan period, but after the student
ceased to be enrolled at the school on at least a half-time basis.
(2) A school may make a late disbursement only if the school or the
alternative originator has received a completed promissory note prior
to the 30th day after the applicable condition in paragraph (d)(1) of
this section.
(3) Notwithstanding paragraph (d)(2) of this section, a school may
not make--
(i) A late second or subsequent disbursement of a Federal Direct
Stafford or Federal Direct Unsubsidized Stafford loan to a borrower who
has ceased to be enrolled on at least a half-time basis unless the
borrower has graduated or successfully completed the period of
enrollment for which the loan was intended; or
(ii) Any late disbursement that under 34 CFR part 668 is considered
to be awarded for a payment period in which the student was not
enrolled on at least a half-time basis at the school.
(e) Initial counseling. (1) Except in the case of a correspondence
school or for a student enrolled in a study-abroad program approved for
credit at the home institution, a school shall conduct counseling with
each Federal Direct Stafford and Federal Direct Unsubsidized Stafford
borrower either in person or by videotape presentation. In each case,
the school shall conduct this counseling prior to making the first
disbursement of the proceeds of the first Federal Direct Stafford or
Federal Direct Unsubsidized Stafford loan made to a borrower who has
not received a Federal Stafford loan for attendance at the school and
shall ensure that an individual with expertise in the title IV programs
is reasonably available shortly after the counseling to answer the
borrower's questions regarding those programs. In the case of a
correspondence school or a student enrolled in a study-abroad program
that the school approves for credit, the school shall provide the
borrower with written counseling materials by mail prior to releasing
those proceeds.
(2) In conducting the initial counseling, the school must--
(i) Emphasize to the borrower the seriousness and importance of the
repayment obligation the borrower is assuming; and
(ii) Describe in forceful terms the likely consequences of default,
including adverse credit reports, garnishment of wages, and litigation.
(3) Additional matters that the Secretary recommends that a school
include in the initial counseling session or materials are set forth in
appendix D to 34 CFR part 668.
(f) Exit counseling. (1) A school shall conduct in-person exit
counseling with each Federal Direct Stafford, or Federal Direct
Unsubsidized Stafford borrower shortly before the borrower ceases at
least half-time study at the school, except that--
(i) In the case of a correspondence school, the school shall
provide the borrower with written counseling materials by mail within
30 days after the borrower completes the program; and
(ii) If the borrower withdraws from school without the school's
prior knowledge or fails to attend an exit counseling session as
scheduled, the school shall mail written counseling material to the
borrower at the borrower's last known address within 30 days after the
school learns that the borrower has withdrawn from school or failed to
attend the scheduled session.
(2) In conducting the exit counseling, the school shall--
(i) Provide the borrower with general information with respect to
the average indebtedness of students who have obtained Federal Direct
Stafford or Federal Direct Unsubsidized Stafford loans for attendance
at that school;
(ii) Inform the student as to the average anticipated monthly
repayment for those students based on that average indebtedness;
(iii) Review for the borrower available repayment options (e.g.,
standard repayment plan, extended repayment plan, graduated repayment
plan, income contingent repayment plan, loan consolidation,
refinancing);
(iv) Suggest to the borrower debt-management strategies that the
school determines would best assist repayment by the borrower;
(v) Include the matters described in paragraph (e)(2) of this
section; and
(vi) Review with the borrower the conditions under which the
borrower may defer repayment or obtain cancellation of a loan;
(vii) Require the borrower to provide corrections to the
institutions's records concerning name, address, social security
number, references, and driver's license number, as well as the name
and address of the borrower's expected employer that must be provided
within 60 days to the Secretary.
(3) Additional matters that the Secretary recommends that a school
include in the exit counseling session or materials are set forth in
appendix D to 34 CFR part 668.
(4) The school shall maintain in the student borrower's file
documents substantiating the school's compliance with paragraphs (e)
and (f) of this section as to that borrower.
(g) Treatment of excess loan proceeds. Before the delivery of any
Federal Direct Stafford or Federal Direct Unsubsidized Stafford loan
disbursement, if a school learns that the borrower would receive or has
received financial aid for the period of enrollment for which the loan
was intended that exceeds the amount of assistance for which the
student is eligible, the school shall reduce or eliminate the overaward
by either--
(1) Using the student's Federal Direct Unsubsidized Stafford,
Federal Direct PLUS, or State-sponsored or private loan to cover the
expected family contribution, if not already done; or
(2) Reducing one or more disbursements to eliminate the overaward.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.304 Determining the date of a student's withdrawal.
(a) Purpose. This section establishes rules for how a school shall
determine the withdrawal date for a student to whom or on whose behalf
a loan has been made under this part for the purpose of reporting to
the Secretary the date that the student has withdrawn from the school
and for determining when a refund must be paid under Sec. 685.305.
(b) The withdrawal date. (1) Except as provided in paragraphs
(b)(2) and (b)(3) of this section, the student's withdrawal date is the
earlier of--
(i) The date the student notifies the school of the student's
withdrawal or the date of withdrawal specified by the student,
whichever is later; or
(ii) The date of withdrawal as determined by the school. The school
must determine the student's date of withdrawal no later than--
(A) Forty-five days after the expiration date of the academic term
in which the student was enrolled for a school that uses academic terms
(e.g., semester, trimester, or quarter), except that 30 days after the
first day of the next scheduled term may be used in the case of a
summer break; or
(B) Twenty-five days after a student's last date of attendance for
a school that measures academic progress either in clock hours or
credit hours but does not use a semester, trimester, or quarter system.
(2) If the student has not returned to school at the expiration of
a leave of absence approved under paragraph (c) of this section, the
student's withdrawal date is the first day of the leave of absence.
(3) If the student is enrolled in a program of study by
correspondence, the student's withdrawal date is the date of the last
lesson submitted if the student fails to submit the next scheduled
lesson in accordance with the schedule of lessons established under
Sec. 685.302. However, if the student establishes in writing, within 60
days of the date of the last lesson submitted, a desire to continue in
the program and an understanding that the required lessons must be
submitted on time, the school may restore that student to in-school
status for purposes of the loan made under this part. The school may
not grant the student more than one restoration to in-school status on
this basis.
(4) For the purpose of a school's reporting to the Secretary, a
student's withdrawal date is the month, day, and year of the withdrawal
date determined under paragraphs (b)(1)-(b)(3) of this section.
(c) Leaves of absence. A student who has been absent from school
and has been granted a leave of absence by a school in accordance with
this paragraph is not considered to have withdrawn from school for
purposes of paragraph (a) of this section. In any 12-month period, a
school may grant no more than a single leave of absence to a student,
provided that--
(1) The student has made a written request to be granted a leave of
absence;
(2) The leave of absence involves no additional charges by the
school to the student; and
(3) The leave of absence does not exceed--
(i) Sixty days; or
(ii) Six months under either of the following circumstances:
(A) The school is not a correspondence school and the school's next
period of enrollment after the start of the leave of absence would
begin more than 60 days after the first day of the leave of absence.
(B) The leave of absence is requested because of the student's
medically determinable condition, in which case the student must
provide the school with a written recommendation from a physician for a
leave of absence longer than 60 days.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.305 Payment of a refund to the Secretary.
(a) General. By applying for a Direct Loan, a borrower authorizes
the school to pay directly to the Secretary that portion of a refund
from the school that is allocable to the loan. A school--
(1) Shall pay that portion of the student's refund that is
allocable to a Direct Loan to the Secretary; and
(2) Shall provide simultaneous written notice to the borrower if
the school pays a refund to the Secretary on behalf of that student.
(b) Allocation of refund. In determining the portion of a student's
refund for an academic period that is allocable to a Direct Loan
received by the borrower for that academic period, the school shall
follow the procedures established in 34 CFR Part 668 for allocating a
refund that is payable.
(c) Timely payment. A school shall pay a refund that is due--
(1) Within 60 days after the student's withdrawal as determined
under Sec. 685.304(b)(1)-(3); or
(2) In the case of a student who does not return to school at the
expiration of an approved leave of absence under Sec. 685.304(c),
within 30 days after the last day of that leave of absence.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.306 Withdrawal procedure for schools participating in the
Direct Loan Program.
(a) A school participating in the Direct Loan Program may submit a
written request to the Secretary to withdraw from participation in the
Direct Loan Program explaining why it seeks to withdraw.
(b) The Secretary reviews the school's request to determine if the
school has the ability to administer the Direct Loan Program properly
and notifies the school of his decision to approve or disapprove the
request within 30 days of receiving the school's request.
(c) In reviewing a school's request, the Secretary considers
whether the reasons for the request apply only to participation in the
Direct Loan Program or to participation in either the Direct Loan
Program or the FFEL Program.
(d) If a school's request is approved by the Secretary, the
withdrawal becomes effective on the first of July following the
school's request.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.307 Remedial actions.
(a) General. The Secretary requires a school to purchase that
portion of a Direct Loan that is unenforceable, or that the borrower
was ineligible to receive. The Secretary requires the repayment of
funds and the purchase of loans if the Secretary determines that the
unenforceability of a loan or loans, or the disbursement of loan
amounts for which the borrower was ineligible resulted in whole or in
part from--
(1) The school's violation of a Federal statute or regulation; or
(2) The school's negligent or willful false certification.
(b) In requiring a school to repay funds to the Secretary or to
purchase loans from the Secretary in connection with an audit or
program review, the Secretary follows the procedures described in 34
CFR part 668, subpart H.
(c) Notwithstanding paragraph (a) of this section, the Secretary
may waive the right to require repayment of funds or purchasing of
loans by a school if, in the Secretary's judgment, the best interest of
the United States so requires.
(d) The Secretary may impose a fine or take an emergency action
against a school or limit, suspend, or terminate a school's
participation in the Direct Loan Program in accordance with 34 CFR part
668, subpart G.
(e) The Secretary may take any other action necessary to enforce
the Secretary's rights under the agreement specified in Sec. 685.300.
(Authority: 20 U.S.C. 1087a et seq.)
Sec. 685.308 Administrative and fiscal control and fund accounting
requirements for schools participating in the Direct Loan Program.
(a) General. Each school shall--
(1) Establish and maintain proper administrative and fiscal
procedures and all necessary records as set forth in the regulations in
this part and in 34 CFR part 668 in order to--
(i) Protect the rights of student and parent borrowers;
(ii) Protect the United States from unreasonable risk of loss; and
(iii) Comply with specific requirements in those regulations; and
(2) Submit all reports required by this part and 34 CFR part 668 to
the Secretary.
(b) Student status confirmation reports. A school shall--
(1) Upon receipt of a student status confirmation report from the
Secretary, complete and return that report to the Secretary within 30
days of receipt; and
(2) Unless it expects to submit its next student status
confirmation report to the Secretary within the next 60 days, notify
the Secretary within 30 days--
(i) If it discovers that a Federal Direct Stafford, Federal Direct
Unsubsidized Stafford, or Federal Direct PLUS loan has been made to or
on behalf of a student who enrolled at that school, but who has ceased
to be enrolled on at least a half-time basis;
(ii) If it discovers that a Federal Direct Stafford, Federal Direct
Unsubsidized Stafford or Federal Direct PLUS loan has been made to or
on behalf of a student who has been accepted for enrollment at that
school, but who failed to enroll on at least a half-time basis for the
period for which the loan was intended; or
(iii) If it discovers that a Federal Direct Stafford, Federal
Direct Unsubsidized Stafford, or Federal Direct PLUS loan has been made
to or on behalf of a full-time student who has ceased to be enrolled on
a full-time basis.
(c) Record retention requirements. Unless otherwise directed by the
Secretary, the school or its successors--
(1) Shall keep all records required under the regulations in this
part for five years following the last day of the borrower's attendance
at the school;
(2) Shall keep for five years after completion, copies of reports
and other forms used by the school relating to the Federal Direct
Stafford, Federal Direct Unsubsidized Stafford, or Federal Direct PLUS
programs;
(3) Shall keep all records involved in any loan, claim, or
expenditure questioned by a Federal audit until resolution of any audit
questions;
(4) Shall provide, in the event of the school's closure,
termination, suspension, or change in ownership resulting in a change
of control as described in 34 CFR part 600, for the retention of the
records and reports required by the regulations in this part and for
access by the Secretary or the Secretary's authorized representatives
to those records and reports for inspection and copying; and
(5) May keep records and copies of reports on microfilm, optical
disk, or in other machine readable format.
(d) Loan record requirements. In addition to records required by 34
CFR part 668, for each Federal Direct Stafford, Federal Direct
Unsubsidized Stafford, and Federal Direct PLUS loan received under this
part by or on behalf of its students, a school shall maintain a copy of
the loan application or data electronically submitted to the Secretary
and shall, upon request, produce a record of--
(1) The amount of the loan and the loan period;
(2) The data used to construct an individual student budget or the
school's itemized standard budget used in calculating the student's
estimated cost of attendance;
(3) The sources and amounts of financial assistance available to
the student that the school used in determining the student's estimated
financial assistance for the loan period in accordance with
Sec. 685.102;
(4) The amount of the student's tuition and fees paid for the loan
period and the date the student paid the tuition and fees;
(5) The amount and basis of its calculation of any refund paid to
or on behalf of a student;
(6) In the case of a Federal Direct Stafford loan under
Sec. 685.200, the data used to determine the student's expected family
contribution;
(7) In the case of a Federal Direct Stafford, Federal Direct
Unsubsidized Stafford, or Federal Direct PLUS loan--
(i) The date the school received a completed promissory note from
the borrower; and
(ii) The date of each disbursement of the loan.
(8) The student's job placement, if known; and
(9) Any other matter for which a record would be required for the
school to be able to document its compliance with applicable
requirements with respect to the loan.
(e) Inspection requirements. Upon request, a school or its agent
shall cooperate with an independent auditor, the Secretary, the
Department of Education Office of Inspector General, and the
Comptroller General of the United States, or their authorized
representatives, in the conduct of audits, investigations, and program
reviews authorized by law. This cooperation must include--
(1) Providing timely access for examination and copying to the
records (including computerized records) required by the applicable
regulations and to any other pertinent books, documents, papers,
computer programs, and records; and
(2) Providing reasonable access to institutional personnel
associated with the institution's administration of the Title IV, HEA
programs for the purpose of obtaining relevant information. In
providing reasonable access, the institution may not--
(i) Refuse to supply any information deemed relevant by the
Secretary;
(ii) Refuse to permit interviews with those personnel without the
presence of representatives of the institution's management; and
(iii) Refuse to permit interviews with those personnel unless they
are recorded by the institution.
(f) Information sharing. (1) Upon request of the Secretary, a
school promptly shall provide the Secretary with any information the
school has respecting the last known address, surname, employer, and
employer address of a borrower who attends or has attended the school.
(2) If the school discovers that a student who is enrolled and who
has received a Federal Direct Stafford, or Federal Direct Unsubsidized
Stafford loan has changed his or her permanent address, the school
shall notify the Secretary within 30 days thereafter.
(g)(1) Accounting requirements. A school shall establish and
maintain on a current basis financial records that reflect all
transactions for the bank account specified in paragraph (h)(1). The
school shall establish and maintain general ledger control accounts and
related subsidiary accounts that identify each program transaction and
separate those transactions from all of the school's other financial
activities.
(2) The school shall account for receiving and expending Direct
Loan Program funds in accordance with generally accepted accounting
principles.
(h)(1) Direct Loan Program bank account. The school shall establish
and maintain a bank account as trustee for the Secretary and the
borrower for Direct Loan Program funds. The school shall notify the
bank where the Direct Loan Program account is located in writing that
the Direct Loan Program account contains Federal funds. In addition,
the school must provide that the word ``Federal'' is in the name of the
school's Direct Loan Program account. If the school's accounting system
and practices meet the requirements of paragraph (g) of this section,
the school's Direct Loan Program account need not be a separate bank
account. The Secretary reserves the right to require a school to
maintain a separate account for the Direct Loan Program.
(2) Any interest earned on Direct Loan Program funds deposited in
the school's account is considered Federal funds and must be returned
to the Secretary.
(i) A school shall divide the functions of authorizing payments and
disbursing funds to borrowers so that no single office has
responsibility for both functions under the Direct Loan Program.
(j) Funds received by a school under this part may be used only to
make Direct Loan Program loans to eligible borrowers and may not be
used or hypothecated for any other purpose.
(k) The Secretary may take any action that he deems appropriate to
protect the Federal fiscal interest, including such actions as
requiring that a school that originates Direct Loans use an alternative
originator instead.
(Authority: 20 U.S.C. 1087a et seq.)
Appendix A to Part 685.--New Loan Maximums as of July 1, 1994
------------------------------------------------------------------------
Direct Loan Program and FFEL Program
-------------------------------------------------------------------------
Sub./
Unsubsidized Additional
Academic level Federal unsubsidized
Stafford eligibility
loans
------------------------------------------------------------------------
1Annual Limits
First Year Student:
Full academic year........................ $2,625 $4,000
\2/3\ academic year....................... 1,750 2,500
\1/3\ academic year....................... 875 1,500
Second Year Student
Full academic year........................ 3,500 4,000
\2/3\ academic year....................... (1) 2,500
\1/3\ academic year....................... (1) 1,500
Third Year Student and Beyond:
Full academic year........................ 5,500 5,000
Less than academic year................... Prorated Prorated
Graduate or Professional Student............ 8,500 10,000
Aggregate Limits:
Undergraduate..................................... $46,000
Graduate.......................................... 138,500
1Prorated for less than academic year.
Notes: For independent students or dependent students whose parents
cannot borrow under the PLUS program, the amount a student can borrow
under the unsubsidized loan program during any academic year is: (A)
the Stafford loan limits plus; (B) first 2 years $4,000 per year; (C)
remainder of undergraduate program $5,000 per year; (D) Graduate
$10,000 per year.
[FR Doc. 93-32065 Filed 12-30-93; 8:45 am]
BILLING CODE 4000-01-P
Complete official Federal Register PDF
FR Doc. 93-32032 Hazardous Waste Management System; Identification and Listing of Hazardous Waste; Wastes From Wood Surface Protection
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 458-469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32032]
[[Page Unknown]]
[Federal Register: January 4, 1994]
_______________________________________________________________________
Part V
Environmental Protection Agency
_______________________________________________________________________
40 CFR Parts 260 and 261
Hazardous Waste Management System; Identification and Listing of
Hazardous Waste; Wastes From Wood Surface Protection; Final Rule
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 260 and 261
[FRL-4804-9]
Hazardous Waste Management System; Identification and Listing of
Hazardous Waste; Wastes From Wood Surface Protection
AGENCY: Environmental Protection Agency.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Environmental Protection Agency (EPA) is issuing a
final hazardous waste listing determination for wastes generated from
the use of chlorophenolic formulations in wood surface protection
processes. Upon reviewing the public comments received on its proposal
of April 27, 1993, the Agency has decided not to list wastes from the
use of chlorophenolic formulations in wood surface protection
processes. As a result of this determination, EPA is not mandating in
this rule any specific operating or information collection requirements
for owners/operators of wood surface protection plants. If, however,
use of chlorophenolic formulations resumes in the future, the Agency
would very likely re-evaluate this decision not to list. This rule also
finalizes the proposed amendment of SW-846 (``Test Methods for
Evaluating Solid Waste, Physical/Chemical Methods'') to include Method
4010 (Immunoassay Test for the Presence of Pentachlorophenol). In
addition, the Agency is adding the following four chemicals to 40 CFR
part 261, Appendix VIII: Sodium and potassium salts of
pentachlorophenol and tetrachlorophenol.
EFFECTIVE DATE: January 4, 1994.
ADDRESSES: The official record for this rulemaking is identified as
Docket Number F-93-F33F-FFFFF and is located in the EPA RCRA Docket,
room M2616, 401 M Street, SW., Washington, DC 20460. The public must
make an appointment to review docket materials by calling (202) 260-
9327. The docket is open from 9 a.m. to 4 p.m., Monday through Friday,
excluding holidays. The public may copy up to 100 pages from the docket
at no cost. Additional copies cost $0.15 per page.
FOR FURTHER INFORMATION CONTACT: For general information, contact the
RCRA/Superfund Hotline at (800) 424-9346 (toll-free) or (703) 920-9810
in the Washington, DC metropolitan area. The TDD hotline number is
(800) 553-7672 or (703) 486-3323. For technical information on specific
aspects of this rulemaking, contact Mr. David J. Carver at (202) 260-
6775, Office of Solid Waste (Mailcode 5304), U.S. EPA, 401 M Street,
SW., Washington, DC 20460. For technical information relating to the
amendment of SW-846, contact Ms. Gail Hansen at (202) 260-4761, Office
of Solid Waste (Mailcode 5304), at the same address provided above.
SUPPLEMENTARY INFORMATION: The contents of today's preamble are listed
in the following outline:
I. Legal Authority
II. Background & Summary
III. Overview of the Proposed Rule
IV. Summary of Public Comments and Responses
A. General Comments
B. Comments Regarding Risk Assessment
V. Overview of the Final Rule
A. Basis for the Determination Not to List As Hazardous Wastes
From Wood Surface Protection Operations
B. Operating Requirements for Surface Protection Plants
C. Addition of Chemicals to Appendix VIII of 40 CFR part 261
VI. Amendment of SW-846 (Test Methods for Evaluating Solid Waste,
Physical/Chemical Methods)
VII. Pollution Prevention and Waste Minimization
VIII. Analysis of Potential Costs and Benefits
A. Executive Order Requirements
B. Description of Costs and Benefits of this Rule
IX. State Authority
X. Regulatory Flexibility Analysis
XI. Paperwork Reduction Act
I. Legal Authority
These regulations are being promulgated under the authority of
sections 2002(a) and 3001(b) and (e)(1) of the Solid Waste Disposal
Act, as amended, 42 U.S.C. 6912(a), 6921(b) and (e)(1), and 6922
(commonly referred to as RCRA).
II. Background & Summary
A. Background
Under section 3001(e) of RCRA, as amended by the Hazardous and
Solid Waste Amendments of 1984 (HSWA), EPA is required to make a
hazardous waste listing determination for wastes containing chlorinated
dioxins and dibenzofurans. As part of this mandate, the Agency began an
investigation in 1988 of dioxin-containing wastes from wood preserving
and wood surface protection processes. Three categories of wastes from
wood preserving processes were listed as hazardous wastes in 1990,
(F032, F034, and F035, see 55 FR 50450). A final listing determination
for wood surface protection process wastes were deferred due to lack of
data (53 FR 53282). In 1991, the Agency began a separate study of the
surface protection industry in an effort to obtain sufficient
information upon which to base a hazardous waste listing determination.
The Agency, upon obtaining and evaluating information, published a
proposed rule on April 27, 1993 which proposed a concentration-based
hazardous waste listing option and requested comment on an alternative
option not to list these wastes as hazardous (58 FR 25707). Details of
the options can be found in the following section to this preamble. A
detailed summary of all Agency actions related to wood surface
protection wastes was provided in the April 27, 1993 proposal (58 FR
25707). The reader is encouraged to consult that document for more
information on the wood surface protection rulemaking history.
In accordance with a proposed consent decree signed by EPA and the
Environmental Defense Fund (EDF) in EDF v. Browner (U.S. District Court
for the District of Columbia, case no. 89-0591), the Agency has agreed
to make a final listing determination for chlorophenolic wastes from
wood surface protection processes by December 31, 1993.
B. Summary of the Wood Surface Protection Regulation
After considerable review and study of the rulemaking docket for
this action, including comments received on the proposal, the Agency
has determined that listing as hazardous wastes from surface protection
operations is unnecessary and will not yield the benefits intended by a
hazardous waste listing under the RCRA program. This section summarizes
elements of the proposed rule of April 27, 1993 (58 FR 25707), and
details the conclusions reached in developing this final rule. The
reader is cautioned that although some of the highlights brought up in
the proposed rule are described below, the majority of information on
the industry itself as well as the detailed risk assessment on which
the initial proposed rule was based is found in the preamble and
background documents to the proposed rule. The information contained in
this final rule is primarily concerned with developments subsequent to
the proposed rule. This rule describes, in detail, the Agency's
justification for not listing wastes from surface protection processes
that use chlorophenolic formulations. In addition, it summarizes the
Agency's response to comments received on the proposal.
III. Overview of the Proposed Rule
The April 27, 1993 proposal discussed and requested comment on each
of the following:
(1) Proposing a concentration-based hazardous waste listing for
certain wood surface protection wastes,
(2) Proposing various testing, analysis, recordkeeping requirements
and management standards for wood surface protection plants,
(3) Adding six hazardous constituents to appendix VIII of 40 CFR
part 261,
(4) Amending of appendix VII of 40 CFR part 261 by adding F033 and
the hazardous constituents found in the wastes,
(5) Modifying the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) list of hazardous substances
to reflect the newly proposed listing,
(6) Amending SW-846 (``Test Methods for Evaluating Solid Waste,
Physical/Chemical Methods'') to include Method 4010 (Immunoassay Test
for the Presence of Pentachlorophenol), and
(7) An alternative option not listing chlorophenolic wastes as
hazardous.
The Agency proposed to list as hazardous at 40 CFR 261.31 only
those wastes from wood surface protection processes using a formulation
with a pentachlorophenate concentration greater than 0.1 ppm. Under
this proposed option, surface protection operations using formulations
with pentachlorophenate concentrations equal to or less than 0.1 ppm
would not generate F033 listed wastes. The Agency proposed this
concentration-based listing because it had information which suggested
that many surface protectors who previously used chlorophenolics did
not sufficiently clean out equipment prior to abandoning the use of
chlorophenolics. Because of this, many formulations from past users of
chlorophenolics exhibit ``cross-contamination,'' the contamination of
current formulations by dioxins and chlorophenolic compounds from old
formulations. The rule proposed the following hazardous waste listing
description for the F033 waste code and included the following specific
waste streams from process operations:
F033:Process residuals, wastewaters that come into contact with
protectant, discarded spent formulation, and protectant drippage
from wood surface protection processes at plants that use surface
protection chemicals having an in-process formulation concentration
of pentachlorophenate (expressed as pentachlorophenol during
analysis) exceeding 0.1 ppm. (T)
Along with this option, various testing and recordkeeping
requirements were proposed. For an owner/operator to demonstrate that
he/she is not generating F033 wastes, EPA proposed formulation testing
requirements for all surface protection plants. All owner/operators of
wood surface protection plants would be required to test their
formulation to determine the concentration of pentachlorophenate if the
owner/operators wanted to avoid generating F033 wastes. If the analysis
showed a concentration at or below 0.1 ppm, the owner/operator would be
required to sign a certification to that effect and maintain records on
site related to the testing procedure. This testing proposed an
analysis using a method listed within the EPA's Test Methods for
Evaluating Solid Waste, Physical/Chemical Methods (SW-846). The Agency
proposed to add Method 4010 to SW-846. Method 4010 is an immunoassay
test for the presence of pentachlorophenol, which determines whether a
sample is above or below a set limit (such as the 0.1 ppm concentration
level proposed).
Under the proposal, if analysis showed that a facility's
formulation contains pentachlorophenate at levels exceeding 0.1 ppm,
then the wastes generated from surface protection at that facility
would be F033 wastes and the owner/operator would be subject to
additional operating requirements proposed as subpart T of parts 264
and 265. For details on the specific operating requirements, the reader
should refer to the proposed notice (58 FR 25706).
A number of the constituents of concern that are present in wastes
generated from wood surface protection processes which use
chlorophenolic formulations do not appear on the list of hazardous
constituents at 40 CFR part 261, appendix VIII. The Agency proposed to
add six hazardous constituents to appendix VIII: sodium
pentachlorophenate, potassium pentachlorophenate, the sodium salt of
2,3,4,6-tetrachlorophenol, the potassium salt of 2,3,4,6-
tetrachlorophenol, octachlorodibenzo-p-dioxin (OCDD) and
octachlorodibenzofuran (OCDF).
Sodium and potassium pentachlorophenate are the sodium and
potassium salts of pentachlorophenol. These salts were proposed for
addition to appendix VIII of 40 CFR part 261 since, as a result of
gastric secretions following ingestion, the sodium and potassium salts
of pentachlorophenol and 2,3,4,6-tetrachlorophenol are readily
converted to the corresponding phenols by acidification. Therefore, the
sodium and potassium salts are reasonably expected to elicit the same
health effects as the corresponding phenols. For this reason, the
Agency proposed to add these four compounds to the list of hazardous
constituents in appendix VIII of 40 CFR part 261.
The Agency also requested comment on an option not to list as
hazardous wastes generated from surface protection processes. The
Agency included the so-called ``no-list'' option in the proposal
because the future generation of chlorophenolic wastes is expected to
diminish rapidly to zero and because the results of risk analyses show
that the risks from the dominant exposure pathways are relatively
modest, assuming the widespread use of chlorophenolic formulations does
not resume. The Agency believed at the time of the proposal that
reintroduction of chlorophenolic formulations into the market place in
the future was not likely to occur. EPA also noted that the Agency
would always have the option of reconsidering the listing determination
should chlorophenolic surface protection formulations be reintroduced
in the future.
IV. Summary of Public Comments and Responses
Comments received on the proposed rule are placed under two
separate headings for purposes of this summary. The first addresses the
more general comments associated with the proposal, including those
relating to: (1) General implementation issues of a listing for wastes
generated by the wood surface protection industry; (2) technical
approaches discussed in the proposal relating to data sampling
methodologies; and (3) various engineering assumptions on which the
proposed listing was based. The second part of this section describes
the Agency's response to comments dealing with the risk assessment
methodology used to support the listing determination for these wastes.
A. General Comments
Several comments were submitted on the proposed listing of F033
wastes. Four commenters supported the listing in general and two
commenters supported the concentration-based approach in particular.
Three commenters opposed the proposed listing and urged EPA to rely on
its authority under FIFRA to control the risks posed by chlorophenolic
formulations. One commenter supported an outright ban on the use of
chlorophenolics for wood surface treatment.
Two commenters warned that listing F033 wastes would hinder
remediation efforts at contaminated wood surface protection sites. The
Agency agrees with the commenters' point that a hazardous waste listing
may provide a disincentive for owner/operators of surface protection
plants to initiate voluntary remediation efforts. The regulation of
potentially large amounts of contaminated soil as listed hazardous
waste could delay the start of cleanup due to the administrative and
economic realities of regulatory compliance.
Three commenters expressed concern over the possibly perceived
interchangeability of the proposed 0.1 ppm concentration level and the
Toxicity Characteristic (TC) regulatory level for pentachlorophenol.
Although the Agency is not finalizing the F033 hazardous waste listing,
EPA nevertheless wants to make clear that the concentration level
proposed in the F033 listing description was not intended as a
regulatory level for any purpose other than defining a waste as F033.
The current regulatory level for pentachlorophenol that defines a waste
as hazardous under the TC (100 mg/L) would not have been affected by
this rulemaking in any way had the F033 listing been promulgated today.
Levels set for the TC are obtained by running models which simulate
acidic landfill conditions. For the proposed listing, the proposed 0.1
ppm level was calculated using a Maximum Contaminant Level (MCL) of
0.001 ppm and a risk analysis using the Agency's Multi-med model.
Multi-med simulates groundwater contamination from specific sources,
and for this proposal, it incorporated variables which are specific to
sawmill conditions. The Agency's analysis approximated the dilution of
pentachlorophenate from the time the waste contacts the ground to when
it reaches a ground water well. The Agency did not arrive at the 0.1
ppm level by applying a dilution attenuation factor (DAF) of 100 (as
the Agency has done in other circumstances) to the MCL. Indeed, the
Agency did not take a position in the proposal about the use of DAFs in
calculating acceptable risk levels for any constituents. A detailed
discussion of the Agency's modeling assumptions and actual parameters
used to generate risk approximations can be found in the docket for the
proposed rule.
One commenter expressed reservations regarding the decontamination
procedures promulgated previously for wood preserving equipment (55 FR
50482-50483, December 6, 1990). The Agency is aware that equipment
cleaning will not always prevent cross-contamination. However, it will
certainly reduce the amount of contamination that would occur if no
equipment cleaning took place. Although the Agency is not finalizing
the proposed F033 hazardous waste listing, EPA encourages owner/
operators of surface protection plants to clean or replace any surface-
treating equipment that was used previously with chlorophenolic
formulations upon a switch to non-chlorophenolic chemicals and properly
dispose of the wastes in an environmentally sound manner. Furthermore,
the Agency has obtained information which shows that some new
substitute products are more effective if residual chlorophenolic
contamination is removed. Hence, removing sludge and cleaning equipment
from previous chlorophenolic use will not only be more environmentally
sound, but may also enhance the new products effectiveness. Methodology
on recommended cleaning and operating practices for surface protectors
will be published in the near future by the Agency in a pollution
prevention and waste minimization guidance document.
One commenter suggested that the proposed operating standards for
surface protection plants be codified in part 262 as opposed to parts
264/265. The commenter reasoned that most surface protection plants are
only generators and do not function as treatment, storage, and disposal
facilities (TSDFs). However, since the F033 hazardous waste listing is
not being promulgated, this issue is moot and there is no need for
special generator requirements.
Several commenters had specific concerns about the applicability of
the proposed F033 listing. Since the Agency is not finalizing the
proposed F033 listing, these concerns are also moot. However, where
appropriate, answers specific to each of these comments have been
addressed in the background document of this final rule.
One commenter questioned the representativeness of the Agency's
data on cross-contamination. The commenter stated that because sites
were not randomly selected, there is no true sample representation of
the surface protector population. EPA did not choose sampling sites
based on their statistical representativeness. Rather, the sites were
selected as appropriate from what the Agency considered to be typical
operating plants. The Agency visited more than 15 surface protection
sites in the Nation (both large and small plants). From the information
obtained from these plant tours and interviews, the Agency developed a
view of what it considered typical from an engineering standpoint (e.g.
size of equipment, production scale, presence of containment systems,
size of storage yards, amount of drippage, etc). The sites sampled need
not represent the entire surface protection industry in terms of the
process used and the degree of cross-contamination present to allow the
Agency to demonstrate that wastes from current and previous use of
chlorophenolics at surface protection sites were contaminated with the
constituents of concern. These sites were chosen from information
obtained by a questionnaire sent out under the Agency's 3007 RCRA
authority.
B. Comments Regarding Risk Assessment
Five commenters responded to the risk assessment presented in the
proposed rule. One commenter stated that the EPA incorrectly converted
units of measurement in the record sampling data used for the risk
assessment causing the overestimation of incremental risk for the fish/
shellfish consumption and soil ingestion pathways by a 1,000-fold. The
EPA agrees with the commenter. The dioxin concentrations in the
formulation at one of the affected facilities (Aquasco, MD) were
reported in the wrong units, causing a 1,000-fold error to be
incorporated into the risk estimates for the fish and shellfish
ingestion and soil ingestion scenarios. When this error is corrected,
the TCDD-TEQ dioxin levels used as the source concentration (the
concentration of formulation dripping onto the ground) for affected
facilities (cross-contamination from past use of chlorophenolic
formulations) and used in the lifetime individual risk estimates for
the soil ingestion scenario and fish and shellfish ingestion scenario
were reduced by a 1,000-fold. The lifetime individual risk values using
the corrected data are presented in Table 1.
Table 1.--Individual Risk From Cross-Contamination From Past Usage of
Chlorophenolic Formulations From Fish and Shellfish Ingestion
------------------------------------------------------------------------
Recreational fishers General population
-----------------------------------------------
Population Central Central
tendency High end tendency High end
------------------------------------------------------------------------
Constituent:
2,3,4,7,8-TCDD 2E-12 3E-11 8E-13 1E-11
TEQ\1\.
------------------------------------------------------------------------
\1\Excess lifetime cancer risk.
The estimated risk to any one individual using the corrected values
are 1,000-fold lower than the risk estimated in the proposed rule from
cross-contamination due to past use. In this case for the typically
exposed individual in the general population, the incremental risk of
developing cancer is a chance of 0.8 in a trillion (8E-13); in the
recreational fisher person, the risk of developing cancer is increased
by only 2E-12. The estimated incremental population risk is also
reduced, after correction, approximately by a 1,000-fold, to 0.0002
cases/70 years for the anticipated increase in the development of
cancer as a result of exposure to ingestion of fish/shellfish
contaminated with wastes from the use of chlorophenolic formulations
for wood surface protection. Chart 1 in Section V Part A of this final
rule shows the original values reported in the April 27, 1993 proposed
notice.
The soil ingestion scenarios also were based on the storage yard
soil concentrations. The soil ingestion scenario assumed that children
ages 1 to 6 could come into contact with the contaminated soil at the
sawmill sites because sawmill sites could be converted to rural
residential land use and the child's play area could be located on the
area previously used as a storage yard area. The lifetime individual
risks, using the corrected formulation concentration values for dioxin,
associated with the soil ingestion scenario for cross-contamination
from past users of chlorophenolic formulations are presented in Table
2.
Table 2.--Individual Risk From Cross-Contamination From Past Usage of
Chlorophenolic Formulations From Direct Soil Ingestion
------------------------------------------------------------------------
Storage yard
-----------------------------
Source Central
tendency High end
------------------------------------------------------------------------
Constituent:
2,3,7,8-TCDD TEQ\1\................... 7E-10 2E-9
------------------------------------------------------------------------
\1\Upper bound excess lifetime cancer risk.
The estimates presented in Table 2 show that the incremental risks from
direct soil ingestion by children are below what the Agency considers a
level of concern. A child exposed to storage yard soils cross-
contaminated by past users of chlorophenolics under typical conditions
(consumption of 0.1 gram of soil/day for 160 days/year for six years)
would be subject to an increased cancer risk of 7E-10 over a lifetime,
or a chance of 0.7 in a billion. The estimated incremental population
risk is also reduced approximately 1,000-fold (to 4E-7 cases per year
over a 70-year period) for the anticipated increase in the development
of cancer as a result of exposure to direct ingestion of soil
contaminated with wastes from the use of cross-contaminated
formulations for wood surface protection.
One commenter remarked that the EPA failed to specifically address
the incremental risks to subsistence fisher persons from consumption of
fish/shellfish contaminated from the use of chlorophenolic formulations
for wood surface protection. EPA agrees that the risks to highly
exposed sub-populations should be considered. The fish ingestion
scenarios developed for the proposed rule considered exposure to a
general population and recreational fisher at the outflow of a drainage
area containing surface protection facilities.
EPA used the analysis for the high end recreational fisher to
approximate the risk to the subsistence fisher. Recent data show that
the high end ingestion rate for a subsistence fisher is greater than
for a recreational fisher by a factor of approximately 2. Therefore,
the incremental risk for a subsistence fisher would not exceed a level
of concern, since the projected risk to recreational fishers is much
less than 10-6.
The analysis of risks from fish consumption assumes that all fish
in the drainage basin are contaminated. The estimates of PCDDs and
PCDFs in fish tissue are based on sediment concentrations of these
constituents. The sediment concentrations are estimated based on the
erosion of contaminated soils from sawmill sites in a river or stream
basin and subsequent dilution of contaminant levels by the erosion of
uncontaminated soils from the corresponding drainage basin.
The projected risk levels increase as the size of the drainage area
decreases, due to the relatively lower amounts of uncontaminated soil
in smaller drainage basins. EPA performed an analysis which shows that,
even with all exposure parameters set at values which would maximize
the overall estimate of exposure, in order to reach a risk level of
10-6, the drainage area would need to be 8,000 hectares or less,
which is smaller than the smallest drainage area in the country. The
average drainage area is 440,000 hectares, and the lower fifth
percentile of the size distribution is 109,000 hectares.
With regard to the fish/shellfish ingestion scenario, one commenter
maintained that the fish/shellfish ingestion scenario should have been
performed on a site-specific basis (i.e. EPA should have used
parameters seen at individual sites), because not all sawmills are
located on streams with commercial fisheries. The EPA chose the fish/
shellfish ingestion scenario to be protective of the recreational
fisher persons and the general population. The risk analysis was
structured so that the hydrologic cataloguing unit (or watershed) was
the basic unit of analysis to ensure that the contaminated sediment
would be associated with a body of water large enough to support fish
hatcheries and recreational fisher persons. When these assumptions were
used in the fish/shellfish ingestion scenario using corrected values
for dioxin found in formulation for PCDDs and PCDFs, the incremental
risk to individuals with high-end exposures remains well below
1 x 10-6.
With regard to the Universal Soil Loss Equation (USLE), one
commenter asserted that the equation is overly conservative for
estimating soil erosion from surface protection sites. This equation
models the amount of soil which is dumped into a drainage area
containing fish. For a more detailed description of the model, the
reader is referred to background document of the proposed rule. The EPA
believes that, although this may be a conservative approach, it is the
best method currently available. It has been used to support other EPA
rulemakings and guidance documents. The most notable example being the
Assessment of Risks from Exposure of Humans, Terrestrial and Avian
Wildlife, and Aquatic Life to Dioxins and Furans, from Disposal and Use
of Sludge from Bleached Kraft and Sulfite Pulp and Paper Mills.\1\ Even
using these conservative assumptions, the incremental risks from cross-
contamination at these sites are not at a level of concern.
---------------------------------------------------------------------------
\1\Environmental Protection Agency, 1990. Assessment of Risks
from Exposure of Humans, Terrestrial and Avian Wildlife to Dioxins
and Furans, from Disposal and Use of Sludge from Bleached Kraft and
Sulfite Pulp and Paper Mills. Prepared for the Office of Toxic
Substances. Washington, DC by Abt Association, Inc. under contract
nos. 68-02-4283, Task 3-02, and 68-D9-0169, Task 1-15. EPA 560/5-90-
13. July, 1990.
---------------------------------------------------------------------------
One commenter suggested that the population risks attributable to
the contaminated fish/shellfish ingestion scenario were too high
because the entire U.S. population was considered to be exposed. EPA
disagrees and believes it is appropriate to consider the consumption
rate of the entire population in estimating risk to the general
population from this exposure pathway. However, an adjustment of 0.4
was made to the diet fraction to account for the fact that not all fish
are contaminated. Thus, only some percentage of the population would be
affected by the contaminated fish. As discussed in the Risk Assessment
Background Document for the proposed rule, the 0.4 diet fraction was
derived by estimating the percentage of rivers and streams (i.e.,
cataloguing units) that have at least one sawmill. A second adjustment
was made in the calculation of population risk to account for the
percentage of sawmills that operate surface protection processes (about
30% of the entire number of sawmills nationally). Population risk for
the fish/shellfish ingestion scenario has been recalculated for the
final rule using the corrected incremental storage yard soil TCDD-TEQ
concentrations. The corrected estimate of incremental population risk
from cross-contamination is three orders of magnitude lower than the
risk originally stated in the proposed rule. The corrected number of
cancer cases expected in 70 years is now 0.0002.
One commenter asserted that the soil ingestion scenario was overly
conservative because all of the soil consumption was attributed to
contaminated storage yard soil and no consumption of ``indoor dust''
was considered. EPA considered only the consumption of storage yard
soil in order to be protective of human health. The range of soil
ingestion rates for average children aged 1 through 6 is presented in
the EPA's Exposure Factors Handbook (1990) as 0.2 to 0.8 grams per day.
These estimated values were determined from the clay content of fecal
samples taken from children in this age group and thus represent
consumption of soil. However, the percent of this consumption that is
attributed to house dust is unknown, as is the contaminant
concentration in the house dust. The EPA has recalculated the soil
ingestion scenario using the corrected incremental TCDD-TEQ
concentrations obtained from the formulation sample. The incremental
risk estimated is below 1E-6, using the conservative assumptions. The
Agency's risk levels are particularly protective with the use of these
conservative assumptions, thereby further lending support to the
Agency's decision not to list these wastes.
One commenter stated that children are unlikely to consume sediment
at the same rate that they consume soil. The Agency agrees, but notes
that sediment consumption by children was not considered as an exposure
pathway in the proposed rule. The Agency does not feel that this
exposure pathway is a significant one in making a determination whether
or not to list chlorophenolic wastes since the exposure areas of
concern are relatively small and any land conversion which could take
place would most likely require soil testing prior to land development.
One commenter stated that the assumptions used to estimate the
exposed population in the soil ingestion population risk scenario
greatly overestimate the number of exposed children. EPA believes that
the scenario may be conservative, but not implausible. The scenario
assumes that all sawmill sites are converted to rural residential land
use, that the children's play areas are located on the site of the
former storage yards, and that the homes are resold to new families
with young children every 25 years. These assumptions include a low
population density in these areas. It would take only a limited number
of sites to be converted to suburban housing or to daycare or school
facilities to cause a substantial increase in the exposed population.
The incremental population risk estimated using the corrected
incremental value for the storage yard soil TCDD-TEQ concentration is
4E-7 cases in 70 years, three orders of magnitude lower than that in
the proposed rule.
One commenter maintained that the soil ingestion scenario was
questionable because Superfund liabilities, state laws, and lender
requirements make land use changes unlikely without site cleanup
activities. The EPA agrees that, in some states, land transfers and
subsequent land use changes would be unlikely to occur without cleanup.
However, not all states are equally diligent in requiring site
investigations at the time of property transfer, making the types of
land use changes described in the soil ingestion scenario plausible.
Because of this, EPA believes it is entirely appropriate to assess risk
via the soil ingestion pathway, notwithstanding any risk management
decisions that may be made at some future time to address the risk.
Two commenters believed that some of the values used as input
parameters to the ground-water model (i.e. recharge rate, regional
conductivity, and average depth to water) were too conservative and
that more appropriate input parameters should be used in this MULTIMED
model. One commenter believed that the Agency had used DRASTIC (a name
given to a modelling program used to evaluate the potential which may
exist resulting from groundwater pollution) to perform its groundwater
modeling. First, the EPA did not use the DRASTIC model in this
rulemaking effort; it used the MULTIMED model developed by the Agency
to perform groundwater models. The Agency did, however, use some soil
and hydrogeologic information (on hydrogeologic regions and subregions
collected by Aller et al. (1988)) which is used when applying the
DRASTIC model. With regard to the parameters felt by the commenter to
be too conservative, the EPA supports the values used in the proposed
rule (58 FR at 25706 of April 27, 1993). This hydrogeologic information
includes many of the input parameters required to run the MULTIMED
model, and includes such parameters as depth to water, soil type and
hydraulic conductivity, net recharge, aquifer hydraulic conductivity.
The EPA selected hydrogeologic subregions in the northwest and
southeast United States, excluding subregions where sawmills were not
likely to be sited (e.g., mountain slopes or flanks). Since the
parameter value ranges presented in Aller et al. (1988) are based on
compilations of literature values and expert opinion, the values should
be viewed as bounding ranges, and are not sufficiently statistically
rigorous to estimate true means or parameter distributions. For the
average case, ``typical'' parameter values were obtained by examining
the ranges of values in Aller et al. (1988) for the selected subregions
only and selecting values representing the central tendency of the
reported ranges. Similarly, high-end values were selected to represent
the high end of the exposure distribution, using the higher end of the
range of parameter values deemed likely to occur by Aller et al.
(1988). EPA recognizes that there are limitations to this approach,
largely associated with the non-statistical nature of the data. The
Agency believes, however, that this data source is the best available
at this time for regional and subregional estimates of the
hydrogeologic properties necessary to estimate exposures through the
ground-water pathway.
Two commenters felt that the Agency's use of input parameter values
used for well location and well intake point were too conservative. EPA
derived the horizontal distance to wells from the responses reported in
the RCRA's 3007 Industry Questionnaires. Because information was not
obtained on the well type or construction, all wells described in the
questionnaire were assumed to be possible sources of drinking water and
were assumed to be screened to the top of the aquifer, that is, well
water was assumed to be drawn off the top of the aquifer where organics
are assumed to exist in greater concentrations than when water is drawn
from the middle of the aquifer. These assumptions are consistent with
similar conservative assumptions used to develop other RCRA
regulations, such as the Toxicity Characteristic (55 FR 11798, March
29, 1990).
Two commenters contended that neither biodegradation or chemical
degradation rates were considered in the ground-water modeling of
pentachlorophenol contamination. These commenters submitted studies
showing that biological and chemical degradation of PCP can occur and
that adequate biological and chemical degradation rates are available
or can be estimated from these studies. EPA has reviewed these studies
and agrees that they do indicate that biological and chemical
degradation of PCP can occur. The information submitted by the
commenters are results from laboratory studies, reporting the results
from controlled experiments. However, EPA does not agree that there is
sufficient information on unassisted field degradation rates, the
geochemical factors that affect degradation, or their spatial
variability from site-to-site or region-to-region to model degradation
in the field at generic or prototypical sites for regulatory purposes.
Moreover, the existence of metabolites that would confirm the
occurrence of biodegradation in the field has not been firmly
established. Therefore, EPA does not believe the data warrant an
assumption that biodegradation does occur at significant rates at most
sites. In addition, the toxicities of potential degradation products
have not been characterized. Therefore, the EPA does not believe it is
appropriate to consider these mechanisms in this rulemaking.
One commenter suggested that it would be more appropriate to
calculate the average peak concentration of pentachlorophenate in
groundwater used to reflect a 9-year exposure duration by producing a
breakthrough curve of annual concentrations at a well using the
MULTIMED model and calculate a series of 9-year or 10-year moving
averages. The moving averages would be sorted in descending order and a
paper plot prepared. A preferred percentile value could then be
selected as the concentration of concern. EPA believes the current
method of calculating 10-year time-weighted averages by averaging two
5-year concentrations (including the maximum concentration and the
highest adjacent 5-year value calculated from each model run) is an
appropriate approach for estimating lifetime individual risk and the
Agency selected this approach to be conservative and protective of
human health. The 30-year exposure duration scenario uses a time-
weighted 30-year average concentration that includes the maximum
concentration. Population risk estimates aggregated over 70 years were
based on a time-weighted 70-year average concentration that includes
the maximum concentration.
One commenter believed that the source concentration used by EPA
for PCP in the ground-water ingestion scenario was too high because PCP
is no longer in use and, thus, the infiltration to ground water would
be reduced. The commenter suggested that source reduction also would
occur from erosion of surface soil containing PCP, before it is leached
and enters the ground water. EPA addressed the fact that PCP is no
longer in use at most facilities in its baseline risk estimates in the
proposed rule, which have been revised in the final rule based on
comments received to reflect source concentrations and pulse durations
(estimated time in which pentachlorophenate is expected to be present
in substitute wood surface protection product from time of changeover)
more representative of the cross-contamination scenario. While surface
runoff and erosion may reduce the amount of PCP available for leaching
to ground water, EPA has assumed, for the purpose of its analysis, that
any reductions are negligible. The EPA adopted this conservative
assumption mainly because of lack of data necessary to quantify such a
loss and its effects on ground-water concentrations. Furthermore, EPA
does not believe that surface water and erosion will significantly
reduce source leachate concentrations. As formulation drips onto the
soil it will rapidly penetrate the soil until the soil is saturated.
Subsequent rain events may wash off contaminated surface soil, but will
not erode deeper soil horizons where most of the contaminant mass
resides. Thus, EPA does not consider this assumption to be overly
conservative.
One commenter noted that the results of the ground-water analysis
were not supported by actual resource damage data. The Agency does not
expect, nor does it feel that it is needed, that ground water PCP
concentrations predicted by MULTIMED would agree precisely with the
resource damage data. The resource damage incidents presented in the
background document are intended to illustrate that ground-water
contamination from PCP does occur at sawmill facilities, and are not
intended as validation points for exposure modeling. Resource damage
data were obtained from monitoring and other wells that happened to be
in place at a facility when the sampling was conducted. There are a
number of possible reasons why sampling data from the resource damage
incidents may not reflect well-water concentrations predicted by the
model, in particular the location of the wells with regard to plume
centerline and ground-water flow direction, and the timing of peak
plume concentrations at the wells.
The latter point is especially important because, depending on
patterns of past PCP use and the well location, the peak concentration
in the plume may not have reached or may have passed the well(s)
sampled. In these resource damage cases, sufficient information was not
available to determine the placement and design of these wells with
respect to the site's hydrogeology or possible plume locations and
travel time. Thus, it is not possible to use these data points for
validation of model results. However, it should be noted that the
model-estimated ground-water PCP concentrations in the final rule are
similar to those reported from resource damage incidents. When the
revised average source concentration was used in the ground-water
model, the estimated concentrations for PCP in ground water (average =
0 .005 mg/L; high-end = 288 mg/L) are in a reasonable agreement with
the values reported in the resource damage accounts (<0.001 to 45 mg/
L).
One commenter disagreed with the use of MULTIMED in that it was not
as ``robust'' or well-tested as the Monte Carlo-based EPACML model used
for the TC rule. Another commenter recommends the use of the Monte
Carlo approach for all input parameters in the modeling effort. First,
it is important to note that the MULTIMED ground-water model is the
same model as used in EPACML except for the manner in which input
parameters are specified. EPACML can only be run in a probabilistic,
Monte Carlo mode, while MULTIMED allows Monte Carlo runs as well as for
individual input parameters to be specified and fixed. The ground-water
flow and transport model components are the same for MULTIMED and
EPACML. Second, the Agency did not pursue a probabilistic, Monte Carlo-
based approach when developing input parameters for this modeling
effort due to the fact that using this sophisticated technique requires
knowledge and proper specification of input parameter distributions,
and variable independence or proper specification of joint probability
parameter distributions. When these requirements cannot be met, the
Monte Carlo approach will not provide better estimates than a scenario-
based approach.
EPA has adopted a scenario-based regional modeling approach that
uses input parameters developed for regions of the U.S. where sawmills
are more prevalent. In this approach, EPA uses average and high-end
values for estimating model input parameters on a regional basis
because information does not exist on the actual means and
distributions of these parameters for the regions modeled. The Agency
believes that this approach is an appropriate one and, furthermore,
that the resulting model estimates bracket or bound the uncertainty
associated with the model input parameters.
Two commenters questioned the use of cancer as the endpoint of
concern for 2,3,7,8-TCDD. EPA disagrees. The cancer endpoint for TCDD
was selected because it is the most sensitive endpoint for which
qualitative dose response data are available. 2,3,7,8-TCDD has been
demonstrated to be a potent carcinogen in animals and has been
classified as a B2 (potential human) carcinogen. Recently published
epidemiological studies of occupationally exposed individuals report
significant increases in cancer mortality. 2,3,7,8-TCDD also has potent
reproductive and teratogenic endpoints and enough data exist to
estimate a reference dose (RfD) based on these alternative short-term
effects. (For a detailed discussion of this information, and for
references to studies supporting these conclusions, the reader is
referred to the background document of the proposed rule.) However, if
health-based levels (HBLs) are calculated using the reproductive effect
RfD, the exposure level is an order of magnitude higher than the level
calculated using the carcinogen slope factor (CSF). Thus, if the cancer
end-point is used as the basis for calculating a permissible exposure
level, it also will be protective against short-term exposures such as
those associated with reproductive effects.
The issue of 2,3,7,8-TCDD toxicity is being reassessed by EPA
(outside the framework of this rulemaking) and all endpoints are being
considered. TCDD has been observed to express a wide variety of effects
including teratogenesis, reproductive effects, and suppression of the
immune system function in many species. Mechanistic approaches to
understanding and identifying toxic effects levels are also being
considered. Until the reassessment process has been completed, the EPA
will continue to use the current carcinogenicity endpoint CSF value
that has been accepted as the basis for the MCL.
Two commenters noted limitations associated with the use of the
Toxicity Equivalence Factors (TEF's) methodology. They argued that the
TEF methodology should not be used to justify the addition of appendix
VIII in the absence of valid toxicological studies that demonstrate
actual health effects associated with exposure to these compounds. One
commenter questioned the proposal to add Octachlorodibenzo-p-dioxin
(OCDD) and Octachlorodibenzofuran (OCDF) to 40 CFR part 261, appendix
VIII. The commenters stated that neither compound has been shown to
produce toxic, carcinogenic, mutagenic or teratogenic effects on humans
or other life forms. The Agency has decided not to add, at this time,
OCDD and OCDF to appendix VIII of 40 CFR part 261. Although the
original basis for including these congeners on appendix VIII remains
valid (details of which can be found in the background document
supporting this final rulemaking), the Agency is investigating further
the information submitted by the commenters regarding the effects of
OCDD and OCDF reported in the Couture, Elwell, and Birnbaum study used
to support the decisions made in the ``Interim Procedures for
Estimating Risks Associated with Exposures of Mixtures of Chlorinated
Dibenzo-p-dioxins and Dibenzofurans and the 1989 Update''. OCDD and
OCDF are the most prevalent of the PCDD and PCDF congeners accounting
for approximately 85 percent of the total CDD and CDF present in five
of the six storage yard soil samples. OCDD has been shown to exhibit
``dioxin-like'' toxicity in male rats when administered in small doses
in a sub-chronic toxicity study.\2\ These findings have been confirmed
by a second sub-chronic study conducted in female rats.\3\ OCDD and
OCDF have not exhibited toxicity in short term studies; however, acute
exposure is not the only concern of EPA. The Agency is currently re-
evaluating its original assessment of risks from dioxin. At this point,
the Agency wishes to conclude its on-going reassessment before adding
OCDD and OCDF to appendix VIII of 40 CFR part 261.
---------------------------------------------------------------------------
\2\Couture, L.A., M. R. Elwell, and L. S. Birnbaum. Dioxin-like
effects observed in male rats following exposure to
octachlorodibenzo-p-dioxin (OCDD) during a 13-week study. Toxicology
and Applied Pharmacology, Vol. 93, pp 31-46, 1988.
\3\Hermelinger, N., N. Poiger, and C. Schlatter. Results of a 9-
month feeding study with OCDD and OCDF in rats, Organohalogen
Compounds, Vol. 1, 1990, pp. 221-224.
---------------------------------------------------------------------------
One commenter questioned the conclusion that soil contamination
presents no risk to wildlife. The EPA recognizes that concentrations
that are protective of human health may not necessarily always be
protective of wildlife. However, in view of the relatively small areas
occupied by sawmills and the low concentration of TCDD-TEQ in storage
yard soil from cross contamination, the EPA believes the incremental
risks to wildlife will be below a level of concern.
V. Overview of the Final Rule
This final rule makes final the Agency's hazardous waste listing
determination for chlorophenolic wastes generated at wood surface
protection plants. EPA believes that listing as hazardous
chlorophenolic wastes from surface protection operations is unnecessary
for reasons described in Part A of this preamble.
This document also amends SW-846 (Test Methods For Evaluating Solid
Waste, Physical/Chemical Methods) by adding Method 4010 (Immunoassay
Test for the Presence of Pentachlorophenol). This action is discussed
in Section VI of this preamble.
This final rule also adds four chemicals to the list of hazardous
constituents at 40 CFR part 261, appendix VIII. These four chemicals
are: (1) Sodium pentachlorophenate, (2) potassium pentachlorophenate,
(3) sodium tetrachlorophenate, and (4) potassium tetrachlorophenate. A
discussion of this action is found in part C of this section.
A. Basis for the Determination Not To List as Hazardous Wastes From
Wood Surface Protection Operations
As discussed in the proposed rule, in making a hazardous waste
listing determination, the Agency applies a ``weight-of-evidence''
approach. In doing this, the Agency examines the risks associated with
all potential human health and environmental exposure pathways,
analyzes trends in the current industry, researches past damage
incidents, as well as other factors found in 40 CFR 261.11.
Upon reviewing and responding to comments received on the proposed
rule, the Agency has decided not to list as hazardous wastes from the
use of chlorophenolic formulations in the wood surface protection
industry for several reasons.
First, chlorophenolic formulations are no longer being produced in
the United States and the Agency believes it is very unlikely they will
be produced in the future. The only remaining producer of
chlorophenolics in the U.S., Chapman Chemicals, stopped production in
January of 1992 and sometime later applied for voluntary cancellation
of its FIFRA product registration. A notice describing this action was
published in the Federal Register on June 3, 1992 (57 FR 23401), and a
final cancellation order was sent to Chapman Chemicals with an
effective date of September 14, 1992. This cancellation notice applies
to the following products produced by Chapman Chemicals: Permatox 181,
10S, and 101, and Mitrol G-ST. Any manufacturer wishing to resume
production of chlorophenolics would have to obtain a new FIFRA
registration before these chemicals could be re-introduced and made
available for use in wood surface protection. Currently, there remains
only one known user of chlorophenolics in the U.S. out of an estimated
1000 previous users and the remaining plant's existing stock is
believed to be very limited. A major element in the decision not to
list as hazardous chlorophenolic wastes generated from the surface
protection industry is the fact that use of chlorophenolic formulations
has ceased. EPA believes it is highly unlikely that a manufacturer will
seek reregistration for this product for many reasons, including the
availability of effective substitute products and the potentially high
financial and administrative burdens imposed by the FIFRA registration
process. Additional justification to support non-future production is
the fact that European countries do not want to accept dioxin-
containing wood products which have affected large export mills who
will not use chlorophenolic formulations in the future in part for this
reason. Use of chlorophenolics for surface protection has declined
steadily (even without the influence of RCRA) from over 1,000 users to
one user over the past decade. Should a new registration of this
product be sought, EPA will consider this surface protection risk
analysis for full strength application when determining whether a new
listing determination under RCRA should be initiated. Currently, the
Agency is aware of nine available substitute products currently being
used by surface protectors in place of chlorophenolics. The substitute
products are for a large part satisfactory to their users (as mentioned
on various site trips), and the Agency does not feel as though a switch
back to chlorophenolics is likely.
A second reason why the Agency has decided not to list these wastes
is because the risk to human health and the environment from on-going
operations which previously used chlorophenolics is shown to tail off
quickly because chlorophenolic concentrations diminish to a near zero
concentration within a short period of time following switchover to an
alternate product. The Agency has determined that the use of full-
strength chlorophenolic formulations generates wastes that result in
unacceptable risk to human health and the environment. As before
mentioned, should the use of chlorophenolics for surface protection
applications resume, for any reason, the Agency will most likely re-
evaluate its current position. However, dealing with the current
situation, there remains only one known user of chlorophenolics with a
limited supply remaining.
Although the Agency believes the use of full-strength
chlorophenolics will be phased out in the very near future, there was
concern at the time of proposal that there may be unacceptable risks
posed by the use of substitute products that become cross-contaminated
from previous chlorophenolic use. Particularly, the proposal cited
possible ground water risks of 2 x 10-4 for individuals and a
broad but very low potential exposure risk due to surface run-off
contributing to dioxin levels in fish. The Agency received several
comments addressing these potential impacts. In response to these
comments, the Agency conducted additional ground-water modeling using
new pulse assumptions developed from commenter-submitted information.
The Agency developed what it believed to be better pulse assumptions in
an effort to determine how long pentachlorophenate will be present in
on-going operations which have switched over from its past use. This
new data was obtained from performing mass balance iterations using
typical tank volumes found at both large and small facilities. These
mathematical calculations showed that cross-contamination from previous
use of chlorophenolics will be present in a substitute products for
only two to six years from the time a plant stops using
chlorophenolics. The Agency found that the highest estimated risk to an
individual from drinking ground water for nine years at peak
concentrations in the two- or six-year pulse resulting from cross
contamination, is significantly diminished and the broad effect on
dioxin levels in fish is reduced by several orders of magnitude. This
new analysis shows that the risks associated with cross-contamination
do not justify a hazardous waste listing to capture cross-contaminated
wastes. In the proposed rule, EPA addressed the fact that PCP is no
longer in use at most facilities in its baseline risk estimates, which
have been revised in the final rule to reflect source concentrations
and pulse durations more representative of the cross-contamination,
incremental-risk scenario. Chart 1 below compares the incremental risks
from cross-contaminated wastes as calculated for the proposed rule to
the values obtained using the new approach.
Chart 1.--Incremental Risks\1\ Due to Cross Contaminated Wastes
----------------------------------------------------------------------------------------------------------------
Significant
Constituent threat pathway Central tendency High end Population risk
----------------------------------------------------------------------------------------------------------------
Proposed in NPRM. Pentachlorophenate Ground water.... 5 x 10-7........ 2 x 10-4........ .005
(assumed 30 year
pulse).
Dioxin fish and Soil............ 18 x 10-10 4 x 10-7, rec 0.2
shellfish (general fisher.
consumption (general population).
population and
recreational fisher).
Dioxin soil ingestion Soil............ 7 x 10-7........ 2 x 10-5........ .0004
Revised.......... Pentachlorophenate (2 Ground water.... 6 x 10-7........ 2 x 10-5........ .007
year pulse, for
large facilities).
Pentachlorophenate (6 Ground water.... 2 x 10-6........ 6 x 10-5........ 0.02
year pulse, for
small facilities).
Dioxin fish & Soil............ 2 x 10-12....... 3 x 10-11....... NR
shellfish
consumption
(recreational
fisher).
Dioxin fish & Soil............ 8 x 10-13....... 1 x 10-11....... .0002
shellfish
consumption (general
pop.).
Dioxin soil ingestion Soil............ 7 x 10-10....... 2 x 10-9........ 4 x 10-7
----------------------------------------------------------------------------------------------------------------
\1\Excess lifetime cancer risk.
As shown in Chart 1, population risk is lower than that presented
in the proposal for both fish/shellfish consumption and the soil
ingestion pathway, due to a unit conversion error in expressing dioxin
concentration. The dioxin concentrations in the formulation at one of
the affected facilities (Aquasco, MD) were reported using incorrect
units, causing a 1,000-fold error to be incorporated into the risk
estimates for the fish and shellfish ingestion and soil ingestion
scenarios. When this error was corrected, the TCDD-TEQ levels used as
the source concentration for affected facilities (cross-contamination
from past use of chlorophenolic formulations) and used in the lifetime
individual risk estimates for the soil/fish and shellfish ingestion
scenarios also were reduced 1,000-fold.
The incremental population risk was revised for the ground-water
scenario from an original 0.005 value to between 0.007 and 0.02 cancer
cases. This range of 0.007 to 0.02 cancer cases was obtained because
two different modelling scenarios were run to generate the extremes of
this range. One model run used input parameters which would simulate
decay for a small production plant. The input information was obtained
from a mass balance iteration which showed that it would take a small
plant approximately 6 years to decrease cross-contamination levels to
near zero; likewise, the second model used input parameters for large
facilities which predicted a two year decline to near zero levels of
cross-contamination. The details of the mass balance approach and the
resulting change in population risk can be found in the background
document for this final rule. The Agency believes that these revised
risk levels do not warrant a hazardous waste listing.
Based on the above two main factors (i.e. (1) chlorophenolic
production stoppage and subsequent chlorophenolic use decline and (2)
revised risk due to cross contamination), the Agency looked closely at
any potential environmental benefits that may accrue from a hazardous
waste listing. Given the market trend, the Agency cannot identify any
tangible benefits to be gained from listing wastes generated from the
use of chlorophenolic formulations for wood surface protection.
Environmental damages caused by previous use of chlorophenolics have
already occurred. A listing of these wastes cannot mitigate past
damages nor can it force the clean-up of these damages. Such potential
jurisdiction exists under current programs. Authority under CERCLA and
RCRA 3007 exists even if a decision is made not to list as is the case
for this final rule.
Damage to the environment of this magnitude from previous use of
chlorophenolic formulations within this industry are not expected to
occur in the future unless use of full-strength chlorophenolics
resumes. Furthermore, sampling data collected at surface protection
sites indicate that dioxin concentrations in storage yards (the largest
area of a plant) are below 1 ppb. The heavier contamination that occurs
in the process area is confined to a small area and likely will not
migrate off-site to environmental receptors. Therefore, the Agency
finds that the risks posed by this residual contamination are limited
and that a hazardous waste listing would likely simply result in these
limited areas of contamination being left in place and not produce an
environmental benefit. Thus the effect on past contamination does not
justify a hazardous waste listing.
B. Operating Requirements for Surface Protection Plants
Because the Agency is not listing F033 wastes, the operating
standards for surface protection plants proposed in the April 27, 1993
notice are not applicable and, thus, are not being finalized.
Furthermore, surface protection plants are not required to follow any
specific waste management requirements regarding previous use of
chlorophenolics as a result of this rule.
C. Addition of Chemicals to Appendix VIII of 40 CFR Part 261
Although this final rule does not list any wastes from wood surface
protection processes as hazardous, the Agency believes that certain
constituents contained in these wastes warrant inclusion in appendix
VIII of part 261. 40 CFR 261.11 provides that ``[s]ubstances will be
listed on appendix VIII only if they have been shown in scientific
studies to have toxic, carcinogenic, mutagenic or teratogenic effects
on humans or other life forms.'' In the April 27 notice, EPA proposed
to add six hazardous constituents of concern found in surface
protection wastes to appendix VIII of 40 CFR part 261. Based on the
information gathered during this listing investigation, the following
four are being added to the list: sodium pentachlorophenate, potassium
pentachlorophenate, the sodium salt of 2,3,4,6-tetrachlorophenol, and
the potassium salt of 2,3,4,6-tetrachlorophenol. The Agency presented
information in the proposed rule and supporting background documents on
the adverse effects of these compounds. For those reasons, EPA is
finalizing the addition of four of these constituents to appendix VIII
of part 261. The Agency is not at this time finalizing the addition of
OCDD and OCDF to Appendix VIII. As mentioned before, the Agency is
investigating further the information submitted by the commenters
regarding the effects of OCDD and OCDF reported in the Couture, Elwell,
and Birnbaum study used to support the decisions made in the ``Interim
Procedures for Estimating Risks Associated with Exposures of Mixtures
of Chlorinated Dibenzo-p-dioxins and Dibenzofurans and the 1989
Update''.
VI. Amendment of SW-846 (Test Methods for Evaluating Solid Waste,
Physical/Chemical Methods)
In the notice of proposed rulemaking, the Agency proposed to add
Method 4010 (Immunoassay Test for the Presence of Pentachlorophenate)
to the Second and Third Editions of SW-846. The purpose behind this
proposal was to aid owners/operators of wood surface protection plants
with the proposed formulation testing requirement.
With respect to requiring the use of SW-846 methods for testing for
the presence of pentachlorophenate in wood surface protection ``in-
process'' formulation, the issue is moot since EPA is not listing any
wood surface protection wastes as hazardous. Nonetheless, EPA believes
that although no comments were received on Method 4010, Method 4010 is
an appropriate method, in general, for testing for the presence of
pentachlorophenate or pentachlorophenol and can, therefore, be used in
other applications other than for wood surface protection formulation
testing. The Agency is, therefore, adding Method 4010 to the Third
Edition of SW-846 as Update IIA. We are not adding Method 4010 to the
Second Edition of SW-846 since the Third Edition has replaced the
Second Edition on August 31, 1993 for use in mandatory applications (58
FR 46040). Method 4010, including its protocol and documentation
supporting this action can be found in the docket for this rulemaking.
See the ``For Further Information'' Section in front of this preamble
for the EPA contact person for further information or with questions on
Method 4010.
VII. Pollution Prevention and Waste Minimization
The Agency is preparing a separate guidance manual recommending
voluntary pollution prevention and waste minimization techniques for
the lumber industry. Since it has studied the surface protection
industry in making a listing determination for wastes generated from
the use of chlorophenolic formulations, EPA has gained a broad
perspective on the best ways to reduce wastes generated by this wood
surface protection industry. The ideas gained from the study are
presented in this manual. Some recommended strategies for pollution
prevention in the surface protection industry are described in this
section. Further information can be found in the manual.
The ultimate goal of pollution prevention is to reduce present and
future threats to human health and the environment. Pollution
prevention (also referred to as source reduction) is the use of
materials, processes, or practices that reduce or eliminate the
quantity and/or toxicity of wastes at the source of generation.
Pollution prevention is the first step in a hierarchy of options for
reducing the generation of waste. The first recommended pollution
prevention option is to replace chemical treatment with another type of
treatment to achieve surface protection. One alternate is to dry the
wood to reduce water content (high water content leads to sapstain).
The Agency is aware that this option may not be economically viable for
a smaller mill. If such a system cannot be feasibly employed, it would
be preferable for a user of chlorophenolic-containing formulations to
switch to an alternate formulation.
Other pollution prevention strategies for use within the surface
protection industry include: (1) Providing local and general
ventilation within the cutting process area to reduce dust that can
accumulate on wood; (2) blowing wood with air to reduce the amount of
sawdust on wood prior to surface protection; and (3) using drainage
collection devices like gutters on rooftops to keep precipitation away
from process wastes. The pollution prevention practices described here
can be critical to reduce the amount of waste generated. Although the
Agency is not listing these chlorophenolic wood surface protection
wastes, the pollution prevention practices described in the guidance
manual are applicable to any waste generating process. For wastes that
cannot be reduced at the source, generators may consider recycling as
the next best option.
VIII. Analysis of Potential Costs and Benefits
A. Executive Order Requirements
Executive Order 12866
Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or state, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
It has been determined that this rule is not a ``significant
regulatory action'' under the terms of Executive Order 12866 and is
therefore not subject to OMB review. Nevertheless, the Agency prepared
an abbreviated RIA or ``Economic Assessment'' (EA) in order to examine
costs and benefits likely to occur as a result of that action.
B. Description of Costs and Benefits of This Rule
Because the Agency has decided not to list wastes generated from
the use of chlorophenolic formulations in surface protection
operations, no specific action is required under this Rule. Facilities,
however, may choose to take some remedial action as a result of
publicity surrounding this action. A detailed analysis of work
performed is described in the background document for this final rule.
IX. State Authority
Under section 3006 of RCRA, EPA may authorize qualified States to
administer and enforce the RCRA program within the State. (See 40 CFR
part 271 for the standards and requirements for authorization.)
Following authorization, EPA retains enforcement authority under
sections 3007, 3008, 3013, and 7003 of RCRA, although authorized States
have primary enforcement responsibility.
Before the Hazardous and Solid Waste Amendments of 1984 (HSWA)
amended RCRA, a State with final authorization administered its
hazardous waste program entirely in lieu of the Federal program in that
State. The Federal requirements no longer applied in the authorized
State, and EPA could not issue permits for any plants located in the
State with permitting authorization. When new, more stringent Federal
requirements were promulgated or enacted, the State was obligated to
enact equivalent authority within specified time frames. New Federal
requirements did not take effect in an authorized State until the State
adopted the requirements as State law.
By contrast, under section 3006(g) of RCRA, 42 U.S.C. 6926(g), new
requirements and prohibitions imposed by the HSWA take effect in
authorized States at the same time that they take effect in non-
authorized States. EPA is directed to implement those requirements and
prohibitions in authorized States, including the issuance of permits,
until the State is granted authorization to do so. While States must
still adopt HSWA-related provisions as State law to retain final
authorization, the Federal HSWA requirements apply in authorized States
in the interim.
Although this final rule does not list, as hazardous,
chlorophenolic wastes from the wood surface protection industry, it
does add four constituents to appendix VIII of 40 CFR part 261. These
additions will not be effective in authorized States since the
requirements are not being imposed pursuant to HSWA. These requirements
will be effective only in those States that do not have final
authorization. In authorized States, these requirements will not be
applicable until the States revise their programs to adopt equivalent
requirements under State law.
Section 271.21(e)(2) of EPA's state authorization regulations (40
CFR part 271) requires that States with final authorization must modify
their programs to reflect Federal program changes and submit the
modifications to EPA for approval. The deadline by which the States
must modify their programs to adopt this proposed regulation, if it is
adopted as a final rule, will be determined by the date of promulgation
of a final rule in accordance with Sec. 271.21(e)(2). If the proposal
is adopted as a final rule, Table 1 at 40 CFR 271.1 will be amended
accordingly. Once EPA approves the modification, the State requirements
become RCRA Subtitle C requirements.
States with authorized RCRA programs already may have regulations
similar to what is being finalized in this rule. These State
regulations have not been assessed against the Federal regulations
being proposed today to determine whether they meet the tests for
authorization. Thus, a State would not be authorized to implement these
regulations as RCRA requirements until State program modifications are
submitted to EPA and approved, pursuant to 40 CFR 271.21. Of course,
States with existing regulations that are not less stringent than
current Federal regulations may continue to administer and enforce
their regulations as a matter of State law.
It should be noted that authorized States are required to modify
their programs only when EPA promulgates Federal standards that are
more stringent or broader in scope than existing Federal standards.
Section 3009 of RCRA allows States to impose standards more stringent
than those in the Federal program. For those Federal program changes
that are less stringent or reduce the scope of the Federal program,
States are not required to modify their programs. (See 40 CFR
271.1(i).) This proposed rule, if finalized, is neither less stringent
than nor a reduction in the scope of the current Federal program and,
therefore, states would be required to modify their programs to retain
authorization to implement and enforce these regulations.
X. Regulatory Flexibility Analysis
This final rule amends the hazardous waste regulations by adding
four chemicals to appendix VIII of 40 CFR part 261 and amending SW-846
by adding Method 4010. These are impacts with negligible effects to
small entities. Therefore, there is no need to consider its impacts on
small entities by preparing a Regulatory Flexibility Analysis.
XI. Paperwork Reduction Act
This rule does not contain any information collection requirements
subject to OMB review under the Paperwork Reduction Act of 1980, 44
U.S.C. 3501 et seq.
List of Subjects
40 CFR Part 260
Environmental protection, Administrative practice and procedure,
Confidential business information, Hazardous waste.
40 CFR Part 261
Hazardous materials, Waste treatment and disposal, Recycling.
Dated: December 23, 1993.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, chapter I of title 40 of
the Code of Federal Regulations is amended as follows:
PART 260--HAZARDOUS WASTE MANAGEMENT SYSTEM: GENERAL
1. The authority citation for part 260 continues to read as
follows:
Authority: 42 U.S.C. 6905, 6912(a), 6921-6927, 6930, 6934, 6935,
6937, 6938, 6939, and 6974.
2. Section 260.11 is amended by revising the ``Test Methods for
Evaluating Solid Waste, Physical/Chemical Methods'' reference in
paragraph (a) to read as follows:
Sec. 260.11 References.
(a) * * *
``Test Methods for Evaluating Solid Waste, Physical/Chemical
Methods,'' EPA Publication SW-846 (Third Edition (November, 1986), as
amended by Updates I, II and IIA). The Third Edition of SW-846 and
Updates I, II, and IIA (document number 955-001-00000-1) are available
from the Superintendent of Documents, U.S. Government Printing Office,
Washington, DC 20402, (202) 783-3238.
* * * * *
PART 261--IDENTIFICATION AND LISTING OF HAZARDOUS WASTE
3. The authority citation for part 261 continues to read as
follows:
Authority: 42 U.S.C. 6905, 6912(a), 6921, 6922, and 6938.
4. Appendix VIII of part 261 is amended by adding the following
hazardous constituents in alphabetical order by common name to read as
follows:
Appendix VIII to Part 261--Hazardous Constituents
------------------------------------------------------------------------
Chemical abstracts Chemical Hazardous
Common name name abstracts No. waste No.
------------------------------------------------------------------------
* * * * * * *
Potassium Pentachlorophenol, 7778736...... None
pentachlorophenate. potassium salt.
* * * * * * *
Sodium Pentachlorophenol, 131522....... None
pentachlorophenate. sodium salt.
* * * * * * *
2,3,4,6- same................ 53535276..... None
tetrachlorophenol,
potassium salt.
2,3,4,6- same................ 25567559..... None
tetrachlorophenol,
sodium salt.
* * * * * * *
------------------------------------------------------------------------
* * * * *
[FR Doc. 93-32032 Filed 12-30-93; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 93-31817 Food Labeling: Health Claims and Label Statements; Folate and Neural Tube Defects
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 433-437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-31817]
[[Page Unknown]]
[Federal Register: January 4, 1994]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 93N-0481]
RIN 0905-AB67
Food Labeling: Health Claims and Label Statements; Folate and
Neural Tube Defects
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is announcing that, in
accordance with the Nutrition Labeling and Education Act of 1990 (the
1990 amendments), as amended by the Dietary Supplement Act of 1992 (the
DS act), the regulation proposed on October 14, 1993 (58 FR 53254), to
authorize the use of a health claim about the relationship between
folate and the risk of neural tube defects (NTD's) is now considered a
final regulation for dietary supplements of vitamins, minerals, herbs,
and other similar nutritional substances (dietary supplements). The
proposed regulation set out the information that must be included in
such a health claim to ensure that it is an accurate representation of
the effect of intake of folic acid on the risk of NTD's, and that any
claims that are made are understandable, informative, and not
misleading.
DATES: The final regulation will become effective on July 1, 1994.
FOR FURTHER INFORMATION CONTACT: Judith W. Riggins, Office of Policy
(HF-23), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD
20857, 301-443-2831.
or
Jeanne I. Rader, Center for Food Safety and Applied Nutrition (HFS-
175), Food and Drug Administration, 200 C St. SW., Washington, DC
20204, 202-205-5375.
SUPPLEMENTARY INFORMATION:
I. Background
FDA is announcing that, in accordance with section 3(b)(1)(A)(ii),
(b)(1)(A)(x), and (b)(2) of the 1990 amendments as amended by the DS
act (Pub. L. 102-571), the regulation proposed on October 14, 1993 (58
FR 53254), to authorize the use of a health claim about the
relationship between folate and the risk of NTD's is now considered a
final regulation for dietary supplements of vitamins, minerals, herbs,
and other similar nutritional substances (dietary supplements).
II. Passage of 1990 Amendments
The 1990 amendments to the Federal Food, Drug, and Cosmetic Act
(the act) (Pub. L. 101-535) gave the Secretary of Health and Human
Services (the Secretary), and by delegation FDA, the authority to issue
regulations authorizing health claims on the labels and in the labeling
of foods. Section 403(r)(1)(B) of the act (21 U.S.C. 343(r)(1)(B))
provides that a product is misbranded if it bears a claim that
characterizes the relationship of a nutrient to a disease or health-
related condition, unless the claim is made in accordance with
procedures and standards established under section 403(r)(3) and
(r)(5)(D) of the act (21 U.S.C. 343(r)(3) and (r)(5)(D)).
The 1990 amendments also directed the Secretary to determine
through rulemaking whether claims regarding 10 nutrient-disease
relationships met the requirements of the act. The relationship of
folic acid and NTD's was among those 10 topics (section 3(b)(1)(A)(x)
of the 1990 amendments).
III. Chronology of Regulatory and Other Activities Related To
Folate and Ntd's
A. The 1991 Proposed Rule
In the Federal Register of November 27, 1991 (56 FR 60537), FDA
proposed to not authorize a health claim on folic acid and NTD's. The
agency tentatively concluded that the available evidence did not
establish that the standard that FDA had proposed for health claims for
dietary supplements under section 403(r)(5)(D) of the act was met, that
is, that there was not significant scientific agreement, based on the
totality of publicly available scientific evidence, that the claim is
valid.
B. The Public Health Service Recommendations
In September 1992, the Public Health Service (PHS) issued a
recommendation that all women of childbearing age in the United States
who are capable of becoming pregnant should consume 0.4 milligram (mg)
of folic acid/day for the purpose of reducing their risk of having a
pregnancy affected with spina bifida or other NTD's. The recommendation
was based on data suggesting that folic acid, when given at a high dose
(4 mg), can reduce the risk of recurrence of NTD's and on a synthesis
of information from studies that used multivitamins containing folic
acid at dose levels from 0 to 1,000 micrograms/day. The PHS
recommendation identified approaches and identified outstanding issues,
including the appropriate intake of folate, the potential role of other
nutrients in reduction of risk of NTD's, safety concerns, and the
``folate-preventable'' fraction of NTD's.
C. The Dietary Supplement Act of 1992
In October 1992, the DS act was enacted. This statute imposed a
moratorium on FDA's implementation of the 1990 amendments with respect
to dietary supplements until December 15, 1993. The DS act directed FDA
to issue proposed rules to implement the 1990 amendments with respect
to dietary supplements by June 15, 1993, and to issue final rules based
on these proposals by December 31, 1993. The DS act also amended the
so-called ``hammer'' provision of the 1990 amendments, section 3(b)(2)
of the 1990 amendments, to provide that if the agency did not meet the
established December 31, 1993, timeframe for issuance of final rules,
the proposed regulations would be considered final regulations.
D. The 1993 Final Rules for Health Claims for Foods in Conventional
Food Form
On January 6, 1993 (58 FR 2606), FDA published a final rule to not
authorize a health claim for folic acid and NTD's. However, the agency
reaffirmed its support of the PHS recommendation that all women of
childbearing age in the United States who are capable of becoming
pregnant should consume 0.4 mg of folic acid daily to reduce their risk
of having a pregnancy affected with spina bifida or other NTD's. The
agency noted, however, that unresolved questions about the safe use of
folate remained. The agency concluded that it could not authorize a
health claim until these questions were resolved. Because of the DS
act, FDA took no final action with respect to the use of a health claim
on folic acid and NTD's on dietary supplements.
E. The 1993 Proposal to Authorize a Health Claim on Folic Acid and
NTD's
On October 14, 1993, FDA published a proposed rule to authorize the
use of a health claim about the relationship of folate and NTD's on the
labels of foods in conventional food form and dietary supplements (58
FR 53254). FDA provided 60 days for comment on this proposed action.
The comment period closed on December 13, 1993.
Section 3(b)(2) of the 1990 amendments, as amended by section
202(a)(2)(B)(ii) of the DS act, provides that if the Secretary does not
promulgate final regulations on any of the health claims applicable to
dietary supplements in a timely manner, the proposed regulations shall
be considered final regulations but not until December 31, 1993. FDA
did not issue a final regulation on the use of a health claim on folic
acid and NTD's on dietary supplements by December 31, 1993. Therefore,
FDA is issuing this document announcing that by operation of the law,
the proposal to authorize a health claim about the relationship of
folate and NTD's published in the Federal Register of October 14, 1993,
is now considered a final regulation applicable to the labels and
labeling of dietary supplements only. The agency proposed that 21 CFR
part 101 be amended as follows:
PART 101--FOOD LABELING
2. Section 101.71 Health claims: claims not authorized is amended
by removing paragraph (c) and by redesignating paragraphs (d) through
(f) as (c) through (e), respectively.
3. New Sec. 101.79 is added to subpart E to read as follows:
Sec. 101.79 Health claims: folate and neural tube defects.
(a) Relationship between folate and neural tube defects--(1)
Definition. Neural tube defects are serious birth defects of the brain
or spinal cord that can result in infant mortality or serious
disability. The birth defects anencephaly and spina bifida are the most
common forms of neural tube defects and account for about 90 percent of
these defects. These defects result from failure of closure of the
covering of the brain or spinal cord during early embryonic
development. Because the neural tube forms and closes during early
pregnancy, the defect may occur before a woman realizes that she is
pregnant.
(2) Relationship. The available data show that diets adequate in
folate may reduce the risk of neural tube defects. The strongest
evidence for this relationship comes from an intervention study by the
Medical Research Council of the United Kingdom that showed that women
at risk of recurrence of a neural tube defect pregnancy who consumed a
supplement containing 4 milligrams (mg) (4,000 micrograms (g))
folic acid daily had a reduced risk of having a child with a neural
tube defect. (Products that contain this level of folic acid are
drugs.) In addition, based on its review of a Hungarian intervention
trial that used a multivitamin and multimineral preparation containing
800 g (0.8 mg) of folic acid, and its review of the
observational studies that reported use of multivitamins containing 0
to 1,000 g of folic acid, the Food and Drug Administration
concluded that most of these studies had results consistent with the
conclusion that folate, at levels attainable in usual diets, may reduce
the risk of neural tube defects.
(b) Significance of folate--(1) Public health concern. Neural tube
defects occur in approximately 0.6 of 1,000 live births in the United
States (i.e., about 2,500 cases among 4 million live births annually).
Neural tube defects are believed to be caused by many factors. The
single greatest risk factor for a neural tube defect-affected pregnancy
is a personal or family history of a pregnancy affected with a such a
defect. However, about 90 percent of infants with a neural tube defect
are born to women who do not have a family history of these defects.
The available evidence shows that diets adequate in folate may reduce
the risk of neural tube defects but not of other birth defects.
(2) Populations at risk. Prevalence rates for neural tube defects
have been reported to vary with a wide range of factors, including
genetics, geography, socioeconomic status, maternal birth cohort, month
of conception, race, nutrition, and maternal health, including maternal
age and reproductive history. Women with a close relative (i.e.,
sibling, niece, nephew) with a neural tube defect, those with insulin-
dependent diabetes mellitus, and women with seizure disorders who are
being treated with valproic acid or carbamazepine are at significantly
increased risk compared with women without these characteristics. Rates
for neural tube defects vary within the United States, with lower rates
observed on the west coast than on the east coast.
(3) Those who may benefit. Based on a synthesis of the results of
several observational studies, the Public Health Service has estimated
that about 50 percent of neural tube defect-affected pregnancies in the
United States (e.g., about 1,250) may be averted annually if all women
consume adequate amounts of folate daily (i.e., 0.4 mg) throughout
their childbearing years.
(c) Requirements. The label or labeling of food in conventional
food form or dietary supplements may contain a folate/neural tube
defect health claim provided that:
(1) General requirements. The health claim for a food or supplement
meets all of the general requirements of Sec. 101.14 for health claims,
except that a food or dietary supplement may qualify to bear the health
claim if it meets the definition of the term ``good source.''
(2) Specific requirements--(i) Nature of the claim--(A)
Relationship. A health claim that women who are capable of becoming
pregnant and who consume adequate amounts of folate daily during their
childbearing years may reduce their risk of having a pregnancy affected
by spina bifida or other neural tube defects may be made on the label
or labeling of foods in conventional food form or of dietary
supplements provided that:
(B) Specifying the nutrient. In specifying the nutrient, the claim
shall use the terms ``folate,'' ``folic acid,'' ``folacin,'' ``folate,
a B vitamin,'' ``folic acid, a B vitamin,'' or ``folacin, a B
vitamin.''
(C) Specifying the condition. In specifying the health-related
condition, the claim shall identify the birth defects as ``neural tube
defects,'' ``birth defects, spina bifida, or anencephaly,'' ``birth
defects of the brain or spinal cord anencephaly or spina bifida,'' or
``spina bifida or anencephaly, birth defects of the brain or spinal
cord;''
(D) Multifactorial nature. The claim shall state that neural tube
defects have many causes and shall not imply that folate intake is the
only recognized risk factor for neural tube defects.
(E) Prevalence. In specifying the prevalence of neural tube defects
among women in the general population, the claim shall state that such
birth defects ``which, while not widespread, are extremely
significant'' or ``* * * birth defects * * * that, while not
widespread, are extremely significant.''
(F) Reduction in risk. The claim shall not attribute any specific
degree of reduction in risk of neural tube defects, including mention
of the Public Health Service estimate that 50 percent of neural tube
defects may be averted annually, to maintaining an adequate folate
intake throughout the childbearing years. The claim shall state that
some women may reduce their risk of a neural tube defect pregnancy by
maintaining adequate intakes of folic acid during their childbearing
years.
(G) Safe upper limit of daily intake. Claims on fortified foods in
conventional form and on dietary supplements that contain more than 25
percent of the RDI for folate (100 g per serving or per unit)
shall state that 1 mg folate per day is the safe upper limit of intake
(e.g., ``Folate consumption should be limited to 1,000 g per
day from all sources.'')
(H) The claim. The claim shall not state that a specified amount of
folate (e.g., 400 g in a dietary supplement) is more effective
in reducing the risk of neural tube defects than a lower amount (e.g.,
100 g in a breakfast cereal or from diets rich in fruits and
vegetables).
(ii) Nature of the food--(A) Requirements. The food or supplement
shall meet or exceed the requirements for a good source of folate as
defined in Sec. 101.54;
(B) Diets adequate in folate. The claim shall identify diets
adequate in folate by using phrases such as ``* * * diets that include
2 to 4 servings per day of fruits) including citrus fruits and juices),
3 to 5 servings of vegetables (including dark green leafy vegetables
and legumes), 6 to 11 servings of enriched grain products (such as
breads, rice, and pasta) and fortified cereals. Such diets provide many
essential minerals and vitamins, including folate. Women who do not eat
well-balanced diets or who may be concerned about their diets may
choose to obtain folate from dietary supplements.''; or ``Adequate
amounts of folate, a B vitamin, can be obtained from diets rich in
fruits, including citrus fruits and juices, vegetables, including dark
green leafy vegetables and legumes, enriched grain products, including
breads, rice, and pasta, fortified cereals, or a dietary supplement.'';
or ``Adequate amounts of folate, a B vitamin, can be obtained from
diets rich in fruits, dark green leafy vegetables and legumes, enriched
grain products, fortified cereals, or from dietary supplements.''
(C) Dietary supplements. Dietary supplements shall meet the United
States Pharmacopeia (U.S.P.) standards for disintegration and
dissolution, except that if there are no applicable U.S.P. standards,
the folate in the dietary supplement shall be shown to be bioavailable
under the conditions of use stated on the product label.
(iii) Limitation. The claim shall not be made on foods in
conventional food form or dietary supplements that contain more than
100 percent of the RDI for vitamin A as retinol or preformed vitamin A
or vitamin D.
(iv) Nutrition labeling. The nutrition label shall include
information about the amount of folate in the food. This information
shall be declared after the declaration for iron if only the levels of
vitamin A, vitamin C, calcium, and iron are provided, or in accordance
with Sec. 101.9(c)(8) and (c)(9) if other optional vitamins or minerals
are declared.
(3) Optional information--(i) Risk factors. The claim may
specifically identify risk factors for neural tube defects;
(ii) Relationship between folate and neural tube defects. The claim
may include statements from paragraphs (a) and (b) of this section that
summarize the relationship between folate and neural tube defects and
the significance of the relationship except for information
specifically prohibited from the claim.
(iii) Personal history of a neural tube defect-affected pregnancy.
The claim may state that women with a history of a neural tube defect
pregnancy should consult their physicians or health care providers
before becoming pregnant.
(iv) Daily value. The claim may identify the daily value level of
400 g of folate per day as the target intake goal.
(d) Model health claims. The following are examples of model health
claims that may be used in food labeling to describe the relationship
between folate and neural tube defects:
(1) Example 1. Women who consume adequate amounts of folate, a B
vitamin, daily throughout their childbearing years may reduce their
risk of having a child with a neural tube birth defect. Such birth
defects, while not widespread, are very serious. They can have many
causes. Adequate amounts of folate can be obtained from diets rich in
fruits, dark green leafy vegetables and legumes, enriched grain
products, fortified cereals, or a supplement. Folate consumption should
be limited to 1,000 g per day from all sources.
(2) Example 2. Women who consume adequate amounts of folate daily
throughout their childbearing years may reduce their risk of having a
child with a birth defect of the brain and spinal cord. Such birth
defects, while not widespread, are very serious. They can have many
causes. Adequate amounts of folate, a B vitamin, can be obtained from
diets rich in fruits, dark green leafy vegetables and legumes, enriched
grain products, fortified cereals, or a supplement. Women who have had
a child with a spinal cord birth defect should consult a physician
before becoming pregnant. Folate consumption should be limited to 1,000
g per day from all sources.
(3) Example 3. Women who take steps to ensure that their folate
intake is adequate throughout their childbearing years may reduce their
risk of having a child with a neural tube defect. Such birth defects,
while not widespread, are very serious. They can have many causes.
Adequate amounts of folate, a B vitamin, can be obtained from diets
rich in citrus fruits and juices, dark green leafy vegetables and
legumes, enriched grain products such as breads, rice, and pasta,
fortified cereal, or a supplement. Folate consumption should be limited
to 1,000 g per day from all sources.
(4) Example 4. Women who take steps to ensure that their folate
intake is at least 400 g daily throughout their childbearing
years may reduce their risk of having a child with spina bifida or
anencephaly, birth defects of the brain or spinal cord that, while not
widespread, are very serious. These birth defects can have many causes.
Adequate amounts of folate, a B vitamin, can be obtained from diets
rich in fruits, including citrus fruits and juices, vegetables,
including dark green leafy vegetables and legumes, enriched grain
products, including breads, rice, and pasta, fortified cereals, or from
a supplement. Women who have had a pregnancy affected with a neural
tube defect should consult a physician before becoming pregnant. Folate
consumption should be limited to 1,000 g per day from all
sources.
(5) Example 5. Some women who consume the Daily Value of folate
(400 g) throughout their childbearing years may reduce their
risk of having a child affected with spina bifida or anencephaly, birth
defects of the brain or spinal cord that, while not widespread, are
very serious. These birth defects can have many causes. Women of
childbearing age should choose well-balanced diets that include 2 to 4
servings per day of fruits (including citrus fruits and juices), 3 to 5
servings of vegetables (including dark green leafy vegetables and
legumes), 6 to 11 servings of enriched grain products (such as breads,
rice, and pasta) or fortified cereals throughout their childbearing
years. Such diets provide many essential minerals and vitamins,
including folate. Women who may be concerned about their diets may
choose to obtain folate from a supplement. Folate consumption should be
limited to 1,000 g per day from all sources.
(e) Effective date. For fortified foods, this regulation is
effective on the date the food additive regulation on the use of folic
acid that was proposed on October 14, 1993, becomes effective.
The 1990 amendments state that FDA is to promptly publish notice of
the new status of the proposed regulations in the Federal Register.
This notice is issued in response to that requirement. The agency
emphasizes, however, that this regulation is deemed to be a final
regulation only with respect to dietary supplements.
The agency notes that this document is part of a separate
rulemaking contemplated by Congress if the final regulation was not
issued by December 31, 1993. This rulemaking bears a separate docket
number from the one assigned to the October 14, 1993 rulemaking to
distinguish it from that rulemaking, which is ongoing. The agency
intends to continue its rulemaking with respect to folic acid and
neural tube defects and to issue a final rule as quickly as possible.
In this regard, FDA recognizes that clarification with respect to
the legal status of claims about folic acid and NTD's on foods in
conventional food form is appropriate. FDA advises that, given the PHS
recommendation and the results of FDA's preliminary review of the
evidence on this claim, at this time it has no intention of taking
action against foods in conventional food form that are naturally high
in folate that bear a claim on this nutrient-disease relationship, so
long as the claim fully complies with the provisions of the regulation
that has become final for dietary supplements by operation of law.
However, for foods fortified with folic acid, the agency has more
significant concerns. As explained in the health claim proposal on
folic acid and NTD's (58 FR 53254 at 53288) and the proposal to amend
the food additive regulation on folic acid that published in the
Federal Register on October 14, 1993 (58 FR 53312), there appears to be
a rather narrow range of safe use of folic acid in food. Based on this
tentative view, FDA would be very concerned, at least until it reached
a final determination in those proceedings, if manufacturers began
adding folic acid to their products, or increasing the amount of folic
acid in their products, to qualify for a claim. Therefore, FDA strongly
discourages the use of a health claim about folic acid and NTD's on any
such fortified products pending the issuance of a final rule on this
nutrient-disease relationship.
As stated above, FDA intends to issue a final rule in the
proceeding on a health claim on folic acid and NTD's that it began on
October 14, 1993, in the near future. FDA is in the process of
evaluating the comments that it has received in that proceeding,
including the results of an advisory committee meeting held on October
14 and 15. FDA will attempt to resolve the issues in that ongoing
proceeding as soon as possible.
Dated: December 23, 1993.
David A. Kessler,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 93-31817 Filed 12-29-93; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 93-31815 Food Labeling; General Requirements for Health Claims for Dietary Supplements
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 395-426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-31815]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
21 CFR Parts 20 and 101
[Docket No. 85N-061D]
RIN 0905-AB67
Food Labeling; General Requirements for Health Claims for Dietary
Supplements
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
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SUMMARY: The Food and Drug Administration (FDA) is amending its food
labeling regulations to make dietary supplements of vitamins, minerals,
herbs, or other similar nutritional substances (dietary supplements)
subject to the same general requirements that apply to all other types
of food with respect to the use of health claims that characterize the
relationship of a substance to a disease or health-related condition on
the label or in labeling and the content of petitions for obtaining
authorization for such health claims. This action is being taken in
response to provisions of the Nutrition Labeling and Education Act of
1990 (the 1990 amendments) and the Dietary Supplement Act of 1992 (the
DS act) that bear on health claims.
EFFECTIVE DATE: July 5, 1994.
FOR FURTHER INFORMATION CONTACT: James R. Taylor, Jr., Center for Food
Safety and Applied Nutrition (HFS-158), Food and Drug Administration,
200 C St. SW., Washington, DC 20204, 202-205-5229.
SUPPLEMENTARY INFORMATION:
I. Background
On November 8, 1990, President Bush signed into law the 1990
amendments (Pub. L. 101-535). This new law amended the Federal Food,
Drug, and Cosmetic Act (the act) in a number of important ways. One of
the notable aspects of the 1990 amendments is their confirmation of
FDA's authority to regulate health claims on food labels and in food
labeling. The new provisions amended the act by adding a provision,
section 403(r)(1)(B) (21 U.S.C. 343(r)(1)(B)), that provides that a
product is misbranded if it bears a claim that characterizes the
relationship of a nutrient to a disease or health-related condition,
unless the claim is made in accordance with sections 403(r)(3) of the
act (which pertains to foods in conventional food form) or 403(r)(5)(D)
(which pertains to dietary supplements).
Congress enacted the health claims provisions of the 1990
amendments to help U.S. consumers maintain healthy dietary practices
and to protect these consumers from unfounded health claims. The House
Report of June 13, 1990, states, ``Health claims supported by
significant scientific agreement can reinforce the Surgeon General's
recommendations and help Americans to maintain a balanced and healthful
diet'' (Ref. 1). In addition, the statement of the House Floor Managers
noted that ``There is a great potential for defrauding consumers if
food is sold that contains inaccurate or unsupportable health claims''
(Ref. 2). The House Report characterized the need for regulation of
health claims as ``compelling'' (Ref. 1).
FDA's first step to effect the health claims provisions of the 1990
amendments appeared in the form of a November 27, 1991, proposed health
claims regulation (56 FR 60537) (hereinafter referred to as ``the
health claims proposal''). That document proposed to establish general
requirements pertaining to the use of health claims that characterize
the relationship of a food component to a disease or health-related
condition on the labels and in labeling of both foods in conventional
food form and dietary supplements. The health claims proposal contained
definitions to clarify the meaning of specific terms used in the
regulations, preliminary requirements that a component of food must
meet to be eligible to be the subject of a health claim, a scientific
standard for assessing the validity of claims, general labeling
requirements for health claims that are permitted by regulation, and
prohibitions on certain types of health claims. Also, the health claims
proposal contained provisions pertaining to the required content of
petitions for health claims.
In response to the health claims proposal, FDA received over 6,000
letters, each containing one or more comments, from consumers, health
care professionals, universities, State and local governments, foreign
governments, trade organizations, consumer advocacy organizations,
research institutes, industry, and professional organizations. Many of
the comments pertained to dietary supplements. The agency summarized
and addressed the issues raised in the comments in the final rule on
health claims that published in the Federal Register of January 6, 1993
(58 FR 2478) (hereinafter referred to as ``the health claims final
rule''). The health claims final rule became effective on May 8, 1993.
Although the health claims proposal pertained to dietary
supplements as well as foods in conventional food form, the final rule
applied only to the latter type of foods. In October of 1992, Congress
passed the DS act (Pub. L. 102-571), which imposed a moratorium on FDA
implementation of the 1990 amendments with respect to dietary
supplements until December 15, 1993. The DS act provides that by June
15, 1993, FDA was to have issued proposed rules to implement the 1990
amendments with respect to dietary supplements, and that by December
31, 1993, the agency is to issue final rules based on these proposals.
The DS act also amends the 1990 amendments to reflect the fact that if
the agency does not issue final rules with respect to health claims for
dietary supplements by December 31, 1993, the proposed regulations are
to be considered final regulations at that time.
In the Federal Register of June 18, 1993 (58 FR 33700), FDA
responded to the DS act by issuing a proposal that sets forth a
standard and procedure for making health claims for dietary supplements
(hereinafter referred to as ``the dietary supplement health claims
proposal''). In that proposal, FDA proposed to make health claims on
dietary supplements subject to the same general requirements that apply
to health claims on all other types of food.
In response to the dietary supplement health claims proposal, FDA
received over 1,200 letters, each containing one or more comments, from
consumers, health care professionals, universities, State and local
governments, trade organizations, consumer advocacy organizations,
research institutes, industry, and professional organizations. Some
comments agreed with one or more provisions of the proposed rule
without providing further grounds for support other than those provided
by FDA in the preamble to the proposal. Other comments disagreed with
one or more provisions of the proposal without providing specific
grounds for their disagreement. Many comments addressed issues that are
beyond the scope of these regulations and will not be addressed in this
document. For example, some responded to various aspects of FDA's June
18, 1993, advance notice of proposed rulemaking concerning the general
regulation of dietary supplements (58 FR 33690). Most of the comments,
however, addressed the proposed regulations and provided specific
grounds in support of their positions. The agency has summarized and
addressed the issues raised in the comments in the discussion that
follows.
II. Regulatory Approach
A. General Approach Based on FDA's Review of the 1990 Amendments
The 1990 amendments did not provide a specific standard for when a
health claim should be authorized on dietary supplements or a specific
procedure for authorizing such claims. Under section 403(r)(5)(D) of
the act, the establishment of such a standard and such a procedure is
left to the Secretary of the U.S. Department of Health and Human
Services (DHHS) (and, by delegation, FDA). Thus, in the dietary
supplement health claims proposal (58 FR 33700 at 33702), FDA reviewed
the legislative history of the 1990 amendments to identify the features
that Congress intended would guide the agency's choice of a scientific
standard and procedure for regulating health claims on dietary
supplements. FDA identified the following features that it believes
should guide its choice:
o The regulations are to deal only with the procedure and
standard for health claims for the substances in dietary
supplements. They are to have no bearing on the availability of any
dietary supplements.
o The regulations must prohibit the use of health claims that
are not authorized under their provisions.
o The regulations must ensure that any health claims that appear
in labeling are scientifically valid.
o The regulations must ensure that any health claims that appear
in labeling are understandable.
o The regulations should be such that all segments of the food
industry are treated fairly and in a consistent manner, unless there
is an appropriate basis on which to draw a distinction. This factor
embodies a principle of equity implicitly in the act.
(58 FR 33700 at 33703)
With these features in mind, FDA considered all of the approaches
of which it was aware that might be used to regulate dietary
supplements. The agency tentatively concluded that it should adopt an
approach that would subject dietary supplements to the same standard
that applies to foods in conventional food form. FDA stated that it was
its tentative view that that approach strikes the appropriate balance
between the congressional concern for consumer fraud, public health,
and sound science, on the one hand, and the desire to provide the
consumer with information on the other. Furthermore, the agency advised
that if it adopts this standard for dietary supplements, all foods will
be regulated under the same standard.
FDA pointed out that under the same procedure that applies with
respect to claims for substances in food in conventional food form,
there is a premarket review that ensures that the safety of the
substance that is to be the subject of the claim has been established
as well as the scientific validity of the claim. A claim linking a
substance to a disease, whether on a food in conventional food form or
on a dietary supplement, is intended to increase intake of that
substance. Thus, the agency said, it is important to ensure that a
claim encouraging such increased intake can be safely implemented.
Therefore, FDA proposed to adopt the same procedure for health claims
for dietary supplements as for foods in conventional food form.
1. Availability of Dietary Supplements
1. A great many comments, primarily from consumers, raised
objections that indicated that the commenters were misinformed about
the proposed regulations, or that they simply did not believe what FDA
stated in the dietary supplement proposal. Many of the comments
expressed considerable anger, resentment, and even fear over the
proposal. A large number of these comments characterized the proposal
as an attack against the dietary supplement industry. Many of these
comments stated that FDA is plotting to ban all dietary supplements. A
number of comments explained that the proposed regulations would limit
the number of dietary supplements available to consumers by limiting
the amount of health information that could appear on supplement labels
and thus diminish supplements' marketability. The comments maintained
that FDA's proposed policy of requiring premarket review of a
supplement's safety is contrary to the agency's stated intent to
preserve supplement availability and consumer choice. Some of the
comments maintained that many manufacturers would be put out of
business. Many of the comments argued that the nation's health would be
adversely affected, and that health care costs would increase without
dietary supplements to maintain good health. Some comments contained
testimonials that certain dietary supplements were responsible for
curing and preventing a variety of diseases, including cancer.
However, a few comments pointed out that assertions that FDA plans
to ban dietary supplements are unfounded. A number of these comments
predicted that the vast majority of dietary supplements will remain in
the marketplace because about 80 percent of supplement labels are
already in compliance with the proposed provisions.
There is no basis for virtually all of the concerns raised in the
comments about the availability of dietary supplements. Nothing in
these regulations will make them unavailable to consumers. These
regulations focus only on ensuring that health claims, if made on the
labels or in the labeling of dietary supplements, are scientifically
valid and understandable. Thus, the availability of dietary supplements
will not be affected by these regulations. While it is likely that some
claims may have to be removed from product labeling as a result of this
final rule, the products themselves can continue to be marketed.
It is true that prohibiting the use of claims that have not been
authorized by FDA may have an adverse impact on the marketability of
some products. However, any such impact is outweighed by the need to
assure consumers that the claims that are made in labeling are
scientifically valid, and that they can rely on such claims. In fact,
the only products whose marketability will ultimately suffer under
these regulations will be those whose labeling has borne claims that
cannot be supported by the available scientific evidence.
The requirement that the agency be confident that the presence of a
health claim will not result in unsafe intakes of the substance that is
the subject of the claim is not inconsistent with supplement
availability and consumer choice. If a manufacturer does not choose to
make a claim about a substance, nothing in these regulations will
affect the manufacturer's ability to continue to market supplements
that contain that substance. FDA believes, however, that it has an
obligation to ensure that before it authorizes a claim that encourages
consumers to increase their consumption of a substance, it have some
assurance that increased consumption of that substance will not be
harmful.
2. Fair and Consistent Treatment of All Segments of the Food Industry
2. Many comments asserted that FDA has not been evenhanded in its
approval of health claims for use on dietary supplements and on foods
in conventional food form. Some of these comments maintained that FDA's
unfair treatment of dietary supplements is evidenced by the agency's
approval of health claims involving cancer and coronary heart disease
for use on fruits, vegetables, and grain products but not for use on
fortified foods or supplements that provide fiber or antioxidant
vitamins. The comments stated that FDA should authorize health claims
involving particular nutrients for use on any food that contains those
nutrients, including dietary supplements, unless there is significant
scientific agreement that the claim is valid only when the nutrient is
consumed in a particular form. To ensure that such an approach is taken
in evaluating health claims for use on dietary supplements in the
future, a few comments requested that FDA add the following provision
to the end of Sec. 101.14(g) (21 CFR 101.14(g)):
A health claim that has been approved for any substance that is
to be consumed at other than decreased dietary levels shall be
permitted on all foods (including dietary supplements) containing
the requisite amounts of that substance, unless FDA determines that
(i) there is significant scientific agreement (as defined in
subparagraph (c)) that the consumption of the substance in the
particular food will not provide the benefits claimed, or (ii) the
food contains disqualifying amounts of another substance.
A few comments contended that FDA also has treated dietary
supplements unfairly by withholding approval of a health claim
concerning the role of folic acid in reducing the risk of neural tube
defects (NTD's) simply because of its concerns that allowing the claim
on foods in conventional food form would raise safety issues because of
overfortification of the food supply and the subsequent effect on
certain subpopulations. These comments asserted that the proper course
of action for the agency would have been to allow health claims on
dietary supplements but to prohibit their use on foods in conventional
food form until the public health concerns associated with such use had
been resolved.
However, a few comments supported FDA's decision to approve
particular health claims for use on fruits, vegetables, and fiber-
containing grains while not authorizing their use on dietary
supplements or fortified foods with added antioxidant vitamins or
fiber. These comments noted that there are many compounds in fruits and
vegetables that may be involved in reducing the risk of disease that
may not have been identified. The comments asserted that before
allowing a dietary supplement to bear a health claim authorized for use
on food in conventional food form, it is important to establish that
the supplement provides the same health protection benefits as the
conventional food.
FDA disagrees with the assertions in the comments that it has been
unfair with the dietary supplement industry with respect to its
approval of specific health claims. FDA believes that the health claims
should be consistent with the scientific evidence available to the
agency. In the Federal Register of January 6, 1993 (58 FR 2537, 2552,
and 2622), FDA explained why it was authorizing health claims
pertaining to: (1) Heart disease and diets low in saturated fat and
cholesterol and high in fruits, vegetables, and grain products that
contain fiber; (2) cancer and diets low in fat and high in fruits,
vegetables, and grain products that contain fiber; and (3) cancer and
diets low in fat and high in fruits and vegetables that may contain
fiber, vitamin A (beta-carotene) and vitamin C. The agency also
explained in detail why it was not authorizing health claims pertaining
to any specific nutrients (i.e., heart disease and dietary fiber,
cancer and dietary fiber, and cancer and antioxidant vitamins).
In the case of the antioxidant vitamins, FDA found that although
there was sufficient evidence to justify a health claim concerning the
relationship between diets low in fat and high in fruits and vegetables
that may contain fiber, vitamin A, and vitamin C and a reduced risk of
cancer, the available evidence did not provide a basis on which to
attribute the reduction in risk of disease to any individual vitamin or
combination of vitamins, regardless of whether the vitamin is
classified as an antioxidant or not (see discussion under section IV.,
58 FR 2622 at 2633). Yet, because of the usefulness of vitamins A (as
beta-carotene) and C and dietary fiber in identifying those fruits and
vegetables that correlate with reduced cancer risk, FDA identified
these nutrients as being characteristic of the foods associated with a
protective effect. Any one or a combination of these three nutrients
can serve as the identifying marker. Moreover, because fruits and
vegetables are also characterized by an absence of fat, and because of
the identified relationship of low fat diets to reduced risk of cancer,
FDA highlighted low fat intakes as part of the dietary pattern
associated with decreased cancer risk. Because the mechanism of the
protective effect of fruits and vegetables is not known, and because it
is not possible to determine which of the nutrients or other components
in fruits and vegetables is causing the observed effect, the health
claim authorized by FDA focuses on fruits and vegetables as a class of
foods and their relationship to cancer risk, and not on particular
nutrients. By requiring that all characterizing nutrients be identified
as characteristic of dietary patterns rich in fruits and vegetables
without specifically attributing reduced cancer risk to a single
nutrient or single type of nutrient (antioxidant vitamins), FDA made
the claim consistent with the scientific knowledge available to it at
the time it authorized the claim.
Because of the rapidly evolving science base relative to this
topic, however, FDA has continued to update its evaluation of the
scientific evidence and the degree of scientific agreement on the
relationship between antioxidant vitamins and cancer. As part of these
efforts, FDA initiated, along with other major research and health
organizations as cosponsors, a public conference on antioxidant
vitamins and cancer and cardiovascular disease that was held on
November 1 through 3, 1993. The transcript of that meeting has been
submitted to the Docket as a comment on the antioxidant vitamins and
cancer rulemaking, along with other comments received in response to
the announcement of the conference (58 FR 54595, October 22, 1993). FDA
is reviewing the results of this conference and other scientific
evidence that has become publicly available since the publication of
the January 6, 1993, final rule on antioxidant vitamins and cancer.
Similarly, in the case of heart disease and dietary fiber and of
cancer and dietary fiber, the agency found that there was insufficient
evidence to attribute the reduction in risk specifically to dietary
fiber or to specific fiber components. The agency did conclude,
however, that dietary fiber and soluble fiber, along with other
nutrients, serve as useful markers in identifying those foods for which
the scientific evidence showed that inclusion in a daily diet was
associated with reduced risk of cancer and of heart disease (58 FR 2552
and 58 FR 2537).
For both topic areas, the agency also noted the inability of
commonly used analytical methodologies to detect many of the
characteristics that vary among dietary fibers and that may be related
to biological function (e.g., particle size, chemical composition,
water-holding capacity). With regard to heart disease, other components
variable associated with soluble fiber in foods (e.g., lipid
components) may also contribute to a cholesterol-lowering effect. FDA
found that the inability to detect many of the differences among
fibers, fiber components, and other substances in foods that contain
dietary fibers, including soluble fiber, and the general lack of
conclusions as to the mechanism of action of dietary fibers and fiber
components were limiting factors on FDA's ability to draw conclusions
from the available evidence. Furthermore, FDA noted that foods high in
dietary fiber are also generally low in calories and total fat, factors
that are associated with reduced risk of cancer. Fiber-rich foods are
also generally low in saturated fats and cholesterol, substances that
also affect the risk of developing heart disease. Thus, some or all of
the benefits associated with diets high in fiber-rich foods could be
the result of displacement of fat and saturated fat from the total diet
rather than an effect of fiber per se.
The agency stated that although the specific roles of the numerous
potentially protective substances or displacement of negative
substances (e.g., fat, saturated fat, and cholesterol) in such plant
foods are not yet understood, populations with diets rich in these
foods experience many health advantages, including lower rates of heart
disease and cancer. Thus, FDA did not authorize the use of a health
claim on the association between ingestion of dietary fiber, or
specific fiber components, and a reduced risk of heart disease or
cancer. Instead, for cancer, FDA, to be consistent with the available
scientific evidence and prevailing scientific agreement, focused on
fiber-containing grain products, fruits, and vegetables as product
classes. Similarly, for heart disease, FDA focused on fruits,
vegetables, and grain products that contain fiber, particularly soluble
fiber. Because of the usefulness of dietary fiber or soluble fiber in
identifying the types of foods whose consumption is most likely to
correlate with decreased cancer or heart disease risk, these substances
can serve as identifying markers for selecting useful foods, even in
the absence of adequate evidence of a direct effect of fiber.
FDA is aware, however, of the rapidly evolving nature of the
science base relative to these topic areas. FDA intends to update its
review of the science by initiating, in the near future, along with
other major research and health organizations as cosponsors, a public
symposium on dietary fiber and heart disease and cancer.
With respect to assertions concerning folic acid, FDA disagrees
that it should have allowed health claims on dietary supplements while
prohibiting their use on foods in conventional food form. While FDA did
not authorize a health claim for folic acid and NTD's, in the final
rule on heath claims and label statements for folic acid and NTD's
published in the Federal Register of January 6, 1993 (58 FR 2606)
(hereinafter referred to as ``the folic acid final rule''), the agency
did announce its plans to work expeditiously to authorize a claim, if
appropriate.
The agency noted that the Public Health Service (PHS), including
FDA, had recommended (Ref. 7) that all women of childbearing age in the
United States should consume 0.4 milligram (mg) (400 micrograms
(g)) of folic acid daily to reduce their risk of having a
pregnancy affected with spina bifida or other neural tube defects. FDA
acknowledges that this recommendation evidenced that significant
scientific agreement existed regarding a relationship between folate
and NTD's but said that there were factors that prevented FDA from
authorizing a claim. The agency said that the act must be read as a
whole, and that sections 403(r)(3)(A)(ii) and 409 of the act (21 U.S.C.
348) reflect the proposition that the use of a substance that is the
subject of a health claim must be safe. The agency pointed out that the
PHS recommendation stated that there were significant questions that
persist about the safe use of folic acid in food. As stated in the
folic acid final rule, FDA expected that the authorization of a claim
would likely result in significant increases in consumption of folic
acid by women in their childbearing years and by the general
population, because manufacturers would add folic acid to their
products in order to claim that these products were useful in reducing
the risk of birth defects. Intakes of multiple doses of folic acid from
supplements and from its increased presence in the food supply could
rapidly result in intakes of 3 to 7 mg (3,000 to 7,000 g) per
day (58 FR 2606 at 2614). Such intakes represent increases of 10-fold
or more above current intakes.
In the folic acid final rule, the agency reviewed the safety
considerations raised by such increases in folic acid intakes,
including: (1) Potential effects in persons with poor vitamin B12
status; (2) potential risks for persons taking medications that
interfere with folate metabolism; (3) potential risks for pregnant
women because of uncertainties about effects of high blood levels of
folic acid on the embryo during gestation; and (4) uncertainties
regarding possible interactions between folic acid and other nutrients
with increased folic acid intakes. The agency concluded that it could
not authorize a health claim on folic acid until the questions
regarding the safe use of this nutrient were satisfactorily resolved.
In the folic acid final rule the agency described the efforts it was
undertaking to address and resolve these concerns.
Following publication of this document, based on its review of the
evidence, its discussions with an advisory committee, and its review of
the comments that it received, the agency tentatively concluded that
the safety problems raised by folic acid can be resolved by setting a
safe upper limit of intake of 1 mg folate per day for all population
groups. The agency announced its tentative conclusion in a proposal to
authorize a health claim on folate and neural tube defects (58 FR
53254, October 14, 1993). In companion documents, FDA also proposed to
amend the food additive regulation for folic acid to specify the foods
that could be fortified with folic acid and the level at which they
could be fortified (58 FR 53312) and to amend the standards of identity
for specific cereal-grain products to permit the addition of folic acid
(58 FR 53305).
Thus, based on this review of the agency's actions, it is clear
that the nondiscriminatory provision suggested in the comments is not
necessary. When FDA has concluded that a substance has a relationship
to a disease, FDA has acted to authorize a claim (see final rule on
calcium and osteoporosis (58 FR 2665) and the proposed rule on folic
acid and neural tube defects (58 FR 53254)). In the case of antioxidant
vitamins and cancer, dietary fiber and heart disease, and dietary fiber
and cancer, the evidence did not establish that the named substances
had an effect on the named diseases. The evidence showed that these
nutrients were merely markers of foods that had been shown in studies
to affect the risk of the disease. FDA has reflected the scientific
evidence in the claims that it has authorized and proposed to
authorize. Any other course of action would be inconsistent with the
act because it would result in claims that were both not scientifically
valid and misleading.
B. Alternative Approaches
In the dietary supplement health claims proposal (58 FR 33700 at
33703), FDA advised that a variety of approaches had come to FDA's
attention about how health claims for dietary supplements would best be
regulated under the 1990 amendments. These approaches came to the
agency's attention by various means, including the comments on the
health claims proposal that addressed the most appropriate method for
regulating dietary supplements, testimony before Congress about
implementation of the 1990 amendments, as well as the legislative
history of the 1990 amendments. FDA carefully evaluated each of these
approaches to determine how they compare with the characteristics that
FDA has listed above. A number of comments addressed the agency's
tentative conclusions about these approaches.
1. Use of Advisory Committees
In the dietary supplement health claims proposal (see section
II.B.1., 58 FR 33700 at 33704), FDA advised that it had tentatively
decided not to adopt a committee-based approach suggested in comments
for evaluating the validity of health claims on herbs. This approach,
known as the Botanical Ingredient Review (BIR), would involve the
establishment of expert panels under the direction of an oversight
committee. FDA would participate as a nonvoting member of the expert
panels. The oversight committee, which would be charged with the
responsibility of reviewing all health claim petitions pertaining to
herb or botanical components, would relieve FDA of all responsibility
for initial review of these petitions. Each expert panel would conduct
an evaluation of scientific data pertaining to the requested claim,
subject the evaluation to peer review, and prepare a final
recommendation about the claim. The recommendation and all supporting
documents would then be forwarded to FDA, and the agency would be
permitted 120 days to approve, disapprove, or modify the report. Under
draft regulations prepared and submitted for FDA adoption by one
comment on the health claims proposal, there would be a codified
presumption in favor of the committee recommendation.
The agency based its tentative decision about the BIR on its belief
that the suggested approach would involve a significant transfer of
agency authority on health claims because of this presumption in the
draft regulations submitted by the comment. Under this presumption, FDA
would be obligated to prove that the committee was wrong if the agency
decided not to follow the committee's recommendation. In such
circumstances, FDA could be forced to propose to authorize health
claims that it was not satisfied were scientifically valid. FDA noted
that there is no basis under the act for such a transfer. Also, the
agency noted that the creation of such a committee would be financially
burdensome and stated that it would be inappropriate to commit its
limited resources to a committee with as narrow a scope as that
suggested by the comment.
3. A few comments addressed this advisory committee issue. Some
comments voiced opposition to FDA's tentative decision not to establish
a BIR. These comments disputed the agency's assertion that the
establishment of a BIR would involve any transfer of authority, noting
that FDA would retain full and final discretion in approving health
claims. The comments also disputed FDA's finding that the creation of a
BIR would be burdensome and costly in light of the agency's limited
resources. The comments stated that such a finding is inconsistent with
FDA's current use of advisory committees for very narrow subject
matters such as over-the-counter (OTC) antiplaque products, circulatory
system medical devices, and drug abuse. The comments stated that the
use of a BIR to help screen petitions from the much larger herbal
products industry would be an efficient, economical, and scientifically
credible way to ration FDA's scarce resources and would also help FDA
meet statutorily-imposed deadlines for actions on petitions that it
might not otherwise be able to meet.
The comments also asserted that the agency's statement that it has
the ``ultimate responsibility to determine whether the petitioned-for
health claim is valid'' implies a mistrust of the integrity of the BIR
process and the involved scientists and reveals an agency belief that
it is the only authority competent to judge the scientific validity of
health claims for herbal dietary supplements. The comments disagreed
with such a conclusion and argued that health claim petitions will only
receive adequate and full consideration from the scientific community
best qualified to determine whether they meet the significant
scientific agreement standard set by Congress through the creation of a
BIR, which would represent the most competent and knowledgeable body in
a field that remains largely esoteric to FDA. One of these comments
suggested that appropriate selections for herbal experts panels might
include experienced herbal practitioners who are familiar with
potential adverse reactions to herbs as well as medical practitioners
in foreign countries where herb safety has been studied by government
and industry panels. The comment stated that the inclusion of foreign
medical practitioners would be especially appropriate during the
evaluation of a claim whose merits are agreed upon throughout the world
but are not generally recognized in the United States, such as in the
case of using peppermint tea for its soothing or carminative effects on
the digestive tract.
However, one comment supported the agency's tentative decision not
to adopt the BIR process. The comment stated that FDA could well be
legally liable for decisions made by the BIR that were later shown to
have placed the public health at risk.
Several comments called for FDA to establish an advisory committee
for health claims for dietary supplements where the committee would
select expert panels responsible for the evaluation of proposed health
claims for all dietary supplements. The comments suggested that the
expert panels should be composed of scientists and health care
professionals with expertise on a given nutrient-disease relationship
as well as nonvoting industry and consumer representatives. These
comments contended that one reason for the agency's slowness in
approving a health claim for folic acid has been its reliance on
advisory panels that were not sufficiently familiar with the research
in the area and who had to be educated about the strength of the
evidence before they could act. Some of these comments suggested that
FDA could retain the authority to reject the recommendations of the
committee, as long as it published its reasons for doing so.
Another comment stated that both the dietary supplement industry
and FDA have been slow to recognize and utilize a great deal of
research that has been done in the area of nutrition and health. The
comment attributed this slowness to a gap between the scientific
community, FDA, and the dietary supplement industry. The comment
suggested that in order to close this gap, FDA should form a committee
of its leading scientists to meet with a similar industry committee
every 3 to 6 months, or as required, to discuss the latest research in
the area of nutrition and health published in highly accredited
scientific journals so that the research could be used to create and
support health claim petitions. The comment suggested that when the
agency committee and the industry reach an agreement on the data, FDA
could authorize the use of a health claim on the nutrient-disease
relationship on which there is agreement.
FDA recognizes that advisory committees may make valuable
contributions in assisting the agency to evaluate scientific evidence
about health claims in certain circumstances. For example, the Folic
Acid Subcommittee of the Food Advisory Committee provided valuable
recommendations in support of FDA proposing to authorize a health claim
for folic acid and proposing to fortify cereal-grain products. The
agency intends to continue its use of advisory committees wherever the
need arises.
FDA believes, however, that it should retain the right to decide
when the use of an advisory committee is necessary. There may
frequently be circumstances in which evidence establishes that use of
advisory committees is not necessary because the evidence shows that
the claim is clearly supported or clearly not supported. In addition,
if the agency were to establish a standing advisory committee for
health claims, FDA would want it to have a broader focus than just
dietary supplements. FDA's view is that claims should focus on the
substance, and not the food in which it is found, because the primary
issue is whether the substance-disease relationship has been
established. Thus, if FDA were to establish a standing advisory
committee, it would be on health claims in general. Although a number
of comments asserted that FDA lacks knowledge of herbal products, the
agency believes that its personnel are fully competent to evaluate
properly substantiated petitions concerning health claims in this area.
Also, if the agency were to decide to establish an advisory committee,
it would take steps to ensure that the membership of the committee had
the necessary expertise, including pertinent expertise on herbal
products.
There is an implication in some of the comments that the evaluation
of the scientific evidence supporting a claim is somehow different
depending on the substance involved. In fact, whether a claim is for a
vitamin, mineral, herb, or other similar nutritional substance,
including fat, saturated fat, and cholesterol, the skills needed for
evaluation of a claim are basically the same. These skills are found in
epidemiologists, nutritionists, biostatisticians, clinicians, and
experts in the disease being addressed, as well as in people aware of
how the substance is, or should be, consumed. Thus, FDA does not agree
with the implication in these comments.
FDA is interested in having communication with the dietary
supplement industry. However, the agency does not believe that it would
be appropriate for the communication to take the form of the suggested
standing committee to meet with a similar industry committee every 3 to
6 months. While FDA believes that regular communication with the
dietary supplement industry is likely to be useful, the process by
which health claims are authorized must be a more open and public
process than that suggested by the comment. Certainly the 1990
amendments envisioned a public process for claims for substances in
foods in conventional food form, as reflected in section 403(r)(4) of
the act. FDA has been presented with no convincing reason why a similar
process should not apply to claims for substances in dietary
supplements.
Furthermore, FDA continues to believe that the BIR advisory
committee approach would involve a significant transfer of agency
authority for health claims, even though comments on the health claims
proposal and the dietary supplement health claims proposal have made
arguments to the contrary. The suggested regulation for health claims
that was submitted to FDA on May 10, 1991, and referred to by the
agency in the proposals that it has issued, states in part:
B. If the Committee determines that a proposed health claim is
appropriate for a particular herb or botanical, either as proposed or
as modified by the Committee, it shall forward its recommendation(s) to
FDA together with all the data and other information before the
Committee when it made its decision.
C. If the Committee determines that, on the basis of the data, and
other information before it, the proposed health claim is not
scientifically justified for the herb or botanical, it shall so notify
the proposer. The proposer may then direct the Committee to forward to
FDA all the information before the Committee with respect to the
proposal together with its conclusions and the reasons therefore.
D. Within 120 days of receipt of the information described in (B)
and (C) above, FDA shall either accept the recommendation, reject it,
or modify it based upon the Agency's independent evaluation with
analysis and reasons for rejection or modification of recommended
health claims. In arriving at its decision FDA may consider data or
information other than that before the Committee. There shall be a
presumption, to be sustained when the record is viewed as a whole, in
favor of a Committee recommendation under either (B) or (C). (Emphasis
added.)
Despite assertions to the contrary, the last sentence of paragraph
``D'' obligates FDA to establish that the committee was wrong in order
not to follow the committee's recommendation. Ultimately, therefore,
there would, in fact, be a significant transfer of authority if the
suggested provision were to be adopted by FDA. As FDA noted in the
dietary supplement health claims proposal (58 FR 33700 at 33704), there
is no basis under the act for such a transfer of authority.
FDA does not question that experts on an industry committee or
panel on herbs and botanicals could be helpful. The agency encourages
firms to work through such groups. For this reason, FDA revised the
provision pertaining to petitions in the health claims final rule to
clarify that the agency will consider all recommendations by such
committees and panels (see Sec. 101.70(b)). FDA recognizes that those
petitions that have undergone an independent scientific review and
received endorsement by qualified expert groups will likely be well-
supported petitions and could be very persuasive to FDA. Further, FDA
is likely to place considerable weight on the recommendations of
outside experts, and its decision as to whether a petition should be
granted could be influenced significantly by these experts.
Although FDA encourages firms to work through groups of outside
experts, the agency would be concerned if such groups were heavily
weighted with medical practitioners as one of the comments suggested.
Over reliance on such practitioners, to the exclusion of scientists
representing other relevant scientific descriptives, implies that the
herbs are to be used for medicinal purposes. FDA stresses again that
health claims are about the relationship of foods, rather than drugs,
to a disease or health-related condition.
2. Establishment of an Approach Based on a More Lenient or the Same
Standard
FDA proposed to subject dietary supplements to the same scientific
standard and procedure that the statute provides for foods in
conventional food form (section 403(r)(3)(B)(i) of the act). The
standard, codified in Sec. 101.14(c), states:
(c) Validity requirement. FDA will promulgate regulations
authorizing a health claim only when it determines, based on the
totality of publicly available scientific evidence (including
evidence from well-designed studies conducted in a manner which is
consistent with generally recognized scientific procedures and
principles), that there is significant scientific agreement, among
experts qualified by scientific training and experience to evaluate
such claims, that the claim is supported by such evidence.
FDA explained in the dietary supplement health claims proposal (58
FR 33700 at 33705) that it knows of no standard and procedure for
dietary supplements that would both be more lenient than the standard
and procedure for foods in conventional food form and yet still have
the characteristics that FDA considers necessary under the 1990
amendments and their legislative history. The agency stated that it had
tentatively concluded that a standard for health claims for dietary
supplements that is based only on section 403(a)(1) of the act (21
U.S.C 343(a)(1)), or that allows health claims based on the existence
of substantial scientific evidence, even though significant scientific
agreement about the validity of the claim does not exist, would be
inconsistent with Congress's desire to ensure that health claims that
are made on food, including dietary supplements, are scientifically
valid. FDA said that it was concerned that if it were to allow claims
in the marketplace whose validity had not been established, these
claims would undercut the credibility of those health claims that are
in fact valid. The agency said that if it were to allow such claims,
consumers would be left little better off, and no less confused, than
they were in 1989, before the passage of the 1990 amendments. FDA also
expressed its tentative view that the proposed approach strikes the
appropriate balance between the congressional concern for consumer
fraud, public health, and sound science, on the one hand, and the
desire to provide the consumer with information on the other (58 FR
33700 at 33706).
4. A large number of comments asserted that FDA should establish an
approach based on a more lenient standard for dietary supplements. Some
of these comments argued that such an approach is directed by Congress
and cited a statement of Senator Hatch, one of the primary authors of
the 1990 amendments, that ``a more lenient standard for dietary
supplement[s] is envisioned.'' One comment argued that by providing for
the establishment of a separate standard for dietary supplements,
Congress had implicitly rejected the rigid standard of ``significant
scientific agreement'' adopted for foods in conventional food form. The
comment asserted that FDA was therefore bound by basic tenets of
statutory construction to adopt a more lenient standard for dietary
supplements, as such an action would give meaning to Congress's
instructions, whereas the adoption of the proposed standard would in
effect render those instructions meaningless. The comment noted that
courts have traditionally not interpreted provisions of a statute in
ways that would render other provisions superfluous.
A number of comments stated that using the same standard and
procedure for dietary supplements as for foods in conventional food
form is counter to the intent of the 1990 amendments because Congress
intended to make more, rather than less, information about the health
benefits of dietary supplements available to consumers. The comments
asserted that health information about the effects of diet on disease
is particularly important to consumers of dietary supplements in
deciding which products to buy.
Several comments argued that restricting this information on
dietary supplements will deny millions of Americans the information
that they need to improve their health and to help reduce their risk of
deadly afflictions such as heart disease and cancer. The comments
asserted that such restriction will cost the nation millions of dollars
in health care expenditures that could have been saved through disease
prevention.
Some comments expressed concern that restricting the use of
properly qualified health claims based on preliminary evidence would
encourage information-hungry consumers to seek information about the
health benefits of various dietary supplements from sources such as
books and the media, which may be unreliable and which are not
regulated by FDA. These comments argued that adopting a policy that
results in consumers turning to information that may well be misleading
or outright false is contrary to the educational goals of the 1990
amendments. One comment stressed that FDA should assist consumers by
encouraging them to reduce their risk of disease by changing their
diets, lifestyle, and other factors.
Comments suggested that FDA should place more weight on the
potential benefits of the health information than on eliminating all
possibility for consumer misunderstanding or all elements of risk
associated with increased consumption of dietary supplements. A few of
these comments advised that a more lenient standard would be
appropriate for dietary supplements because they are being sold to
educated consumers rather than to the general population. Some of these
comments disputed the argument that consumers could be misled by a more
lenient standard. These comments noted that consumers continue to rely
on health messages on products such as cigarettes and condoms, despite
the fact that the messages have changed over the years in response to
new scientific findings. Other comments stated that studies have
indicated that consumers are able to use various advertising claims
about diet and disease in a rational and beneficial manner.
Several comments asserted that FDA should allow the use of
preliminary health claims on dietary supplements and foods in
conventional food form because it allows their use on drugs. The
comments stated that FDA's proposed revision of the``Pediatric Use''
subsection of prescription drug labeling in the Federal Register of
October 16, 1992 (57 FR 47423) would allow prescription drugs that had
not been tested for safety and efficacy in children to nevertheless be
given to children provided that the drugs' efficacy claims were
qualified by the statement, ``Safety and effectiveness in children have
not been established.'' The comments stated that because these drugs
had not been tested for safety and efficacy in children, their claims
would be ``preliminary'' at best and misbranding at worst.
However, many comments argued against a more lenient standard and
procedure for dietary supplements. Several comments stressed that the
adoption of the proposed standard and procedure is supported by the
legislative histories of the 1990 amendments and the DS act. One of
these comments maintained that while the 1990 amendments give FDA the
option of adopting a more lenient standard for dietary supplements, the
Congressional Record denotes a majority opinion in favor of FDA
applying the same standard to supplements that the act provides for
conventional foods.
A number of comments also warned FDA that holding dietary
supplements and foods in conventional food form to different standards
for health claims would lead to consumer confusion, as the health
benefits of nutrients derived from dietary supplements would be allowed
to be characterized as superior to the benefits of those same nutrients
derived from foods in conventional food form. Some comments asserted
that the creation of public confusion would directly undermine the
intent of the 1990 amendments to clear up consumer confusion about
health claim information and would jeopardize consumer confidence in
existing health claims, food labels, and the government, particularly
public health officials. Another comment asserted that adopting a more
lenient standard for dietary supplements could also allow some
supplement manufacturers to make unsubstantiated claims and undercut
consumer belief in the credibility of the entire supplement industry.
These comments asserted that a single universal standard would best
prevent consumer confusion by ensuring that health claim information is
uniform on all foods.
Several comments supported the same standard and procedure on the
grounds that it would ensure that health claims appearing on the labels
of dietary supplements are based on reliable, peer-reviewed,
reproducible evidence. A number of these comments stated that because
supplements, unlike conventional foods, are taken specifically for the
health benefits associated with them, it is especially important that
health claims on these products be reliable because more and more
consumers are using these products in the belief that the products will
protect their health. The comments said that these consumers were
responding to the large amounts of recent evidence indicating that
vitamins, minerals, and other nutrients may play a role in reducing the
risk of chronic diseases.
Some comments cautioned FDA that the failure to ensure that health
claims on dietary supplements are reliable would leave consumers open
to fraud. A few of these comments pointed out that many consumers do
not have the scientific knowledge to judge the veracity of label claims
for themselves and presume that FDA regulations ensure that label
claims are properly substantiated. One of these comments warned that
older Americans are especially vulnerable to fraud. This comment
pointed out that the elderly suffer disproportionally from diet-related
diseases, read supplement labels more often than other people, are more
trusting of salespersons, and do less research than younger consumers.
Other comments warned that unsubstantiated health claims can harm
consumers by inducing them to consume products that are inherently
unsafe, to consume excessive doses of some substances, or to forego
more beneficial forms of treatment for a given malady.
A number of comments insisted that the proposed regulations will
not restrict the flow of information on nutrition and health to
consumers. One of these comments stated that roughly 80 percent of
supplement labels are already in compliance with the proposed
regulations. Other comments noted that educational materials are not
covered by the proposed regulations, and that there are many available
channels through which information can be freely disseminated other
than food labeling. Moreover, one comment contended that supplement
labels are neither intended, nor currently used, to educate the public
but instead serve to sell the product to which they are attached.
Some comments stated that applying the same standard to both
conventional foods and dietary supplements would create a desirable
``level playing field'' for all food processors and manufacturers. One
comment stated the adoption of the proposed standard will provide an
atmosphere in which all food manufacturers can move toward the
production of healthier foods, which will benefit the public health.
In FDA's reconsideration of how best to regulate dietary
supplements, one of the most significant issues has been the issue of
whether supplements should be regulated under a more lenient standard
or the same scientific standard as that established by Congress for
food in conventional food form. Despite assertions by some that
Congress directed that a more lenient standard be established, the
legislative history of the 1990 amendments does not support such a
position. To the contrary, as other comments point out, and as the
agency explained in the preambles of the health claims proposal (56 FR
60537 at 60539 through 60540), the health claims final rule (58 FR 2478
at 2507 through 2509), and the dietary supplement health claims
proposal (58 FR 33700 at 33703), Congress did not intend that the
agency be forced to adopt a different standard for dietary supplements.
Instead, Congress gave the agency the discretion to adopt any
appropriate scientific standard and procedure for dietary supplements.
There was nothing in the comments that indicated that FDA does not have
this discretion. Indeed, as some of the comments pointed out, there was
considerable support in both the House of Representatives and the
Senate for adoption of the same scientific standard and procedure for
dietary supplements. FDA addressed the position of members of Congress
on this issue in the preamble of the dietary supplement health claims
proposal (58 FR 33703):
Senator Hatch left no question about his position that FDA
should use this flexibility [to adopt the standard and procedure for
dietary supplements that appears appropriate to the agency] to adopt
a more lenient standard * * *
However, other members of Congress were equally clear about
their position that FDA should not adopt a more lenient standard. In
the October 24, 1990 Congressional Record at S 16608 [Ref. 4],
Senator Metzenbaum, the other primary author of the Senate
amendments, stated:
* * * It is my view that there is no reason to do anything other
than utilize the same procedure and standard for dietary
supplements.
Whatever approach the Secretary takes, he must establish a
system that evaluates the validity of health claims for dietary
supplements. The system must be based on the same considerations
that guide other agency decisions: public health, sound scientific
principles and consumer fraud.
Further, the House of Representatives clearly did not support a
more lenient standard for dietary supplements. The statement of
House Floor Managers that appears in the October, 26, 1990
Congressional Record at H 12953 [Ref. 2] states:
* * * Whatever approach the agency takes, it must adopt a system
that evaluates the validity of any disease claims made with respect
to these substances. Its system must be based on considerations of
public health and consumer fraud. As in every similar decision made
by the agency today, we fully expect that the agency's evaluation of
disease claims made with respect to vitamins will be based on sound
scientific principles.
There is a great potential for defrauding consumers if food is
sold that contains inaccurate or unsupportable health claims. The
potential is just as great for vitamins as it is for other products.
In our view, vitamins and other substances covered by this provision
should be subject to at least as strong a standard as is applicable
to other foods that contain claims that the food will treat a
disease or health condition.
Nothing in the DS act or its legislative history indicates in
any way that Congress changed its position about its goals of the
1990 amendments with respect to prohibiting misleading health claims
and improvement of the public health through use of valid and
understandable claims in food labeling [Ref. 3].
Although Congress left no question that the exact standard and
procedure for the regulation of health claims for dietary supplements
is left to the discretion of FDA, and although Congress did not provide
direct guidance concerning how FDA should use this discretion, Congress
did provide considerable general guidance about the intent of the
health claims provisions of the 1990 amendments. In view of the fact
that this guidance does not distinguish between dietary supplements and
foods in conventional food form, FDA considers this guidance to be
applicable to both types of foods. As pointed out above in this
response, Senator Metzenbaum, the other primary author of the Senate
amendments, stated that whatever approach the Secretary takes, he must
establish a system that evaluates the validity of health claims for
dietary supplements. He stressed that the system must be based on the
same considerations that guide other agency decisions: Public health,
sound scientific principles, and consumer fraud (Ref. 4). The quoted
statements of the House Floor Managers also stress that the agency's
approach to regulating dietary supplements must be based on
considerations of public health, sound scientific principles, and
consumer fraud (Ref. 2). In addition, these quoted statements make it
clear that Congress considered the use of ``inaccurate or unsupportable
health claims'' on food labeling to be harmful to the public (Ref. 2).
Moreover, Mr. Waxman, one of the House Floor Managers stated the
following in the July 30, 1990 Congressional Record (H5844):
What we have sought to do is to permit health claims but only
health claims based on scientifically valid information, and we hope
by having that scientifically valid information upon which a claim
can be made, that health claims in the future will be healthful and
not misleading.
Furthermore, as the agency pointed out in the January 6, 1993
Federal Register (58 FR 2478 at 2526):
By enacting the 1990 amendments, Congress sought to ensure that
health claims would be scientifically valid and not misleading.
(See, for example, statement of Rep. Madigan, and statement of Rep.
Waxman, [Ref. 2]). Experience had shown that many ``unfounded''
health claims were being used on foods (statement of Rep. Waxman
[Ref. 2]). Congress recognized the ``great potential for defrauding
consumers if food is sold that contains inaccurate or unsupportable
health claims.'' Id. (statement of House floor managers).
In response to the high potential for health claims to be
misleading, Congress legislated that any claim that is not
consistent with FDA regulations will misbrand a food. Section
403(r)(1)(B) of the act states that a food is misbranded if its
label or labeling contains a claim that ``expressly or by
implication * * * characterizes the relationship of any nutrient * *
* of the food to a disease or a health-related condition unless the
claim complies with regulations promulgated by FDA.
Sec. 403(r)(1)(B)'' (emphasis added). By taking this approach,
Congress chose to permit only those health claims on food that FDA
determines to be scientifically valid, effectively recognizing that
health claims are so potentially misleading as to be inherently
misleading.
Applying the same standard and procedure to health claims on
dietary supplements as that that applies to foods in conventional food
form will not affect the availability of any dietary supplements, will
ensure that health claims that appear in labeling are scientifically
valid and understandable, and will subject all segments of the food
industry to regulation in a fair and consistent manner. Those comments
favoring the same standard and procedure, for reasons of fairness,
control of consumer fraud, and conveyance of valid information about
diet and its impact on a disease or health-related condition, serve to
reinforce FDA's conclusion that the agency's proposed rule should be
finalized as proposed.
The agency disagrees with arguments that use of the same approach
for dietary supplements as for conventional foods would deny millions
of Americans the dietary information that they need to improve their
health and thereby cost the nation millions of dollars in health care
expenditures that could have been avoided. As FDA explained in the
preamble of the dietary supplement health claims proposal (58 FR 33700
at 33705):
* * * In the absence of adequate data to establish that health
claims are valid, assertions about costs associated with the lack of
information in food labeling and about the benefits of consumption
of substances in dietary supplements are highly speculative and
highly questionable. FDA does not agree that it should place more
weight on the potential benefits of the health information than on
eliminating the possibility of consumer misunderstanding. FDA must
weigh the public health impact of permitting a multitude of
preliminary claims against the possibility that a significant
portion of those claims will be determined to be not scientifically
valid. The latter result would likely produce a perception among
many consumers that food labels and health claims, even those that
are valid, are not reliable. To the extent that, as a result,
consumers do not change their dietary patterns to reduce their risk
of disease, they will be less healthy, and there will be more
needless deaths from disease and more costs to the national economy,
rather than less.
When FDA made this statement, the phrase ``adequate data to
establish that health claims are valid'' was intended to express the
position that until the validity requirements of Sec. 101.14(c) are
met, cost assertions about the benefits of substance consumption are
highly speculative and highly questionable. In general, prior to
fulfillment of this requirement, there may often be studies with a wide
variety of strengths and weaknesses indicating that there may, or may
not, be a valid association between a substance and a disease or
health-related condition. In deciding whether or not to authorize a
claim, FDA must consider that, while benefits may accrue from the
availability of the claim, there is a very real possibility that
significant costs may accrue if the claim is authorized prematurely. A
few studies may often be found about a multitude of associations, and
many, if not most, of those associations will ultimately be found not
to be valid. If FDA were to permit preliminary claims about such a
multitude of associations, the agency believes that ultimately what
would be lost is the confidence of most consumers in the validity of
all claims that appear in food labeling. FDA believes that the costs to
consumers of such a situation would prove to be greater than the costs
of not permitting preliminary claims. Of greater significance, however,
is that needless deaths would ultimately occur where consumers would
not change their dietary patterns to adopt a more healthful diet.
The agency believes that Congress, in its enactment of the
scientific standard in section 403(r)(3)(B)(i) of the act, struck what
it believed to be an appropriate balance between the costs and benefits
of claims on foods in general. FDA is not aware of any reason to strike
a different balance for dietary supplements. FDA would like to assure
all affected parties that the agency will move as expeditiously as
possible to permit health claims once the scientific evidence is
sufficiently supportive to conclude that associations between
substances and disease or health-related conditions are valid.
Although some comments asserted that claims based on a more lenient
standard would not be confusing because consumers of dietary
supplements are more knowledgeable than the general population, FDA
pointed out in the preamble of the dietary supplement health claims
proposal (58 FR 33700 at 33705) that there is nothing that limits the
purchasers of dietary supplements to ``knowledgeable consumers.'' The
comments did not submit justification for FDA to change its position in
this regard.
Assertions that use of the same scientific standard for dietary
supplements as that established for food in conventional food form is
counter to the 1990 amendments because less information about diet and
disease will be available to consumers are not correct. Under the 1990
amendments, authorized health claims provide considerably more
information about the effects of diet on disease where the effects are
recognized as scientifically valid than was the case before the passage
of the 1990 amendments. In the Federal Register of January 6, 1993, FDA
authorized claims with respect to 7 relationships (see 58 FR 2537,
2552, 2622, 2665, 2739, 2787, and 2820). Also, in the Federal Register
of October 14, 1993 (58 FR 53254), FDA proposed to permit health claims
concerning the relationship between folate and the risk of neural tube
birth defects. Admittedly, other health claims are not permitted to
appear on food labels and labeling, but Congress clearly intended
through enactment of section 403(r) of the act that only valid health
claims be permitted.
With respect to concerns that consumers will be forced to seek
information about diet and health from
unregulated sources such as books and the media, if FDA does not
authorize preliminary claims, FDA advises that it must implement the
provisions of the amendments as Congress chose to enact them. The 1990
amendments focus only on food labels and labeling. FDA cannot ignore
its clear responsibilities under the 1990 amendments because of
concerns about the unregulated sources of information that were
mentioned in the comments. Moreover, while such sources of information
may lead consumers to seek out products containing particular
substances, FDA's action will ensure that the labels and labeling of
those products contain only scientifically valid information that can
dispel any misconceptions created by the unregulated sources. With
respect to other concerns expressed by these comments, the agency
believes that the specific required elements in the health claims that
it has authorized to date demonstrate that the agency is encouraging
consumers to reduce their risk of disease by changing their diets and
lifestyle. For example, the specific requirements in
Sec. 101.72(c)(2)(A) requires, in part, that a claim about calcium and
osteoporosis make clear that an adequate level of exercise and a
healthful diet are needed in addition to adequate calcium consumption.
Arguments that the agency should allow preliminary claims because
of FDA's implementation of the drug provisions of the act have no
merit. Assertions about FDA's proposed action pertaining to ``Pediatric
Use'' for drug labeling in (57 FR 47423) are clearly wrong. The
agency's proposed action with respect to requiring the statement
``Safety and effectiveness in children have not been established''
pertains only to drugs for which there is no agency approval for any
pediatric population to use the drug. In point of fact, the agency
proposed to require this statement as a further warning that the
product should not be used for pediatric populations. Thus, this action
provides no support for authorizing preliminary health claims.
As FDA pointed out in the preamble of the dietary supplement health
claims proposal (58 FR 33700 at 33706), making dietary supplements
subject to the same scientific standard and procedure as for
conventional foods does not render section 403(r)(5)(D) of the act
superfluous. This section requires that the agency consider what
procedure and standard respecting the validity of claims are most
appropriate. This is what the agency has done. The fact that the agency
has found that, on balance, the standard and procedure established for
foods in conventional food form are also the most appropriate for
dietary supplements does not render the agency's efforts invalid or the
underlying provision superfluous. The agency was charged with
exercising its expertise and discretion, and that is what it has done.
5. A number of comments provided specific suggestions about the way
in which a more lenient approach could be implemented. Some comments
argued that the approach should be sufficiently lenient to permit
marketing of dietary supplements without any restrictions. Some of
these comments argued that dietary supplements needed no stringent
requirements because dietary supplements could be adequately regulated
under the requirement in section 403(a)(1) of the act that the labeling
of a food must be truthful and not misleading. Other comments suggested
that FDA could require a warning informing the consumer that FDA had
not substantiated particular claims appearing on a product. One comment
suggested that substantiated claims could be allowed to appear within a
specific advisory panel of the label, while preliminary claims would be
allowed to appear only outside the panel. Another comment suggested
that FDA adopt a split label approach, in which preliminary health
claims would be allowed, but the agency would have the right to comment
upon them on the label.
One comment suggested that health claims for which there is
substantial scientific evidence but not yet significant scientific
agreement be subject to a certification and notification procedure
rather than rulemaking proceedings. Under the procedure suggested by
the comment, claims could be made for dietary supplements so long as:
(1) The claim expressly discloses the absence of scientific agreement
as to the relationship, (2) the manufacturer provides FDA with a fully
documented certification by a panel of at least three qualified experts
that there is substantial scientific evidence supporting the claim, and
(3) FDA does not disapprove the claim within 90 days of receipt of the
certification. (When additional information is needed, the 90 day
period could be extended an additional 45 days.) Under this suggested
alternative, FDA would have an opportunity to participate in the
selection of the expert panel.
One comment requested that FDA only disallow the use of those
health claims on dietary supplements that are not supported by any
evidence, and that it classify all other health claims into one of five
categories and allow for their use on products in conjunction with a
code system indicating to consumers the level of substantiation that
the claim has achieved. The comment suggested that the highest category
be full substantiation; the second, those claims that have a high
degree of substantiation as judged by non-FDA experts, but that FDA
finds to be not fully substantiated; the third, claims that have
support in the form of double-blind placebo controlled studies
published in peer-reviewed professional journals; the fourth, claims
that are supported by some evidence from in vitro studies, animal
studi
FR Doc. 93-31815 Food Labeling; General Requirements for Health Claims for Dietary Supplements
es, or other studies that do not involve humans; and the fifth,
those claims supported by anecdotal evidence. In support of its call
for various approval levels, the comment stated that simply
categorizing a claim as ``substantiated'' or ``unsubstantiated'' does
not accommodate the reality that full substantiation of a health claim
consists of cumulative evidence from many studies. The comment
maintained that if FDA were to place all claims that have not achieved
full substantiation into the same category, FDA would not be providing
a means for the public to distinguish claims that are nearly
substantiated from those that are entirely false. Moreover, the comment
stated that an agency determination that a claim is or is not supported
by ``significant scientific agreement'' often reflects a political
decision rather than a scientific one. The comments said that FDA
panels comprise a very small percentage of the scientific community,
that other scientists often disagree with the panels' findings, and
that there even may be differing opinions within the panels themselves.
The comment stated that, given these conditions, it is blatantly
dishonest and misleading to the public for FDA to make a general
declaration that a claim is or is not substantiated.
A few similar comments called for FDA to devise a multilevel
approval scheme for health claims on dietary supplements that would
allow statements concerning the traditional use of a product to appear
on the label and would permit the label of a supplement that contained
a substance that was the subject of a pending health claim petition to
indicate that the product was under FDA review for a health claim but
not to indicate the nature of the claim. The comments stated that the
adoption of this approach would encourage manufacturers of products
that qualify only for the ``traditional uses'' or ``claim pending''
approval categories to gather, perform, and submit research information
to FDA in order to reach higher approval levels.
One comment suggested that FDA allow manufacturers to use
facsimiles of the FDA seal in conjunction with the various ratings. The
comment asserted that this approach would encourage manufacturers to
come into compliance with FDA regulations quickly, as the seals would
become valuable marketing tools for which consumers look when
purchasing supplements, and the lack of a seal would become a marketing
disadvantage for a company.
FDA has considered these alternative standards and procedures
suggested by the comments and finds that none of them have the
characteristics that are necessary to achieve the goal envisioned by
Congress in passing the 1990 amendments. Previously in this preamble
the agency concluded that Congress intended that FDA adopt a scientific
standard and a procedure that ensure that health claims that appear in
labeling are scientifically valid and understandable. None of the
alternative standards and procedures offered by the comments meets this
objective. One of Congress' primary concerns in passing the 1990
amendments was the widespread use of health claims whose scientific
validity had not been established (Ref. 1). The purpose of the 1990
amendments was to bring that situation under control. The problem with
the alternative procedures offered by the comments is that, rather than
bringing the use of claims on dietary supplements under control, they
would ratify the state of affairs that caused Congress to act.
As FDA explained in the preamble of the dietary supplement health
claims proposal, a standard for health claims for dietary supplements
that is based only on section 403(a)(1) of the act, or that allows
health claims based on the traditional use of the supplement or the
existence of substantial scientific evidence but not significant
scientific agreement about the validity of the claim, would be
inconsistent with Congress's desire to ensure that health claims that
are made on dietary supplements, or on any other food, are
scientifically valid. FDA pointed out that if such claims were to be
permitted, consumers would be faced with a multitude of claims, some
valid and some not valid. FDA stated that it would be unlikely that
consumers could distinguish between valid and invalid claims. Although
comments on the dietary supplement health claims proposal asserted that
consumers would not be confused by a multitude of claims, the comments
did not actually go further in addressing how consumers would react to
such a situation in food labeling. More specifically, the comments did
not provide data to resolve the question of whether consumers would be
able to understand gradations of scientific reliability of claims on
food labeling, or whether consumers would, in fact, be left as confused
as they were before passage of the 1990 amendments. While a number of
comments did assert that some studies show that consumers are able to
use various advertising claims about diet and disease in a rational and
beneficial manner, the studies were not actually submitted. In the
absence of the studies, FDA has no basis upon which it can evaluate the
assertions of the relevance of the studies to food labeling. In the
absence of evidence to the contrary, the agency considers it more
likely that consumers would be considerably confused by a multitude of
claims with differing degrees of reliability. One of the purposes of
the 1990 amendments was to end such confusion (see statement of Mr.
Waxman, 136 Congressional Record H12953 (Ref. 2)). Therefore, FDA
rejects this assertion.
Approaches such as those involving a ``split label'' or the use of
an FDA seal would also not be consistent with the congressional desire
for scientific validity because manufacturers would still be able to
market dietary supplements with claims that were not scientifically
valid. Even if FDA seals were being used to distinguish those claims
that FDA considered to be valid, there would be a question as to
whether consumers would be able to ascertain which claims were
preliminary and which were not. These approaches would not restrict the
number of health claims that were of questionable validity, about which
Congress was specifically concerned (Ref. 1).
Thus, FDA has concluded that it would not be appropriate to adopt
any of the alternative approaches suggested by the comments.
6. Several comments suggested that FDA adopt the reasonable
substantiation standard used by the Federal Trade Commission (FTC) (see
FTC Policy Statement Regarding Advertising Substantiation Program (49
FR 30999, August 2, 1984)). The comments asserted that under this
policy, FDA could allow manufacturers to make claims provided that the
nature of the scientific finding is accurately represented, the degree
of evidence is not misrepresented, and the claim passes a rough cost/
benefit test. The comments argued that this policy would facilitate
harmonization with the FTC regulations governing the use of health
claims in food advertising, would allow consumers to have access to
truthful, nonmisleading, and reliable labeling information, and would
still allow FDA to take action against those dietary supplements
bearing health claims that are not properly substantiated.
Arguments that FDA should adopt for dietary supplements FTC's
approach for regulating advertising are not consistent with Congress'
expectations for health claims. While the FTC and FDA are working
together to achieve as much consistency in their approaches to health
claims as their respective statutes allow, adoption by FDA of the FTC
advertising substantiation approach would not provide FDA the
confidence Congress intended concerning the scientific validity of the
claims. Specifically, as explained above, one of Congress' main
purposes in passing the 1990 amendments was to ensure that health
claims made in food labeling are scientifically valid. No such
assurance of scientific validity is provided under the standard that
FTC must employ. Under that standard, there must be some evidence to
support a claim, but it need not rise to the level of establishing the
claim's validity. Thus, the FTC standard is not adequate for health
claims. In this context, it is appropriate to reiterate FDA's response
to comments asserting that it was bound to follow cases involving FTC's
regulation of advertising in the preamble of the health claims final
rule (58 FR 2478 at 2528):
Although cases involving FTC may sometimes be relevant, it is
important to note that fundamental differences exist between the
regulatory schemes administered by the two agencies. Congress has
long recognized the division of roles between the two agencies--FTC
concentrates on the interests of commerce and economic needs,
whereas the objective of FDA is ``the health of the people.'' FTC
regulates unfair competition and trade practices, including food
advertising. (See, for example, 15 U.S.C. sections 45 and 52.) In
contrast, FDA is a scientific agency empowered to regulate the food
label, among other things. Under section 403(r)(3)(B)(i) of the act,
FDA may permit health claims on foods only if it has determined that
those claims meet the statutory test for scientific validity. The
laws under which FTC operates do not include a comparable statutory
standard. Thus, it would not be appropriate for FDA to follow the
case law involving FTC.
III. The Final Regulation
In light of the foregoing, FDA is subjecting dietary supplements to
the same standard and procedure that applies to food in conventional
food form. The agency believes that this approach strikes the
appropriate balance between the congressional concern for consumer
fraud, public health, and sound science, on the one hand, and the
desire to provide the consumer with information on the other. Thus, the
agency is revising Secs. 101.14 and 101.70 to include dietary
supplements.
A. Definitions
In the health claims proposal, FDA proposed definitions for
``health claim,'' ``substance,'' ``nutritive value,'' and ``dietary
supplement'' to serve as tools for clearly establishing the scope of
the types of claims that would be subject to the regulations
promulgated under section 403(r)(1)(B) of the act. In addition, the
agency proposed a definition for ``disqualifying nutrient levels'' to
establish limits on the levels at which certain nutrients that are
known to increase the risk of a disease or health-related condition
could be present in a food, and the food would still be eligible to
bear a health claim (see section 403(r)(3)(A)(ii) of the act).
In the health claims final rule, the agency adopted definitions for
the terms ``health claim,'' ``substance,'' ``nutritive value,'' and
``disqualifying nutrient levels,'' that it revised in response either
to comments or to the DS act (see Sec. 101.14(a)(1), (2), (3), and
(5)). Also, FDA adopted a definition for the term ``disease or health-
related condition.'' Although the term is used in the definition of
``health claim,'' and the term serves to identify one of the basic
elements of a health claim, the agency had not proposed a definition
for it. The agency added this definition to clarify the coverage of the
health claim provisions (see Sec. 101.14(a)(6)). Because of the DS act,
the agency reserved the question as to whether these definitions would
apply to dietary supplements. The agency also did not include a
definition of ``dietary supplement'' in the final rule because of the
moratorium imposed by the DS act.
In the dietary supplement health claims proposal, FDA proposed to
adopt the same regulatory scheme for health claims for dietary
supplements that it had established for foods in conventional food
form. To effect this tentative decision, the agency proposed to revise
the definition of ``substance'' to make clear that it covers both food
in conventional food form and dietary supplements and to establish a
definition for ``dietary supplement.''
FDA received no comments on the former aspect of the proposal.
Therefore, the agency is adopting it as proposed. However, FDA did
receive some comments on its proposed definition of ``dietary
supplement.''
1. Dietary Supplement
FDA proposed the following definition for the term ``dietary
supplement'' (proposed Sec. 101.14(a)(4)):
Dietary supplement means a food, not in conventional food form,
that supplies a component to supplement the diet by increasing the
total dietary intake of that component.
In the past, FDA has taken a position that the term ``dietary
supplement'' applied only to supplements composed of essential
nutrients. However, FDA did not propose to limit the definition in
Sec. 101.14(a) in this way because section 403(r)(5)(D) of the act
includes dietary supplements of herbs, substances that generally
contain few essential nutrients. In addition, the legislative history
indicates that the term ``other nutritional substances'' could include
a number of substances that have not been shown to be essential or
nutrients (Ref. 4).
7. One comment commended the agency for proposing a definition of
``dietary supplement'' that recognized that these foods could have
components other than substances known to be essential nutrients. The
comment asserted that the proposed definition would appropriately move
supplements out of the food additive category.
FDA advises that the comment's assertion that the definition moves
dietary supplements out of the food additive category is not correct. A
dietary supplement, as the definition recognizes, is a compounded food
that may include compounds that are food additives. Whether a component
of food is a food additive or not is determined under section 201(s) of
the act (21 U.S.C. 321(s)), not section 403(r) of the act. Congress
specifically provided in section 9 of the 1990 amendments that these
amendments ``shall not be construed to alter the authority of the
Secretary of Health and Human Services * * * under the Federal Food,
Drug, and Cosmetic Act.'' Thus, the components of dietary supplements
that are food additives are still fully subject to the food additive
requirements under section 409 of the act.
8. A few comments requested that the proposed definition of
``dietary supplement'' be modified to explicitly include all herbal
extracts. One of these comments asserted that the definition should
include ``processed or unprocessed plant parts (bark, leaves, flowers,
fruits, and stems) as well as extracts of essential oils, marketed as
teas, powders, tablets, capsules, and elixirs.''
FDA is adopting the definition of ``dietary supplement'' as
proposed. This definition is intentionally broad to cover the range of
substances that, under the legislative history, could be included in a
dietary supplement and could be the subject of a health claim. The
purpose of the definition of ``dietary supplement'' is not to define
the substances that may be eligible to be the subject of a health claim
but to define the form in which they are to be sold to be subject to
regulation as a ``dietary supplement.'' Under the scheme that FDA is
adopting, and that Congress envisioned (see Ref. 4, statement of
Senator Metzenbaum), the determination as to what substances are
appropriately the subject of a health claim is made on a case-by-case
basis, based on the factors set out in Sec. 101.14(b) and the evidence
presented to the agency. The agency disagrees with the comment in one
respect, however. Teas are food in conventional food form and thus not
included within the definition of ``dietary supplement.''
9. One comment asserted the definition of ``dietary supplement''
should include foods in conventional food form that are fortified with
a vitamin or mineral to a level of 50 percent or more of the Reference
Daily Intake (RDI) per serving (e.g., many breakfast cereals).
FDA does not agree that such foods should be included in the
definition of ``dietary supplements.'' As discussed in the preamble to
the dietary supplement proposal (58 FR 33700 at 33707), FDA has limited
this definition to foods not in conventional food form to reflect the
approach taken by Congress in the DS act. The manager's statements for
the DS act from the Senate and the House (Ref. 3) clearly state that
the moratorium on the implementation of the 1990 amendments applies
only to dietary supplements ``not in the form of conventional food.''
Because foods in conventional food form were not covered by the DS act
moratorium, the health claims regulations already apply to them.
Consequently, FDA believes that it will reduce confusion about the
impact of these regulations if the agency limits coverage of the term
``dietary supplements'' to foods not in conventional food form. Of
course, foods in conventional food form that are formulated to
supplement the dietary intake of nutrients will be free to reflect
their characteristics in their common or usual name (e.g., vitamin and
mineral supplement cereal).
2. Nutritive Value
In the health claims final rule, FDA defined ``nutritive value'' as
follows:
Nutritive value means a value in sustaining human existence by
such processes as promoting growth, replacing loss of essential
nutrients, or providing energy.
Although FDA did not propose any changes in the definition of
``nutritive value'' in the dietary supplement health claims proposal,
many comments expressed concern about the impact of this definition in
conjunction with the preliminary requirement in Sec. 101.14(b)(3)(i)
that the substance that is the subject of a health claim contribute
taste, aroma, or nutritive value, or any technical effect listed in
Sec. 170(o), and that the substance must retain that attribute when
consumed at levels that are necessary to justify a claim. (Preliminary
requirements are criteria in Sec. 101.14(b) that have to be met before
a substance will qualify to be the subject of a health claim. An
indepth discussion of all preliminary requirements follows in section
III.B. of this document.)
10. Some comments urged the agency to broaden its definition of
``nutritive value.'' These comments urged the agency to recognize that
the processes by which a nutrient promotes health, maintains proper
bodily functioning, and protects the body from the development of
chronic disease or other health-related conditions are, in and of
themselves, characteristic of ``nutritive value.'' The comments noted
that the basic function of Vitamin E, for example, relates to its
antioxidant properties in preventing cell damage by trapping peroxyl
free radicals and inhibiting the oxidation of unsaturated fatty acids.
Also, the comments pointed out that fiber does not promote growth,
replace essential nutrients, or provide energy, but that Congress
specifically required FDA to study the relationship between various
diseases and fiber. Some of the comments asked that the phrase
``preventing or repairing the negative metabolic consequences of life
processes'' be added to the list of processes that characterize the
nutritive value of a food to ensure that such components can be the
subject of health claims. A few comments asserted that FDA should
revise the definition of ``nutritive value'' to provide for claims
about ``prevention'' of a disease or health-related condition.
However, one comment maintained that the definition of ``nutritive
value'' in Sec. 101.14(a)(3) is broad enough to include the functions
of most dietary supplements. The comment supported its position by
agreeing with FDA's statement in the health claims final rule (58 FR
2478 at 2488) that the inclusion of the phrase ``such as'' in the
definition ensures that the three referenced processes are examples of
how a substance may confer nutritive value rather than as an all-
inclusive list.
The comment that highlighted FDA's use of the phrase ``such
processes as'' in this definition is correct. FDA intended the three
referenced processes to be examples of how a substance may confer
nutritive value rather than as an all-inclusive list of the functions
that provide such value. As FDA explained in the health claims final
rule (58 FR 2478 at 2488), the definition of ``nutritive value'' is
intended to be very flexible. The agency incorporated this flexibility
in the definition because FDA recognizes that certain substances can
play a major role in reducing the risk of certain chronic diseases and
may confer their benefits through a number of processes. FDA believes
that the agency should evaluate the nutritive value claimed for a
substance that is proposed as the subject of a health claim, as
described in a health claim petition, on a case-by-case basis. This
approach will best ensure that the definition retains its intended
flexibility and does not become an unintentional barrier to
authorization for legitimate health claims.
FDA does believe, however, that this preamble should provide
guidance concerning how the agency will determine if a claimed
nutrient-disease relationship derives from the nutritive value of a
substance. In general, the agency will look for evidence that the
claimed effect on disease is associated with the normal maintenance of
human existence. If the substance is used to correct an abnormal
physiological function caused by a disease or health-related condition,
the action of the substance is clearly beyond a normal maintenance
function, and the health benefit would therefore not derive from the
substance's nutritive value. Such a substance would be a drug. (Note
also that claims about classical nutrient deficiency diseases are not
health claims (see 58 FR 2478 at 2481).)
FDA recognizes that many of the benefits mentioned in the comments
may derive from the nutritional value of a substance. The agency's
broad definition of ``nutritive value'' includes assisting in the
efficient functioning of classical nutritional processes and of other
metabolic processes necessary for the normal maintenance of human
existence. Dietary fiber, for example, helps to assure normal
intestinal transit time, thereby providing nutritional value by
promoting efficient bowel function. Vitamin E provides nutritive value
through its antioxidant function of reduction of cell damage.
With respect to assertions that FDA should revise the definition of
``nutritive value'' to provide for claims about ``prevention'' of a
disease or health-related condition, the agency points out that the
preamble of the health claims final rule (58 FR 2478 at 2501 through
2502) fully addressed this matter and concluded that a claim that a
substance can be used in the prevention, diagnosis, cure, mitigation,
or treatment of a disease or symptom is inappropriate for a food (see
section 201(g)(1)(B) of the act and Sec. 101.9(k)(1) (21 U.S.C.
101.9(k)(1))). FDA reached this conclusion because the relationship of
a food or a food component to a disease is quite different from that of
a drug. The comments making these assertions did not provide any basis
upon which FDA could conclude that the agency's position in this matter
should be different for dietary supplements than for foods in
conventional food form. As FDA explained in the preamble of the health
claims final rule, the Surgeon General's Report on Nutrition and Health
(Ref. 5) points out that, apart from classic disorders resulting from
dietary deficiencies of essential nutrients (e.g., pellagra and
niacin), it has proved difficult to demonstrate causal associations
between specific dietary factors and chronic or other diseases (e.g.,
dietary fiber and cancer). The report states:
Development of the major chronic disease conditions--coronary
heart disease, stroke, diabetes, or cancer--is affected by multiple
genetic, environmental, and behavioral factors among which diet is
only one--albeit an important--component. These other factors
interact with diet in ways that are not completely understood. In
addition, foods themselves are complex; they may contain some
factors that promote disease as well as others that are protective.
The relationship of dietary fat intake to causation of
atherosclerotic heart disease is a prominent example. An excess
intake of total fat, if characterized by high saturated fat, is
associated with high blood cholesterol levels and therefore an
increased risk for coronary heart disease in many populations. A
higher proportion of mono- and polyunsaturated fats in relation to
saturated fats is associated with lower blood cholesterol levels
and, therefore, with a reduced risk for coronary heart disease.
Because of these complexities, definitive scientific proof that
specific dietary factors are responsible for specific chronic
disease conditions is difficult--and may not be possible--to obtain,
given available technology.
(Ref. 5).
11. Several comments argued that the definition of ``nutritive
value'' should include levels of nutrients that are achievable only
through the use of fortified foods or dietary supplements. Several of
these comments referenced studies recently reported in the New England
Journal of Medicine that indicate that vitamin E reduces the risk of
heart disease when consumed at levels that are almost impossible to
achieve through a conventional diet but that can be easily and safely
attained through the use of dietary supplements. These comments
asserted that it would be inappropriate for FDA to categorize the
involved nutrient levels of vitamin E as therapeutic and to refuse to
consider approving a health claim simply because the claim concerns
levels of a nutrient above that achievable in a normal daily diet. A
few of the comments supported this assertion by noting that the
mechanism by which Vitamin E protects against cell damage when consumed
at normal dietary levels is identical to the mechanism by which it
protects against heart disease when consumed at higher levels. The
comments maintained that, in cases such as this one, the agency should
approve health claims for use strictly on dietary supplements, provided
that the nutrient is safe when consumed at the level at which the
claimed effect is achieved, and the supplement is intended to be
consumed to optimize health rather than as a drug. The comments
supported this regulatory approach by noting that the health benefits
of calcium occur when the nutrient is consumed at increased levels that
can be achieved through the diet or by supplementation and stating that
vitamin E should not be treated differently simply because the
beneficial levels cannot be reached without the use of dietary
supplements.
Similar comments argued that FDA should at least avoid establishing
a maximum level of a nutrient that is considered to be characteristic
of ``nutritive value.'' One of these comments noted such an approach
results in an extremely fuzzy line, because the maximum level of a
nutrient that is achievable in a diet varies widely from one individual
to another. As an example, the comment pointed out that a person who
eats ten oranges or drinks a quart of orange juice per day gets more
vitamin C than is provided by most currently marketed vitamin C
supplements. A few comments asserted that there is much scientific
disagreement over what levels of a nutrient are ``nutritive,'' with
many scientists contending that levels much higher than the U.S.
Recommended Daily Allowances (U.S. RDA) fall within the definition. A
few comments requested that FDA explicitly express in its regulations a
policy that nutritive value may involve relatively high levels of a
nutrient.
A few comments maintained that FDA should presume that all
nutrients function in a nutritive manner regardless of their level,
unless it has proof to the contrary. In support of this position, a
number of comments objected to the use of niacin's effect on blood
cholesterol levels in the dietary supplement proposal as an example of
an effect that is not nutritive. One of these comments questioned FDA's
assertion that niacin does not exhibit cholesterol-reducing properties
when ingested at the levels conventionally associated with its function
as a vitamin. The comment stated that niacin's vitamin effect occurs
below the level of tissue saturation and maintained that the excretion
of niacin when consumed at higher levels known to be associated with
cholesterol-lowering effects does not necessarily indicate that tissue
saturation has occurred. This comment also disagreed with the agency's
statement that the occurrence of liver damage when high levels of
niacin are consumed indicates that the effect of niacin at these levels
is not nutritive in nature. The comment argued that it is quite
possible that niacin continues to have nutritive effects at these
levels but simply is overloading the body's normal metabolic pathways
for ridding itself of excessive levels of the nutrient. The comment
asserted that while legitimate safety concerns exist in particular
cases of excessive nutrient intake, FDA should not use this fact to
conclude that high levels of those nutrients are inherently
nonnutritive in nature and are instead pharmacological.
Other comments expressed the belief that nothing in the proposed
regulations would automatically exclude high levels of nutrients from
the definition of ``nutritive value'' and urged the agency to include
such levels in instances where they would benefit the public health.
These comments also agreed with FDA's decision to review on a case-by-
case basis whether the amount of a substance is appropriate as the
subject of a health claim. One of these comments stated that such an
approach would help to ensure that health information about fortified
foods and dietary supplements can be conveyed without triggering the
drug regulations.
FDA does not believe that it is necessary for the rules to
explicitly state that nutritive value includes relatively high levels
of a nutrient. As some comments pointed out, the case-by-case approach,
which, as stated above, is intrinsically linked with the preliminary
requirement in the provisions of Sec. 101.14(b)(3)(i), provides the
agency with considerable flexibility with respect to high levels of
substances in dietary supplements. Under this approach, FDA has not, as
a general rule, established any maximum level at which a nutrient would
cease to have ``nutritive value.'' Furthermore, the agency advises that
there is no basis for concerns that FDA would use safety concerns alone
to conclude that high levels of nutrients are pharmacological. FDA will
not do so.
As some of the comments pointed out, petitions for claims that
require that high levels of substances be ingested should have no
problem demonstrating that the substance has nutritive value where the
mechanism by which the substance affects the risk of disease at these
high levels is the same as the mechanism by which it functions as a
nutrient at normal dietary levels. However, it will still be necessary,
as the agency explained in response to the previous comment, for the
petition to show that the substance's effect on disease is associated
with the normal functioning of the human body (e.g., the substance
could not be used to correct an abnormal physiological function caused
by a disease or health-related condition.)
In its response to the previous comment, the agency acknowledged
that vitamin E provides nutritive value through its antioxidant
function of reduction of cell damage. If there are situations where it
can be established that this same antioxidant mechanism affects the
risk of disease when the vitamin is consumed at levels significantly
higher than normal dietary levels, such levels would satisfy the
requirement in Sec. 101.14(b)(3)(i) that a substance retain its food
attribute (i.e., its nutritive value) when consumed at levels that are
necessary to justify a claim.
FDA does not agree, however, that it should presume that all
nutrients function in a nutritive manner, regardless of their level,
unless it has proof to the contrary. It would not be practicable for
the agency to bear the burden of determining the mechanism by which the
claimed effect is occurring for each petitioned claim. Thus, the agency
finds that it is appropriate to require that petitioners provide the
basis for why it is reasonable to conclude that the claimed effect is
nutritional and not pharmacological. However, the agency does not
necessarily expect absolute proof on this issue. FDA will evaluate
petitions on this issue on a case-by-case basis.
The agency has considered assertions that the dietary supplement
proposal should not have cited the cholesterol-reducing properties of
niacin as an example of a high dose effect that is not nutritive. FDA
has again concluded that niacin is an appropriate example because there
are significant indications that a nutritive mechanism is not
responsible for the cholesterol-lowering effect that occurs with high
levels of niacin intake. When FDA stated in the dietary supplement
proposal that levels of niacin necessary to produce the cholesterol-
lowering effect are far in excess of the levels at which there is
tissue saturation for niacin's vitamin function, the agency was
attempting to explain that for niacin's function as a vitamin there is
a level beyond which additional niacin will not provide additional
functional results for that vitamin. The term ``tissue saturation'' may
imply either this type of situation (sometimes referred to as
``function saturation'') or the type of situation referred to in one of
the comments wherein the tissue is saturated with a concentration of a
substance, and more substance could immediately spill out into the
urine. FDA was not attempting to assert that the tissue itself was
actually saturated. There is no question that additional niacin will be
absorbed by cells when the vitamin function saturation level is
reached.
In addition to the situation with vitamin function saturation,
there are other indications that the cholesterol-reducing properties of
niacin do not result from the same mechanism as that presented by its
vitamin function. Vitamin function saturation may be achieved through
dietary supplementation with either of the two forms of the vitamin,
nicotinic acid or nicotinamide. However, only nicotinic acid provides,
at high levels, the cholesterol-reducing effects. Such effects do not
appear with high level consumption of nicotinamide (Ref. 6). If the
same mechanism were involved with the vitamin function of niacin as
with the cholesterol-reducing properties of niacin, both forms of this
vitamin should have cholesterol-reducing properties.
3. Health Claim
In the dietary supplement health claim proposal, FDA did not
propose to make any modifications in the definition of ``health claim''
in Sec. 101.14(a)(1):
Health claim means any claim made on the label or in labeling of
a food, including a dietary supplement, that expressly or by
implication, including ``third party'' references, written
statements (e.g., a brand name including a term such as ``heart''),
symbols (e.g., a heart symbol), or vignettes, characterizes the
relationship of any substance to a disease or health-related
condition. Implied health claims include those statements, symbols,
vignettes, or other forms of communication that suggest, within the
context in which they are presented, that a relationship exists
between the presence or level of any substance in the food and a
disease or health-related condition.Nonetheless, FDA received
several comments on this definition.
12. Some comments asserted that FDA should clarify the types of
statements that will be regulated as health claims. A few of these
comments asked whether statements that indicate that a product may be
useful in maintaining good health (e.g., ``Substance X may be
beneficial to good health'') or that describe the biochemical functions
of vitamins, minerals, and other nutrients (e.g., ``Vitamin A is
necessary for good eyesight,'' ``Protein helps build a strong body'')
will be considered to be health claims. The comments objected to FDA's
failure to provide clear instruction in this regard. These comments
asserted that the agency's allowance of case-by-case interpretation of
the regulations will hinder industry compliance, create enforcement
problems for the agency, and cause continued antagonism between FDA and
the food industry.
FDA believes that it provided ample guidance on what types of
statements constitute health claims in the health claims final rule. As
the agency explained in the preamble of that rule (58 FR 2478 at 2479
through 2488), the definition establishes that a claim must have at
least two basic elements for it to be regulated as a ``health claim.''
First, the claim must be about a ``substance'' as defined in
Sec. 101.14(a)(2). Secondly, the claim must characterize the
relationship of that substance to a ``disease or health-related
condition,'' as defined in Sec. 101.14(a)(6):
Disease or health-related condition means damage to an organ,
part, structure, or system of the body such that it does not
function properly (e.g., cardiovascular disease), or a state of
health leading to such dysfunctioning (e.g., hypertension); except
that diseases resulting from essential nutrient deficiencies (e.g.,
scurvy, pellagra) are not included in this definition (claims
pertaining to such diseases are thereby not subject to 101.14 or
101.70).
If a statement has one of these elements without the other, it
would not be a ``health claim,'' although it may still be subject to
regulation under other provisions of the act (e.g., the requirement
of section 403(a)(1) of the act that a label statement be truthful
and not misleading). Thus, all of the statements mentioned by the
comments would not be health claims because they do not address a
disease or health-related condition as defined under
Sec. 101.14(a)(6). The agency has provided a lengthy and detailed
discussion on what types of statements constitute health claims in
the health claims final rule at the pages cited above.
12. A few comments asked whether FDA would remove or prohibit the
publishing of books containing information on health claims and argued
that such regulations would clearly be unconstitutional. Other comments
addressed the issue of whether FDA's health claims regulations for
dietary supplements would apply to advertising. One of these comments
interpreted an excerpt from the report of FDA's Task Force on Dietary
Supplements as an attempt to disallow the use of unapproved health
claims in magazines, newsletters, or other media channels unless the
information has been preapproved by FDA. That excerpt reads:
The task force considered various issues in its deliberations,
including how to assure the safety of dietary supplements; how to
limit the potential for fraud, i.e., disease claims made on labels
or through other means, e.g., magazine articles, newsletters, and
advertisements * * *.
The comment further asserted that this same intent is reflected in
the health claim regulations proposed in November 1991. The comment
stated that this broad-based application of the health claims
regulations would severely jeopardize the reporting of health and
disease-related information in almost every form of media, would
inhibit the evolution of scientific knowledge, would have a significant
negative impact on the public health of America, and was likely
unconstitutional.
FDA advises that the provisions of this regulation pertain only to
a product's label and labeling. This regulation does nothing to censor
the content of books, magazines, or advertising. This regulation also
does not in any way regulate the availability of books, magazines, or
advertising. However, firms sometimes choose to use such material as
labeling for their products, and if used as such, the material would be
subject to this regulation. For example, sometimes firms copy an
article from a magazine and display that article with a product that is
offered for sale. Under such circumstances, the article would be a part
of the labeling of that product. What is significant to note is that
these regulations in no way limit what articles may be published, or
what books may be printed. They limit only the claims that may be made
in the labeling of food products. Under the act, advertising may
provide objective evidence of what the intended use of a particular
product is. If the advertising reveals that the product is intended to
be used as a drug, the product may be regulated as a drug. In addition,
claims made in advertising may affect the type of nutrition labeling
that is provided (see Sec. 101.9(j)). Claims made in advertising,
however, are not subject to section 403(r)(1)(B) of the act.
Thus, the agency finds no merit in the concerns expressed by these
comments.
B. Preliminary Requirements for a Claim
In the health claims final rule, FDA established several criteria
in Sec. 101.14(b) that have to be met before a substance will qualify
to be the subject of a health claim. The criteria provide that the
substance must: (1) Be associated with a disease or health-related
condition for which the general U.S. population is at risk
(alternatively, the relevance of the claim may be explained within the
context of the daily diet) (see Sec. 101.14(b)(1)); (2) be a food (see
Sec. 101.14(b)(2) and (b)(3)(i)); and (3) be safe and lawful under
applicable food safety provisions of the act (see
Sec. 101.14(b)(3)(ii)). These criteria reflect not only the
requirements of section 403(r) of the act but also the fact that FDA is
charged with ensuring that the food supply is safe, and that the food
label is not misleading. Given that agency evaluations of the validity
of a health claim will be resource intensive, FDA decided not to
undertake such evaluations unless a petition for a health claim
demonstrates that the preliminary requirements are met. While FDA had
proposed in November of 1991 that these preliminary requirements cover
substances in dietary supplements as well as foods in conventional food
form, the provisions of the DS act precluded the agency from applying
these preliminary requirements to substances in dietary supplements at
the time that the rule was finalized. Thus, the preliminary
requirements established in the health claims final rule apply only to
substances in foods in conventional food form.
The dietary supplement health claim proposal contained provisions
to subject the components of dietary supplements to the same
preliminary requirements in Sec. 101.14(b) that apply to any other
substance that is proposed as the subject of a health claim. This final
rule for dietary supplements retains these provisions as proposed.
Specific reference to dietary supplements in Sec. 101.14(b)(1) and
(b)(2) is not necessary because the requirements in these paragraphs
apply generally to any ``substance,'' and FDA's revision of the
definition of ``substance'' in Sec. 101.14(a)(2) includes the
components of dietary supplements within the coverage of this term.
However, FDA proposed to add a specific reference to dietary
supplements to paragraph (b)(3)(i) of Sec. 101.14 to clarify that the
substance may be a component of a food that is in the form of a dietary
supplement. The only comments on the issue agreed with the agency's
proposed revision. Accordingly, as proposed, FDA is including in the
final regulations a reference to dietary supplements in the codified
language of Sec. 101.14(b)(3)(i). Specifically, FDA is inserting the
phrase ``regardless of whether the food is in conventional food form or
dietary supplement form'' into Sec. 101.14(b)(3)(i).
1. Effect on General Population
13. One comment argued that the proposed requirement that a
substance be associated with a disease or health-related condition for
which the general U.S. population or a subpopulation thereof is at
risk, or that the claim be explained within the context of the daily
diet, would prohibit the appearance of health claims on herbal dietary
supplements. However, the comment did not explain how the requirement
would have this effect, and the comment's own analysis of how garlic
would or would not meet various proposed requirements indicated that
garlic would meet this particular requirement.
FDA does not agree that this preliminary requirement will present
any significant barriers to the appearance of health claims on dietary
supplements. To the contrary, as the agency explained in the preamble
of the health claims final rule (58 FR 2478 at 2499), FDA intends to
employ a flexible approach in interpreting this provision. The
alternative aspect of the provision, which creates the possibility of
claims about the relationship of a substance to a disease or health
related-condition that affects very few in the U.S. population as long
as the petition in support of the claim addresses that fact and the
relevance of the claim in the context of the total daily diet,
evidences a determination by FDA to provide the widest latitude
possible for proposed claims to qualify under this provision.
14. One comment requested that FDA not limit the diseases or
health-related conditions that may be the subject of a health claim to
those for which the entire United States is at potential risk. The
comment asserted that health claims should also be allowed in cases
where dietary factors have been conclusively shown to affect diseases
or health-related conditions for which only a particular subportion of
the U.S. population is at risk (e.g., ovarian cancer in women).
FDA advises that the general eligibility provisions of its health
claims regulations in Sec. 101.14(b)(1) do not contain the restriction
cited by the comment. While these provisions contain a requirement that
health claims pertain to diseases or health-related conditions
affecting the general U.S. population, they also provide that health
claims may pertain to diseases or health-related conditions for which
an identified subgroup of the U.S. population is at risk. Thus, ovarian
cancer in women would clearly be an appropriate subject of a health
claim.
2. Components of Food Within the Context of a Daily Diet
The preliminary requirement that a substance that is to be the
subject of a health claim must be a food appears in Sec. 101.14(b)(2)
and (b)(3)(i). If the substance is present at decreased dietary levels,
under Sec. 101.14(b)(2), it must be a nutrient that is required to be
included in nutrition labeling (e.g., cholesterol, total fat). If the
substance is present at other than decreased dietary levels, under
Sec. 101.14(b)(3)(i), it: (1) Must contribute taste, aroma, or
nutritive value, or any other technical effect listed in Sec. 170.3(o),
to the food and (2) must retain that attribute when consumed at levels
that are necessary to justify a claim.
15. Numerous comments expressed concern about the aspect of the
preliminary requirement of Sec. 101.14(b)(3)(i) that requires that a
substance contribute taste, aroma, or nutritive value, or any technical
effect listed in Sec. 170.3(o), in view of the agency's definition of
``nutritive value'' in Sec. 101.14(a)(3). A number of these comments
characterized these provisions as an attack by the agency against
dietary supplements. Some comments asserted that the proposed
preliminary requirement would prohibit dietary supplements, especially
those containing herbs, from bearing health claims. Comments pointed
out that many herbs, such as garlic, are specially processed to remove
the flavor or odor from the final supplement product. A number of
comments explained that such supplements would fail to meet this
requirement because their beneficial effects on the body often are
derived from substances unique to the plant that do not promote growth,
replace loss of essential nutrients, or provide energy. A few comments
also noted that many herbs contain insignificant amounts of vitamins,
minerals, and other nutrients.
Some comments asserted that the adoption of any preliminary
requirement that would automatically disqualify herbal dietary
supplements from bearing health claims would undermine the intent of
Congress to establish a nondrug review process for health claims
involving herbs. These comments asserted that the 1990 amendments
clearly provide that herbal dietary supplements can be the topic of a
health claim. Furthermore, a comment asserted that the Court of Appeals
held in Nutrilab, Inc. v. Schweiker, 713 F.2d 335, 338 (7th Cir. 1983)
that some products, such as prune juice or coffee, may be consumed for
reasons other than taste, aroma, or nutritive value.
One comment asserted that all dietary supplements already meet the
this preliminary requirement. The comment noted that a substance to be
consumed at other than decreased dietary levels may also be shown to be
a food by contributing any technical effect listed in Sec. 170.3(o).
The comment stated that Sec. 170.3(o)(20) lists one of those technical
effects as nutrient supplementation and broadly defines a ``nutrient
supplement'' as ``substances which are necessary for the body's
nutritional and metabolic processes.''
FDA does not believe that it is overly restrictive to require, as
it does in Sec. 101.14(b)(3)(i), that a substance be a food or a
component of food for it to be the subject of a health claim. Section
403 of the act, which includes the health claims provisions, states,
``A food shall be deemed to be misbranded * * *'' (emphasis added).
Thus, section 403(r) of the act describes the circumstances in which a
food will, and will not be, misbranded if it bears a health claim. It
is therefore appropriate for the agency to make it incumbent on the
proponent of a health claim to demonstrate that the substance that is
to be the subject of the claim is a food or component of food.
FDA disagrees with the comments' interpretation of the Nutrilab
decision. As FDA explained in the preamble of the health claims final
rule (58 FR 2478 at 2499-2500), the Nutrilab court adopted a ``common
sense'' definition of ``food'' under section 201(f)(1) of the act:
``When the statute defines `food' as `articles used for food,' it means
that the statutory definition of `food' includes articles used by
people in the ordinary way most people use food--primarily for taste,
aroma, or nutritive value.'' Nutrilab, 713 F.2d at 338. Other courts
have followed suit. See United States v. Undetermined Quantities of
Cal-Ban 3000, 776 F. Supp. 249, 254-55 (E.D.N.C. 1991); American Health
Products Co. v. Hayes, 574 F. Supp. 1498, 1508-09 (S.D.N.Y. 1983),
aff'd, 744 F.2d 912 (2d Cir. 1984). By describing taste, aroma, and
nutritive value as the ``primary'' reasons for consuming food, the
Nutrilab court acknowledged that a food consumed for one of these
reasons might sometimes also be consumed for an additional purpose (713
F.2d at 338 (giving prune juice and coffee as examples of foods that
``may be consumed on occasion for reasons other than taste, aroma, or
nutritive value'')). Under Nutrilab, however, a substance whose uses do
not include taste, aroma, or nutritive value is not a food.
In Sec. 101.14(b)(3)(i), FDA incorporated this common sense
definition of food and the phrase ``or any technical effect listed in
Sec. 170.3(o),'' which reflects the fact that the definition of
``food'' in section 201(f)(3) of the act includes ``articles used for
components of food,'' as a preliminary requirement to ensure that a
substance that is to be the subject of a health claim is in fact a
food. This preliminary requirement is fundamental because both the
component of a food that is the subject of a health claim and a
component of a drug have a characterizable relationship to a disease.
Congress recognized this fact by creating an exception from section
201(g)(1)(B) of the act, in the definition of ``drug'' for foods that
bear a claim authorized under section 403(r) of the act. Thus, it is
crucial to the continuing viability of the act itself that the choice
of the test that determines whether a claim that characterizes the
relationship of a substance to a disease can be made be based on the
appropriate factors. Under the act, that choice turns in part on
whether the substance is a food. Therefore, FDA has reflected in
Sec. 101.14(b)(3)(i) the judicially recognized characteristics of a
food.
In this regard, interested persons should not presume that
inclusion of the phrase ``or any technical effect listed in
Sec. 170.3(o)'' in Sec. 101.14(b)(3)(i) means that substances that may
be classified within one or more of the categories of food additives in
Sec. 170.3(o) automatically meet this preliminary requirement. The
classifications within Sec. 170.3(o) are of a general nature to reflect
the uses to which food ingredients are put. All of the classifications
pertain to the effect of the ingredients on food (e.g., by affecting
the texture of the food) rather than on the human body. Only a
substance that is used for the technical effect in Sec. 170.3(o)(20),
that of a nutrient supplement, has the potential to have a useful
effect in the body because of the characteristics that cause it to be
used in the food. The ``nutrient supplement'' category includes
``Substances which are necessary for the body's nutritional and
metabolic processes.'' As the comments themselves recognized, not every
component of a dietary supplement has such an effect.
In view of the agency's broad, flexible definition of ``nutritive
value,'' FDA does not find any merit in arguments that the provisions
requiring that a substance be a food should be removed. To the
contrary, FDA believes that these provisions will benefit the public
health by allowing the agency to devote its limited resources for
review of petitions to those that are appropriate for consideration
under the health claim provisions of the act. Accordingly, FDA
considers these provisions essential elements under the framework that
it has created in its regulations for the regulation of health claims
and fully consistent with the act.
FDA disagrees with the comments' characterization of its actions as
an attack against dietary supplements. FDA believes that the combined
effect of Sec. 101.14(b)(3)(i), the preliminary requirement that a
substance be a food, and Sec. 101.14(a)(3), the definition of
``nutritive value,'' will not present dietary supplements with any
unreasonable barriers for agency evaluation of potential health claims
for components of these products. Without question, these provisions do
restrict health claims to effects on a disease or a health-related
condition resulting from the nutritive value of substances. However, as
one comment pointed out, the current definition of ``nutritive value''
in Sec. 101.14(a)(3) is broad enough to include the functions of most
dietary supplements.
One observation that might bear making in this context is that
Congress has given the agency a statutory structure with which to deal.
In relevant part, that structure divides the world of substances that
have a relationship to disease into foods and drugs. Congress placed
the health claims provisions on the food side of the ledger. FDA is
charged with implementing those provisions in accordance with the act
and applicable legal precedents. FDA has announced its intention to
implement the health claim provisions as flexibly as possible, but at
some point the agency simply cannot be as flexible as some of the
comments have suggested. At that point, the agency would start to erode
the scheme that the statute has established for drugs. The agency
cannot do that. If Congress intended something that goes beyond the
scheme that FDA has established in these final regulations, then what
is required is a change in the law itself.
16. Many comments objected to the aspect of Sec. 101.14(b)(3)(i)
that requires that a substance retain its food status (i.e., its
nutritive value) when consumed at levels that are necessary to justify
a claim. Almost all concern was directed toward consumption of
substances at levels significantly higher than those present in the
daily diet. Some comments urged FDA to evaluate proposed health claims
involving relatively high levels of nutrients on the grounds that
categorically prohibiting them would deny Americans beneficial
information rather than educating them on how to alter their diets to
achieve optimal health. Other comments stated that FDA's categorical
refusal to evaluate such health claims because of the nutrient levels
involved would directly violate both the Proxmire Amendment and the
congressional intent behind the 1990 amendments. These comments noted
that the 1990 amendments provide for the appearance of health claims on
foods and stated that, subject to certain conditions, the Proxmire
Amendment's prohibition against regulating a vitamin supplement as a
drug ``solely because it exceeds the level of potency which the
Secretary determines is nutritionally rational or useful'' guarantees
the regulation of vitamins as foods regardless of the levels of
nutrients that they supply. The comments also stated that Congress
envisioned the approval of such health claims, as it was aware that
dietary supplements substantially in excess of the U.S. RDA's were
routinely being consumed by Americans, and it chose to direct that FDA
conduct a review of antioxidant vitamins/cancer claims with dietary
supplements in mind. Other comments further asserted that FDA was
attempting to circumvent the Proxmire Amendment and create maximum
potency levels for all supplements by establishing an upper limit for
``nutritive value.''
FDA does not agree that any conflict with section 411 of the act is
presented by a requirement that, to be the subject of a health claim,
the substance must be a food, that is, consumed primarily for its
taste, aroma, or nutritive value. There is nothing in the health claims
final rule or in the regulations established by this document that will
affect in any way the availability of dietary supplements or consumers'
freedom to choose to purchase them. Rather, the regulations that FDA is
establishing are intended to ensure that any health claims that may be
made for dietary supplements are scientifically valid. This is what
section 403(r)(5)(D) of the act directs FDA to do.
Nothing in these regulations would necessarily prevent a supplement
from bearing a health claim when it contains a level of a substance
that exceeds the level achievable in the context of the daily diet. To
the contrary, the final rule concerning calcium and osteoporosis, for
example, which was published in the Federal Register of January 6, 1993
(58 FR 2665), permits a calcium health claim for dietary supplements
and requires only that the supplement labeling advise consumers, in
appropriate circumstances, that there is no known benefit from
consuming more than 200 percent of the recommended daily intake for
calcium.
Section 411 of the act does not authorize health claims for dietary
supplements or in any way affect FDA's authority under section
403(r)(5)(D) of the act to regulate such claims. Under section
411(a)(1)(B) of the act, FDA may not classify a dietary supplement as a
drug solely because it contains a vitamin or mineral at a level that
exceeds the level of potency that the agency determines is
nutritionally rational or useful. Nothing in these proposed regulations
would do so. Absent a claim, FDA will not consider a dietary supplement
to be a drug because it contains vitamins or minerals at levels above
those normally found in food. However, a claim on a product is an
indication of the product's intended use. If a claim reveals that the
product is intended for a use other than for its taste, aroma, or
nutritive value, then nothing in section 411 of the act would require
that it be treated as a food.
17. Many comments addressed the circumstances under which dietary
supplements should be considered drugs. A number of these comments
referred to the following agency statement in the health claims final
rule (comment 49, 58 FR 2478 at 2501):
A product that is intended for medicinal effects, that is,
intended for use in the diagnosis, cure, mitigation, treatment, or
prevention of disease, is a drug and not a food. Thus, there is no
basis under the act for FDA to permit health claims for herbs whose
only known use is for medicinal effects. Health benefits of such
herbs may appear in the labeling only in accordance with the drug
provisions of the act.
Although a few comments agreed with this statement, many comments
expressed categorical opposition to the classification of any herbs or
other dietary supplements as drugs. While most of these comments did
not offer reasons in support of their position, one comment expressed
concern that such a policy would be grounds for FDA to categorically
ban all such supplements as unapproved new drugs. Several comments
noted that many herbs have traditionally been used both as foods and
drugs and asked for assurance that FDA would not automatically regulate
such herbs as drugs. Other comments argued that herbs should always be
regulated as foods where they are consumed for their nutritive value.
Some comments stressed that intended use, as stated on its
labeling, should be the determinative factor in deciding whether a
supplement should be regulated as a food or as a drug. As an example,
one of these comments stated that a supplement marketed for a specific
therapeutic use (e.g., a vitamin C tablet sold to cure cancer) is
appropriately regarded as a drug, while a supplement sold to be taken
over a period of time to reduce the risk of developing a disease (e.g.,
a vitamin C tablet sold to be taken daily to reduce the risk of cancer)
should be regulated as a food. The comment asserted that this approach
is consistent with FDA's determination that a supplement containing
large amounts of niacin should be regulated as a drug when consumed to
lower serum cholesterol. Another of these comments emphasized that a
consumer's use of a legally labeled product should not have any weight
in determining whether that product is a drug. As an example, the
comment noted that FDA does not regulate either fiber or water as a
drug as long as their labeling does not bear drug claims, even though
consumers may use them to facilitate bowel movement or to prevent,
mitigate, or treat dehydration, respectively.
A few comments suggested that FDA determine whether a substance is
a food or a drug by its chemical composition. The comments asserted
that while the boundary between drugs and supplements is fuzzy at
times, drugs are typically synthetic molecules that are of a unique and
patentable nature, while dietary supplements consist of natural,
nonpatentable materials.
Another comment stated that FDA should exempt substances taken to
treat a symptom of a disease from regulation as drugs, as the act
defines as drugs only those substances used in the diagnosis, cure,
mitigation, treatment, or prevention of the disease itself.
Earlier in this preamble, FDA explained that these regulations do
not affect the availability of dietary supplements. Again, these
regulations affect only the food label and food labeling. FDA has no
intention of banning all dietary supplements of herbs or similar
substances as unapproved new drugs. FDA will carry out its
responsibility to regulate inappropriate claims, but the agency will
not attempt to restrict the sale of dietary supplements to consumers
unless the supplements present safety concerns.
With respect to the specific words for use in labeling statements,
FDA advises that statements that a product may be effective in the
cure, mitigation, treatment, or prevention of disease will make the
product a drug. However, statements that a product may reduce the risk
of developing a disease or health-related condition may, or may not,
make the product a drug. Exactly how a substance-disease relationship
is to be characterized is one of the issues that the agency will
address in deciding whether to authorize a health claim and how to
ensure that the claim describes the significance of the substance in
affecting the disease or health-related condition. FDA points out that
as a general matter, merely using terms such as ``reduce the risk''
instead of ``prevent'' will not automatically make a claim a health
claim and not a drug claim. FDA will make a case-by-case assessment
based on all relevant factors in determining whether a claim is
appropriately subject to the health claims regime. The agency also
agrees that the main focus in deciding whether a product is subject to
regulation as a food or a drug is the intent of the vendor and not how
consumers use the product (although how consumers understand claims
that are made can be used to determine vendor intent).
FDA advises that there is no provision in the act for the agency to
exempt statements about symptoms of disease from causing products to be
regulated as drugs. Although such statements may not be claims that the
product will treat the disease that causes the symptoms, the statements
clearly pertain to the mitigation of disease by addressing the symptoms
caused by the disease. Section 201(g)(1)(B) of the act provides, in
part, that articles intended for use in the mitigation of disease are
drugs. Similarly, there is no provision in the act for FDA to exempt
natural, nonpatentable materials from the definition of a drug in
section 201(g) of the act.
FDA advises that it not true that all natural materials are not
drugs. It has been estimated that about 25 percent of the drugs
currently prescribed by physicians are plant compounds, and that an
additional 25 percent are related to plants. Therefore, fully half of
the drugs commonly used can be considered plant derived. Such commonly
used drugs as digitalis, aspirin, quinidine, atropine, and hundreds of
others were once considered herbals. Thus, the agency finds that it
cannot rely on the distinction of whether a product is natural or
synthetic in deciding whether it is a food or a drug.
3. Safety
Section 101.14(b)(3)(ii) provides that, to justify a claim for a
substance that is to be consumed at other than decreased levels, the
substance must be a food or a food ingredient or a component of a food
ingredient whose use at the levels necessary to justify a claim has
been demonstrated by the proponent of the claim, to FDA's satisfaction,
to be safe and lawful under the applicable food safety provisions of
the act.
The preamble of the dietary supplement health claims proposal (58
FR 33700 at 33709) explained:
* * * This showing can be based on: (1) A demonstration that the
substance is generally recognized as safe (GRAS) within the meaning
of Sec. 170.30; (2) a listing of the substance as GRAS in 21 CFR
Part 182 or as affirmed as GRAS in 21 CFR Part 184; (3) a food
additive regulation; or (4) a sanction or approval granted by FDA or
the United States Department of Agriculture prior to September 6,
1958. If the safety and lawfulness of the substance is not expressly
recognized in an FDA regulation, the burden will rest on the claim's
proponent, as a prerequisite to FDA's evaluation of the health
claim, to submit all the scientific data and other relevant
information required to demonstrate safety and lawfulness in
accordance with applicable petition requirements. FDA will withhold
review of the health claim until it is satisfied on these points.
18. Many comments objected that the proposed safety provisions are
unreasonable. A few of these comments specifically asserted that herbal
supplements would almost universally fail the proposed safety
requirements because most herbs are not GRAS for use as a dietary
supplement, are not approved food additives, and are not the subject of
prior sanctions or are the subject of prior sanctions that have been
waived. Furthermore, the comments complained that FDA's process for
acting on GRAS affirmation petitions is notoriously slow and extremely
costly. The comments maintained that the proposed safety requirements
would discourage manufacturers from submitting health claim petitions
for dietary supplements, would delay the approval of such petitions,
and could well amount to a total ban on health claims for certain
dietary supplements. The comments suggested that FDA require safety
determinations only for those substances with no history of safe use
and provide that the absence of known safety problems will be
sufficient proof of safety for substances with a long history of use.
Other comments urged FDA to be flexible in its determination of
safety for substances in dietary supplements. A number of these
comments stressed the importance of FDA recognizing that safety can be
determined solely through the historical use of such substances. Some
of the comments noted that many components of supplements, particularly
herbs, have been used for hundreds or thousands of years without safety
problems. The comments also noted that herbs are used safely throughout
three-fourths of the world as a principal means of medicine. The
comments declared that regulatory authorities in Great Britain,
Germany, Japan, and many other nations have researched various herbal
supplements and found them to be safe when consumed at the levels of
use likely to be contemplated under a health claim petition. One
comment also noted that information concerning accurate dosage,
indications, contraindications, and quality control measures are also
available in past editions of the U.S. Pharmacopeias and National
Formularies. These comments urged FDA to accept all relevant data on
the safe use of herbal dietary supplements, including foreign studies
and monographs that evidence the safety of these products. One comment
declared that FDA is legally bound to consider evidence involving herb
usage outside the United States when reviewing the safety of herbs.
One comment asserted that FDA should evaluate the safety of
vitamins and minerals in terms of their effect on the normal population
and not on those consumers with unusual conditions or sensitivities.
The comment acknowledged that such consumers need clear label
ingredient statements as well as education on foods to deal with their
problems. The comment asserted, however, that these consumers should be
held responsible for some degree of self-protection. The comment
maintained that this approach is consistent with the agency's policy on
persons with allergies to food components. A few comments asserted that
the safety of a dietary supplement should be defined in terms of
whether or not harm may occur under the conditions of use defined by
the supplement's labeling, rather than in terms of an arbitrary cutoff
such as the RDI. The comment maintained that a systematic review of all
components of dietary supplements is not necessary and suggested that
the agency undertake safety reviews on a case-by-case basis where it
believes a potential safety concern might exist.
Several comments asserted that FDA is not equitable in its concern
for the safety of dietary supplements as compared to the safety of
other products regulated by the agency. Some comments asserted that the
safety record of dietary supplements is far better than many FDA-
approved food additives such as aspartame, against which, according to
the comments, the agency receives and ignores thousands of consumer
complaints annually. Other comments asserted that FDA's intense
interest in the safety of products would be better focused on
prescription drugs, which are responsible for over 1/2 million deaths
annually as compared to the no or few deaths attributable to the
consumption of dietary supplements.
However, several comments supported FDA's proposal to require that
petitioners for a health claim for a substance in a dietary supplement
demonstrate that the substance is safe and lawful. The comments agreed
with the agency that such a requirement is implicit in the act, and
that the labeling law in no way diminishes FDA's responsibility to
ensure the safety of foods.
FDA concludes that the preliminary requirement that the safety of a
substance be demonstrated should apply to substances in dietary
supplements in the same manner that it applies to substances in foods
in conventional food form. The amendment to the act enacted by the 1990
amendments cannot be implemented independently of the remaining
portions of the act (see section 9 of the 1990 amendments). The act
must be considered as a whole, and FDA's responsibility for ensuring
the safety of foods is explicitly provided for in other sections of the
act (see sections 201(s), 402(a)(1) and (2), and 409 of the act).
As the agency explained in the dietary supplement health claims
proposal, the fact that the act contains such explicit safety authority
is particularly significant because the agency will be specifically
authorizing the health claims that will be made. In view of this
affirmative action, FDA authorization of a health claim places the
agency's imprimatur on the claim. Moreover, the claim will encourage
consumption of the substance. It would be a violation of the agency's
responsibility under the act to authorize a health claim about a
substance, whether it be in a dietary supplement or in food in
conventional food form, without being satisfied that the use of the
substance is safe. Certainly, FDA would have almost no assurance that
it would be protecting the public health if it permitted, as some
comments suggest, all substances except those that are actually known
to cause safety problems to be the subject of health claims. It would
be a great and tragic irony if substances that were the subject of
health claims because of one effect caused injury because of another.
This is the situation
FR Doc. 93-31815 Food Labeling; General Requirements for Health Claims for Dietary Supplements
that Congress sought to avert by including
section 403(r)(3)(A)(ii) in the act. FDA's preliminary requirement is
fully consistent with the principles that underlie that section.
The fact that some herbs and other ingredients of dietary
supplements have been used for thousands of years does not necessarily
justify a conclusion by FDA that their use under all conditions is
safe, but it may. First, FDA needs a basis for concluding that such use
was in fact without harmful effect. Second, FDA needs a basis for
concluding that consumption of ingredients in a supplement carrying a
health claim would be in amounts comparable to those consumed safely in
the past. The proponents of claims for such substances are certainly
free to demonstrate that the use of those substances is generally
recognized as safe based on their common use in food prior to 1958. The
agency notes, however, that the use of many of these substances has
been primarily as a drug, tonic, or folk remedy, rather than as food
(see 53 FR 16544 at 16545; May 10, 1988). This fact is confirmed by
some of the comments summarized above. As drugs, the levels and
frequency of use of these substances may have been significantly
different than the levels and frequency of use that will result from
their use as foods. Although the agency will consider evidence
involving herb usage outside the United States, FDA still needs to
review data on the identity of the substance, the safety of the
substance, the use of the substance in food, the context of its use,
and the frequency of use in the country where use of the substance
occurred (see 50 FR 27294 at 27295, July 2, 1985). Evidence that
another country has studied the safety of an herbal supplement and
found it to be safe would certainly be relevant and should be submitted
to FDA. It is important, however, that as much of the evidence that
provided the basis for the country's determination as is possible be
submitted to FDA.
Although formal recognition of safety by FDA admittedly can be
lengthy and expensive, such formal recognition is not required under
this preliminary requirement. In responding to concerns raised by
comments suggesting that FDA recognize manufacturers' private GRAS
determinations, the agency stated in the health claims final rule the
following concerning Sec. 101.14(b)(3)(ii) (58 FR 2478 at 2502 through
2503):
FDA acknowledges that the GRAS affirmation and food additive
listing process can be lengthy. Thus, FDA designed
Sec. 101.14(b)(3)(ii) to provide flexibility with respect to the
type of showing of safety that is necessary to make a substance
eligible to be the subject of a health claim. GRAS affirmation and
food additive listing are but two of the procedures by which a
substance may meet this preliminary requirement.
FDA intends to consider the basis of manufacturers' independent
GRAS determinations where such determinations are submitted with
petitions for health claims and may use its discretion to accept,
without formal affirmation, the independent determination of GRAS where
FDA believes that such action would be appropriate. As FDA pointed out
in the previous comment, however, the agency would not be fulfilling
its responsibilities under the act if it were to permit a substance to
be the subject of a health claim without satisfying itself that the use
of that substance is safe.
Although FDA will consider all manufacturers' independent GRAS
determinations where the basis for such determinations are submitted
with petitions for health claims, the agency advises that it will
generally not be possible for FDA to judge whether GRAS
determinations based on complex scientific evidence are valid within
the short timeframes mandated under the 1990 amendments for health
claims petitions. Instead, agency agreement with an independent
determination that a substance is GRAS will be most likely where the
substance is an ingredient, or a component of a food ingredient,
that was in common use in food prior to January 1, 1958, in a
similar context. However, where such agreement occurs, the agreement
does not constitute GRAS affirmation. Instead, the history of common
use in food, coupled with the fact that FDA knows of no reason to
question the safety of the food ingredient, means that the substance
will be treated as if it is an unlisted GRAS substance (as provided
for in Sec. 170.30(d) and 182.1(a) (21 CFR 170.30(d) and 182.1(a)))
in the manner provided for in the food ingredient list in 21 CFR
Part 182.
(58 FR 2478 at 2503.)
Under this final rule, this statement is fully applicable to
substances in dietary supplements. The agency believes that this policy
on independent determinations that a substance is GRAS demonstrates
that FDA will be flexible in assessing conformance with the safety
preliminary requirement.
FDA disagrees with assertions that the agency should evaluate the
safety of dietary supplements in terms of only the normal population.
It would be unconscionable for the agency to adopt a policy of ignoring
adverse effects, some of which could be life-threatening, of any foods,
including dietary supplements, on vulnerable segments of the
population. Furthermore, there is no basis under the act for such a
policy. FDA does attempt, however, to find the most practicable
solutions to assuring consumers of a safe food supply. For example, the
agency generally does not base safety decisions on atypical population
subgroups that will use the product. Where there are subgroups of
consumers (e.g., consumers with certain sensitivities) that could
suffer adverse effects from consuming the product, FDA may place
certain restrictions on the use of the product or rely on labeling
solutions (such as those the agency has used for sulfiting agents and
yellow 5) as a condition for its safe use, rather than denying the
availability of the product to the entire population.
Thus, for all the foregoing reasons, FDA is making health claims
for substances in dietary supplements, like claims for any other food,
subject to Sec. 101.14(b)(3)(ii).
C. Scientific Standard
19. Many comments expressed concern that FDA would apply the term
``significant scientific agreement'' in an unreasonable manner by
demanding too much supporting evidence on substance/disease
relationships before approving health claims.
Several comments insisted that FDA is misinterpreting the
requirements for the scientific standard for food in conventional food
form as well as for dietary supplements. The comments asserted that the
law does not require that there be significant scientific agreement
that a nutrient/disease relationship has been conclusively established,
but only that the statements made in a claim be supported by the
available evidence. As an example, one of the comments asserted that
the requirements of the law would be fully met by a properly qualified
label claim such as, ``Although no scientific consensus has been
established, several clinical studies suggest that daily consumption of
Vitamin C as part of a well-balanced diet may reduce the frequency of
colds.'' A number of comments asserted that the standards for
authorizing health claims on foods are more stringent than those
authorizing the use of drug claims. Several comments argued that FDA is
being unduly restrictive by requiring that manufacturers perform
expensive randomized, double-blind, placebo-controlled tests to prove
the validity of a claim under the proposed regulations. These comments
stated that such requirements would deter manufacturers from seeking
new uses for herbs and other substances used in dietary supplements.
The comments maintained that a more lenient standard would encourage
manufacturers to engage in research to develop more healthful products.
The comments further asserted that the disparate treatment of foods and
drugs is especially unfair when the enormous difference in safety
factors between dietary supplements and untested prescription drugs is
considered.
Some of the comments asserted that FDA had not been fair to date in
its evaluations of health claims under this standard. One of these
comments asserted that FDA had approved only four of the ten
congressionally-proposed health claims, not seven, as FDA claimed in
the preamble to the proposed regulations.
Some comments maintained that FDA should not require a unanimous or
near-unanimous consensus among experts in order to find that there is
``significant scientific agreement'' concerning a claim. A few of the
comments pointed out that the legislative history of the 1990
amendments clearly indicates that such a level of agreement is not to
be required. Other comments urged that FDA consider the requirement for
``significant scientific agreement'' to be satisfied as long as there
is agreement among a majority of scientists familiar with the research
in a given area. These comments noted that Commissioner Kessler offered
testimony supporting this interpretation before the U.S. House of
Representatives Subcommittee on Health and the Environment. Other
comments maintained that the requirement for ``significant scientific
agreement'' only requires agreement among a significant number of
qualified experts. One of these comments requested that FDA include a
provision in the regulations that the standard of ``significant
scientific agreement'' is not one of unanimity to prevent confusion
among manufacturers and consumers. A few comments asked that FDA's
regulations include a provision that guarantees that ``significant
scientific agreement'' will be considered to have been achieved when a
credible health authority, particularly an agency of the U.S.
Government, recommends the consumption of a nutrient because of its
relationship to a disease or health-related condition.
One comment suggested that FDA not use the phrase ``significant
scientific agreement'' to evaluate proposed health claims, despite its
inclusion in the language of the 1990 amendments, because the meaning
of the phrase is ambiguous. The comment suggested that FDA should
simply consider the totality of publicly available scientific evidence
to determine whether or not a particular health claim can be justified.
FDA disagrees with assertions that it is conducting validity
assessments for health claims in an unduly restrictive manner. FDA does
not require that manufacturers perform controlled clinical trials to
prove the validity of a claim. To the contrary, as discussed in the
health claims final rule (58 FR 2478 at 2506), the scientific standard
for health claims is less stringent than the requirements for approval
of a new drug. In the case of a new drug, section 505(d)(5) of the act
(21 U.S.C. 355(d)(5)) states that the Secretary shall refuse to approve
an application for approval of such a drug where there is a lack of
substantial evidence that the drug will have the effect that it
purports or is represented to have under the conditions of use
prescribed, recommended, or suggested in the proposed labeling thereof.
Section 505(d) provides further that the term ``substantial evidence''
means evidence consisting of adequate and well-controlled
investigations, including clinical investigations (human studies
conducted in a controlled clinical setting), by experts qualified by
scientific training and experience to evaluate the effectiveness of the
drug involved. (The statutory term ``substantial evidence'' should not
be confused with the same term used by some comments to refer to ``more
than a scintilla and less than a preponderance'' of evidence.) Based on
this statutory direction, the agency has identified a number of
characteristics that are present in ``adequate and well-controlled''
studies in Sec. 314.126 (21 CFR 314.126).
Section 101.14(c) of FDA regulations does not mandate requirements
as stringent as those for drugs in section 505(d)(5) of the act.
Section 101.14(c) contains no mention of ``substantial evidence,''
``adequate and well-controlled investigations,'' or of ``clinical
investigations.'' To the contrary, Sec. 101.14(c) contains more
flexibility than the drug provisions of the act because it provides FDA
with authority to authorize claims based on ``scientific evidence
(including evidence from well-designed studies conducted in a manner
which is consistent with generally recognized scientific procedures and
principles), that there is significant agreement among experts
qualified by scientific training and experience to evaluate such
claims, that the claim is supported by such evidence'' (section
403(r)(3)(B)(i) of the act).
Consistent with this flexibility, FDA did not prescribe a specific
set, type, or number of studies as being sufficient to support a health
claim in the health claims final rule that applied to food in
conventional food form. In that rule, the agency advised (58 FR 2478 at
2506) that it would consider all relevant data on a topic, including
clinical studies, epidemiological data, and animal studies.
In addition, the 1990 amendments directed FDA to consider 10
nutrient-disease relationships. In the January 6, 1993, final rules,
FDA authorized claims with respect to seven of those 10 relationships
(see 58 FR 2537, 2552, 2622, 2665, 2739, 2787, and 2820). In addition,
FDA has recently proposed to authorize claims concerning an eighth,
folic acid and neural tube defects (see 58 FR 53254, October 14, 1993).
FDA believes that these approvals demonstrate that it is not conducting
validity assessments for health claims in an unduly restrictive manner.
FDA agrees that the legislative history of the 1990 amendments
makes clear that Congress did not intend, in calling for significant
scientific agreement about the support for a claim, to require that
such agreement represents a full consensus among scientists. The House
Report (Ref. 1) states:
* * * the standard does not require that there be a unanimous
agreement among experts. Instead there must be a significant
agreement among experts, but it does not require that every expert
in the field approve or agree with the claim.
The agency shares the comments' concern that a requirement of
consensus would mean that some valid health claims would not be
authorized and, by restricting such claims, would counter Congress'
intent that health claims supported by a significant scientific
agreement be made available to consumers. The agency never intended to
require that claims be supported by a consensus among scientists and
has not done so.
The agency is sensitive to the comments' perception that the
scientific standard, particularly the phrase ``significant scientific
agreement,'' is subjective. The agency believes, however, that any
standard involving the evaluation of scientific evidence and opinions
derived from that evidence must be somewhat subjective. FDA, in
proposing not to define ``significant agreement'' among experts in the
November 27, 1991 (56 FR 60537 at 60548) proposal, noted that each
situation may differ with the nature of the claimed substance/disease
relationship. The agency believes that in deciding whether significant
scientific agreement about the validity of a claim exists, it is
necessary to consider both the extent of agreement and the nature of
the disagreement on a case-by-case basis.
The House Report (Ref. 1) makes clear that Congress intended the
``significant scientific agreement'' standard to be a flexible one by
pointing out that, in reviewing scientific studies, FDA may give
greater weight to the studies that it finds more persuasive. The House
Report also clarifies that the overriding consideration in assessing
whether to authorize a claim should be the Secretary's level of comfort
about the validity of the claim. The agency believes that this
clarification provides clear guidance for the application of the
standard, and thus it is not incorporating the changes requested by the
comments in the codified language of the regulations.
FDA does not believe it has in any way been unfair in its approval
of health claims to date. Earlier in this preamble in response to
comment 2, FDA explained why certain specific health claims were not
approved. Nevertheless, the agency's statement in the dietary
supplement health claims proposal that it had authorized claims on 7 of
the 10 nutrient-disease relationships is correct. In the case of 3 of
the relationships, however, the claims were authorized for foods rather
than specific nutrients. In these cases, as explained previously,
although there was sufficient evidence to attribute certain disease
risk reductions to the consumption of certain foods, and those foods
are marked by significant levels of the nutrients in question, there
was insufficient evidence to attribute any disease risk reduction
directly to consumption of the nutrients themselves.
FDA does not agree that it should define ``significant scientific
agreement'' as agreement among a majority of scientists familiar with
the issues. Commissioner Kessler's statements about significant
scientific agreement being 50 or 60 percent agreement were intended to
show the contrast between this term and the term ``consensus,'' not to
provide a specific definition of ``significant scientific agreement.''
There is simply no bright line that FDA can draw in this area.
Ultimately, the agency must exercise its scientific judgment, arrived
at after input from the scientific community.
The agency does not agree that significant scientific agreement
should be considered to have been achieved when a credible health
authority, particularly an agency of the U.S. Government, recommends
the consumption of a nutrient because of its relationship to a disease
or health-related condition. While FDA recognizes the significance of
such recommendations, Congress charged FDA with the responsibility of
authorizing health claims on the food label and labeling. Nonetheless,
the agency is mindful of the admonition in section 403(r)(4)(C) of the
act that reads: ``If a petition for a regulation under subparagraph
(3)(B) relies on a report from an authoritative scientific body of the
United States, the Secretary shall consider such report and shall
justify any decision rejecting the conclusions of such report.''
Accordingly, FDA is retaining the requirement for ``significant
scientific agreement'' in this regulation.
20. Many comments applauded the agency's determination not to
underrate any scientific evidence on the basis of its cultural or
geographic origin. One of these comments noted that the United States
is one of the most ethnically diverse nations in the world and stated
that a study done anywhere in the world is likely to be relevant to at
least one U.S. subpopulation. A few of these comments noted that some
of the studies done on herbal dietary supplements have been conducted
under foreign drug protocols and requested assurance that FDA would
consider such data to be part of the publicly available scientific
evidence supporting prospective health claims. Another of these
comments asserted that the ``totality of publicly available scientific
evidence'' should include not only ``well designed studies'' but also
ethnobotanical and other traditional usage information which is often
available for herbs and other dietary supplements.
The agency reaffirms its commitment to consider any evidence
submitted in support of the scientific merits of a claim and in the
context of the totality of available evidence. FDA will not underrate
any study on the basis of its cultural or geographic origin. Evidence
in support of a proposed health claim, however, will attain value in
direct proportion to the significance in the U.S. population of the
effects of the substance in question on the disease or health-related
condition addressed by the claim (see Sec. 101.14(b)(1)). Also, the
agency advises that it will consider ethnobotanical and other
traditional usage information. However, the agency points out that
under Sec. 101.14(c), the evidence must provide the basis for
significant scientific agreement that the claim is valid.
D. General Labeling Requirements
In the health claims final rule, FDA established a number of
general requirements for health claims for food in conventional food
form in Sec. 101.14(d) to ensure that consumers are provided with valid
and reliable information about the value that ingestion (or reduced
ingestion) of a particular substance, as part of a total dietary
pattern, may have in affecting certain diseases or health-related
conditions.
In the dietary supplement health claims proposal, the agency
proposed that dietary supplements be subject to the same general
requirements that it has established for food in conventional food form
in Sec. 101.14(d). The agency advised that specific references to
dietary supplements in Sec. 101.14(d) are not necessary because FDA's
revision of Sec. 101.14(a)(2), the definition of the term
``substance,'' to include components of dietary supplements will link
dietary supplements to the health claim for which Sec. 101.14(d)
prescribes general requirements.
1. FDA Authorization of Valid Claims
Section 101.14(d)(1) provides that when FDA determines that a
health claim is valid, the agency will propose a regulation in Subpart
E of Part 101 to authorize the use of the claim. Further, the provision
states that if the claim pertains to a substance not provided for in
Sec. 101.9, FDA will propose to amend that regulation to include
declaration of the substance. To ensure that the provisions established
in Sec. 101.14(d)(1) apply equally to all forms of dietary supplements,
the agency proposed in the dietary supplement proposal to revise
Sec. 101.14(d)(1) to reference, in addition to Sec. 101.9, the
provisions of Sec. 101.36 (21 CFR 101.36), which establish requirements
for the nutrition labeling of dietary supplements of vitamins and
minerals.
FDA received no comments requesting changes in this aspect of the
proposal. Therefore, the agency is adopting this section as proposed.
2. General Requirements
Section 101.14(d)(2) requires that health claims on foods in
conventional food form: (1) Be consistent with the specific authorizing
regulation for the claim; (2) be limited to describing the value that
ingestion (or reduced ingestion) of the substance, as part of a total
dietary pattern, may have on a particular disease or health-related
condition; (3) be complete, truthful, and not misleading; (4) contain
all required information for that claim in one place without other
intervening material (except that the principal display panel (PDP) of
the label or labeling may bear a reference statement such as ``See
attached pamphlet for information about calcium and osteoporosis,''
with the entire claim appearing elsewhere on the other labeling); and
(5) enable the public to comprehend the information provided and to
understand the relative significance of such information in the context
of a total daily diet. If the claim is about the effects of consuming
the substance at decreased dietary levels, the level of the substance
in the food must be sufficiently low to justify the claim. For example,
if a definition for use of the term ``low'' has been established for
that substance, the substance must be present at a level that meets the
requirements for use of that term, unless a specific alternative level
has been established for the substance in the authorizing regulation.
If the claim is about the effects of consuming the substance at other
than decreased dietary levels, the level of the substance in the food
must be sufficiently high and in an appropriate form to justify the
claim. For example, if a definition for use of the term ``high'' for
that substance has been established, the substance must be present at a
level that meets the requirements for use of that term, unless a
specific alternative level has been established for the substance in
the authorizing regulation. (See Sec. 101.14(d)(2)(vii)(A) for
additional requirements where the food meets the ``high'' or ``low''
requirements based on its reference amount customarily consumed and the
labeled serving size differs from that amount. See
Sec. 101.14(d)(2)(vii)(B) for guidance about how a food can meet the
``high'' and ``low'' requirements where the food is sold in a
restaurant.)
In the dietary supplement health claims proposal, FDA proposed that
dietary supplements be subject to these requirements to ensure that
consumers are provided with scientifically valid, nonmisleading, and
reliable information about the value that ingestion of the particular
substance in the dietary supplement may have in affecting a disease or
health-related condition.
21. One comment stated that FDA should mandate that dietary
supplements bear health claims for which they are eligible in order to
promote public awareness of the benefits associated with those
supplements.
FDA does not believe that it is appropriate to adopt a general
policy requiring the inclusion of health claims on the labels of all
foods eligible to bear them. The agency notes that while the 1990
amendments provide for the appearance of health claims on the labels of
foods qualified to bear them, they do not make the appearance of those
claims mandatory.
FDA believes that many manufacturers will choose to include health
claims on the labels of qualified foods because of the marketing
benefit offered by their appearance. Because health claims provide
information regarding the benefits associated with the increased or
decreased dietary intake of various substances in the product rather
than information regarding the particular product itself, consumers
will be made aware of the benefits of consuming other foods that do or
do not contain the particular substance, even if a particular food
product does not itself bear the health claim.
22. One comment asserted that FDA should require manufacturers who
elect to craft their own health claims, rather than to use the model
claim verbatim, to secure agency approval for their claims with respect
to understandability.
FDA disagrees with this comment. Section 3(b)(1)(A)(vii) of the
1990 amendments prohibits FDA from requiring persons to secure agency
approval before placing a health claim on a product, provided that the
claim is in compliance with the applicable regulation authorizing the
health claim. The House Report (Ref. 1) states that this section
``makes it clear that the regulations will not require premarket review
of each claim; they will only require that the claim be consistent with
the terms and requirements of the regulations.'' The agency believes
that it is possible to paraphrase a model health claim while remaining
consistent with the terms and requirements of the regulations
permitting that claim. This position is similar to agency policy that
permits the use of terminology other than that established in a final
OTC drug monograph in labeling of an OTC drug product to describe
indications for use (51 FR 16258, May 1, 1986). Consistent with that
policy for OTC drug labeling, the agency believes that the goal of
ensuring scientifically valid, truthful, and nonmisleading labeling
without inhibiting effective consumer communication does not require
exclusive use of language in a model health claim. The model language
along with other requirements for a claim will, nevertheless, provide
the standard for measuring the accuracy of alternative language
developed by food manufacturers for their products because FDA has
included all mandatory labeling elements of a health claim in the model
claim. Of course, manufacturers should recognize that a health claim
that fails to convey all the mandatory elements of the claim will
subject a product to regulatory action.
3. Nutrition Labeling
Section 101.14(d)(3) requires that health claims on foods in
conventional food form must bear nutrition labeling in accordance with
Sec. 101.9 and 101.10 (21 CFR 101.9 and 101.10). In the dietary
supplement health claims proposal, the agency proposed to revise
Sec. 101.14(d) to reference Sec. 101.36 (21 CFR 101.36), in addition to
Sec. 101.9 and 101.10. In response to section 403(q)(5)(F) of the act
(formerly section 403(q)(5)(E)), Sec. 101.36 establishes requirements
for the nutrition labeling of dietary supplements of vitamins and
minerals.
FDA received no comments requesting changes in this aspect of the
proposal. Therefore, the agency is adopting this section as proposed.
E. Prohibited Health Claims
In Sec. 101.14(e) of the health claims final rule, FDA established,
for foods in conventional food form, a number of situations where
health claims are prohibited. In that paragraph, FDA provides that a
health claim may not be made on the label or in the labeling of a food
unless: (1) The claim is specifically provided for in authorizing
regulations in Subpart E of 21 CFR part 101; (2) the claim conforms to
all general provisions of Sec. 101.14, as well as to all specific
provisions in the authorizing regulation; (3) none of the disqualifying
levels identified in Sec. 101.14(a)(5) is exceeded in the food, unless
specific alternative levels have been established for the substance in
the authorizing regulation, and the labeling bears a statement that
complies with Sec. 101.13(h) highlighting the nutrient that exceeds the
disqualifying level; (4) no substance is present at an inappropriate
level as determined in the specific provision authorizing the claim in
Subpart E of 21 CFR part 101; (5) the label does not represent or
purport that the food is for infants and toddlers less than 2 years of
age except if the claim is specifically provided for in Subpart E of 21
CFR part 101; and (6) except for dietary supplements, the food contains
10 percent or more of the RDI or Daily Reference Value (DRV) for
vitamin A, vitamin C, iron, calcium, protein, or fiber before any
nutrient addition.
In the dietary supplement health claims proposal, the agency
proposed that dietary supplements be subject to the general
prohibitions that have been established for foods in conventional food
form in Sec. 101.14(e). The agency tentatively concluded that this
action was appropriate because these prohibitions: (1) Reflect the
statutory restriction in section 403(r)(1)(B) of the act that requires
that health claims be made in accordance with the provisions of section
403(r)(5)(D) for dietary supplements; (2) ensure that inappropriate,
unsubstantiated, and fraudulent health claims are not made; and (3)
reduce the potential for consumer confusion when confronted with a
situation in which there would be health claims for substances when
they are present in dietary supplements but not when they are present
in foods in conventional food form. The agency advised that specific
references to dietary supplements in Sec. 101.14(e) generally are not
necessary because FDA's proposed revision in Sec. 101.14(a)(2) of the
definition of the term ``substance'' to include components of dietary
supplements will bring dietary supplements within the coverage of
Sec. 101.14(e).
FDA did propose, however, to include a reference to dietary
supplements in the introductory sentence of paragraph (e) to clarify
that dietary supplements may be food. Specifically, FDA proposed to
insert the phrase ``regardless of whether the food is in conventional
food form or dietary supplement form'' into that sentence to make clear
that no expressed or implied health claims may be made on the label or
in labeling of any food unless the conditions in that paragraph are
met.
1. Claims Not Authorized By FDA
Section 101.14(e)(1) and (e)(2) prohibit the use on a food label or
in food labeling of any claim that expressly or by implication
characterizes the relationship of any substance to a disease or health-
related condition unless: (1) The claim is specifically provided for in
Part 101, Subpart E--Specific Requirements for Health Claims; and (2)
the claim conforms to all general provisions of Sec. 101.14, as well as
to all specific provisions in the appropriate section in subpart E of
21 CFR part 101.
23. A number of comments asserted that the marketplace is currently
saturated with hundreds of false and misleading claims, ranging from
rather innocuous statements to blatant claims concerning the treatment
of cancer, AIDS, heart disease, asthma, high blood pressure,
Alzheimer's disease, diabetes, and other diseases and health-related
conditions. One of these comments urged FDA to regulate as implied
health claims those brand names that imply that a product is useful in
preventing particular diseases. The comment asserted that an implied
health claim can be made by the inclusion of the name of a disease in a
brand name, as well as by label statements that slant the meaning of a
brand name toward disease prevention.
FDA realizes there are a number of misleading claims in use on
products. The agency reviews these claims as part of its regular
enforcement activities and takes action against such claims based on
such factors as the public health significance of the claim, how
clearly it violates the act, and the availability of agency resources.
24. A number of comments stated that manufacturers should be
allowed to include information on the traditional use of various
supplements on their labels. These comments noted that many other
countries allow supplement labels to indicate traditional uses of the
product, provided that the level of evidence supporting such use is
accurately represented. Many comments asserted that statements
concerning the safe usage of dietary supplements should not be
considered a health claim. The comments maintained that the exclusion
of such information from food labeling would endanger the public
health.
Dietary supplements that bear labeling that expressly or by
implication characterizes the relationship of any substance to a
disease or health-related condition will be subject to the provisions
of section 403(r) of the act. However, if the claim reveals that the
product is intended to be used in the diagnosis, cure, mitigation,
treatment, or prevention of a disease, as would likely be the situation
where the product is presented as an alternative to conventional drug
therapy, the product, like any other product that does so, is a drug
under section 201(g)(1)(B) of the act and subject to the requirements
for drugs in Chapter V of the act.
However, supplement manufacturers, like all other food
manufacturers, are welcome to submit health claim petitions that
establish the validity of claims that characterize the relationship of
a substance to a disease or a health-related condition in a manner that
is appropriate for a food. (See section III.G. of this document.) Any
such petition that shows that the preliminary requirements in
Sec. 101.14(b) and the scientific standard for a health claim in
Sec. 101.14(c) are met will provide the basis for a proposal to
authorize a claim in accordance with section 403(r)(4)(A)(i) of the
act.
In addition, FDA advises manufacturers of dietary supplements that
where a claim does not include one or both of the basic elements of a
health claim, it generally constitutes dietary guidance that may be
provided on the label or in labeling, so long as it is presented in a
truthful and nonmisleading manner.
25. One comment urged that FDA permit the appearance of preliminary
health claims on the labeling of a product other than its label. The
comment maintained that the 1990 amendments draw a clear distinction
between a product label and its labeling and noted that labeling has
much more room in which a manufacturer may sufficiently explain the
current state of scientific evidence regarding a preliminary claim.
FDA disagrees with this comment. Section 403(r)(1) of the act
clearly prohibits the appearance of health claims that are not made in
accordance with FDA regulations and that appear ``in the label or
labeling of the food (emphasis added).'' The agency's objections to
preliminary claims are fully discussed in this preamble in its response
to comment 4.
2. Additional Limits on Health Claims
In the health claims final rule (58 FR 2478 at 2534), FDA adopted
new Sec. 101.14(e)(6) to require consistency with dietary guidelines by
prohibiting health claims unless the food contains 10 percent or more
of the RDI or DRV for vitamin A, vitamin C, iron, calcium, protein, or
fiber per reference amount customarily consumed prior to any nutrient
addition. (A complete discussion of why these specific criteria were
selected appears in the preamble of that document (see 58 FR 2478 at
2521 through 2522).) This provision stresses the importance of
selecting foods so that dietary sources of calories are coupled with
sources of nutrients. This approach incorporates established levels of
significance for nutrients in food and is based on the amounts in foods
of certain nutrients required to be listed on the label as part of
mandatory nutrition labeling. As such, this approach applies to food in
conventional food form.
FDA specifically exempted dietary supplements from this
requirement. Such supplements are intended only to provide nutritive
value to the daily diet, and they make no pretense of serving as
substitutes for conventional food. (Nutrient supplements in
conventional food form are, however, intended to serve as substitutes
for conventional food.) As a result, it would not be logical to hold
such products to criteria designed to ensure consistency with dietary
guidelines for conventional food. A dietary supplement that meets the
qualifying criterion in Sec. 101.14(d)(2)(vii) and that does not
contain a nutrient at a disqualifying level specified in
Sec. 101.14(a)(5) possesses nutritive value for a health claim
irrespective of whether or not it may also provide calories.
Accordingly, in the dietary supplement health claims proposal, FDA did
not propose to make any change in the exemption for dietary supplements
from the provisions of Sec. 101.14(e)(6). For consistency with the
proposed definition of the term ``dietary supplement,'' however, FDA
proposed to revise the wording for this exemption to delete the phrase
``not in conventional food form'' because the definition of ``dietary
supplement'' states that such foods are not in conventional food form.
FDA received no comments requesting changes in this aspect of the
proposal. Therefore, the agency is adopting this section as proposed.
F. Applicability
In the health claims final rule, FDA established a provision in
Sec. 101.14(g) stating that the requirements for health claims in
Sec. 101.14 apply to foods intended for human consumption that are
offered for sale. In the dietary supplement proposal, FDA proposed that
dietary supplements also be covered by Sec. 101.14(g). FDA stated that
it had tentatively concluded that a reference to dietary supplements
was appropriate in paragraph (g) to clarify that dietary supplements
can be food. Specifically, FDA proposed to revise paragraph (g) as
follows:
Applicability. The requirements of this section apply to foods
intended for human consumption that are offered for sale, regardless
of whether the foods are in conventional food form or dietary
supplement form.
26. One comment asserted that FDA should allow health claims
authorized for use on dietary supplements to also appear on OTC drug
products that provide ``high'' levels of a particular nutrient, e.g.,
calcium-osteoporosis claims on calcium carbonate antacid tablets.
FDA received a comment similar to this one on the health claims
proposal. This comment provides no basis for the agency to provide a
different response to this comment than it did in the health claims
final rule.
As explained in the preamble of the health claims final rule (58 FR
2478 at 2500), multiple use products that are both foods and drugs
present a difficult set of competing concerns for the agency. Such
products are likely to be both an OTC drug and a dietary supplement.
Most OTC drug products are developed to address some type of acute
medical problem that is expected to be of short duration. If the
problem persists, it is important that the person with the problem know
that it may be more severe than he or she otherwise thought, and that
he or she should seek medical attention. Labeling on such products,
therefore, includes instructions to use the product for a limited
period of time and, if the problem persists, to seek medical
intervention. Thus, the time limits on use of the product are important
to the health of the users.
Dietary supplements, on the other hand, are developed for inclusion
in a daily diet at levels that are consistent with dietary use and may
often be consumed throughout most of a person's lifetime. Labeling on
dietary supplements contains no instructions for seeking medical
intervention or for limiting the duration of consumption of the
supplement. Rather, under the new regulations, dietary supplements will
be able to bear nutrient content and health claims, which focus the
consumer's attention on the advantages that consuming the product will
have in helping the consumer to maintain a healthy diet. Moreover,
where the supplement bears a health claim, the claim will contain
information about how long-term ingestion of the supplement may promote
health.
Where dietary levels and therapeutic levels differ (as is generally
the case and is in fact the case with antacids and calcium
supplements), an apparent conflict is created when both food and drug
labeling appear on the same product. In the case of the drug labeling,
consumers are given directions for use that involve high consumption
during a limited time period. In the case of the food labeling,
consumers are given directions for lower consumption with no time
constraints. Even though label instructions may identify those
directions for food and drug use in separate locations, FDA is
concerned that consumers will incorrectly assume that the therapeutic
dosage is appropriate for dietary use, and that the directions for food
use will undercut the warning in the drug labeling to seek medical care
if the condition persists. Where the labeling is not properly followed,
significant adverse consequences may result.
The agency knows of no broad approach that it can use to harmonize
a nutrient content claim or a health claim with drug labeling. A drug
that is labeled with instructions for use that both limit and do not
limit consumption would be misbranded under section 502(a) of the act
(21 U.S.C. 352(a)) if it failed to contain a material fact--that is,
how to reconcile these conflicting instructions.
However, FDA does not believe that it would be appropriate to
preclude such claims under all circumstances. Such claims may be
permissible if a firm can demonstrate that dual claims can be made in a
manner that will neither misbrand the product nor create a safety
problem. The agency suggests that anyone desiring to make a health
claim or a nutrient content claim that complies with section 403(r) of
the act on a product that is both a food and a drug contact the Center
for Drug Evaluation and Research, OTC Compliance Branch (HFD-312), FDA,
7500 Standish Pl., Rockville, MD 20855, to discuss whether it would be
possible to put such a claim on the product and still comply with the
drug provisions of the act.
G. Petitions
27. A number of comments urged FDA to streamline its procedures for
approving health claims in order that dietary supplement manufacturers
may include the most current, reliable information on their products.
The comments stated that the inclusion of such information is
critically important to dietary supplements because, unlike foods in
conventional food form, they are consumed only for the health benefits
associated with them. The comments specifically proposed that FDA add
the following paragraphs to Sec. 101.70(j):
(4) Final Rule. FDA will, within 120 days of the date of
publication of the proposed rule, issue a final rule authorizing or
prohibiting the requested use of the health claim.
(5) Expedited Action on certain petitions. If FDA determines
during its initial review of the petition that it accurately
represents the recommendations of any agency or department of the
U.S. Government with public health responsibilities, or of any other
public health organization that is recognized as a credible source
of information on diet and health, FDA will publish a proposed rule
authorizing the requested use of the claim no later than 60 days
from the date of receipt of the petition and will issue a final rule
no later than 60 days from the date of publication of the proposed
rule.
The comments maintained that new provision in paragraph (j)(4)
would correct an obvious oversight in the existing regulations, i.e.,
the establishment of a firm deadline for a proposed rule but no firm
deadline for a final rule. The comments also contended that paragraph
(j)(5) is necessary to address FDA's failure to act promptly to approve
claims that are based on the recommendations of public health
authorities, such as its failure to approve a health claim for folic
acid in accord with the recommendations of PHS agencies.
FDA advises that its failure to specify in Sec. 101.70(j) a
deadline for the publication of a final rule regarding the use of a
proposed health claim was not an oversight. Section 403(r)(4)(A)(i)
does not require that the agency adhere to any deadline for the
publication of a final rule. While FDA could establish such a timeframe
by regulation, it does not believe that the adoption of such a
requirement would be prudent. The comment period following the
publication of proposed rules is a critical step in determining whether
a proposed regulation is appropriate for adoption. In the instance of
health claim regulations, significant information concerning the
validity of the substance-disease relationship underlying the proposed
health claim may be submitted by interested parties during the comment
period. Also, the comment period may bring to light a previously
unforeseen potential for the use of a health claim, if adopted without
modification, to be misleading to consumers or to create serious
potential threats to the public health. The agency has no way to
guarantee that it will be able to adequately resolve such problems
within the suggested timeframe. In such instances, if faced with a
specific timeframe, FDA would be forced to either deny an otherwise
valid health claim petition, or to approve it without erecting the
regulatory framework that it believes necessary to ensure that the
public health is safeguarded. Therefore, FDA is not adopting the
suggested time limit on the issuance of a final rule. However, the
agency advises that it committed to issuing final rules on health claim
petitions as quickly as possible consistent with the issues presented
and the agency's available resources.
With respect to suggestions for shorter timeframes for certain
petitions, FDA advises that the agency's ability to meet timeframes is
influenced by many factors, such as work priorities and availability of
personnel. FDA considers the statutory timeframes for assessing the
validity of health claims and for issuing a proposed regulation to be
extremely short, given the need to evaluate the totality of available
scientific evidence on a substance and a disease or a health-related
condition. Given the agency's limited resources, it would not be
practicable to shorten these timeframes further. However, FDA points
out that although action on petitions for most claims will require
virtually all of the time provided by the statutory timeframes, nothing
would prohibit the agency from acting in less time than the timeframes
provide if it is possible to do so. Thus, it is likely that a petition
for a claim on a well-accepted substance/disease relationship would be
reviewed more expeditiously than one for which scientific agreement is
not as clear.
28. A few comments urged FDA to consider the limited label space
available on many dietary supplements in developing model health
claims. The comments stated that concise model claims will provide
guidance to manufacturers on how to convey health claims in succinct
statements that comply with all of FDA's requirements and will thus
help ensure that the health claims presented to consumers are clear and
comprehensible.
FDA realizes that there is a limit to the amount of information
that can be presented on a food label. However, the agency believes
that it must ensure that consumers understand that factors other than
dietary intake of the nutrient may bear on the substance-disease
relationship. Given the imperative of ensuring consumer understanding
of a message that must be presented in a very limited space, the agency
is faced with the difficult task of determining what information is
necessary in a claim, and what information is not. FDA believes that
its regulations in subpart E of 21 CFR part 101 represent an acceptable
balance between the consumer's right to understand the full context of
the claim and the manufacturer's concern over claim length. By
delineating the information that is mandatory and optional in a claim,
FDA is relieving manufacturers from having to include information that
is of tangential importance but ensuring that those who wish to make a
claim do so in a manner that provides a useful and understandable
message to consumers. FDA advises that it will take a similar approach
when providing model health claims in the future. FDA also notes that
manufacturers who are not satisfied with the model claim are free to
develop their own versions of the claim, provided that those versions
include all of the information required by the authorizing regulation.
29. Several comments raised the issue of product-specific health
claims by asserting that many manufacturers will be dissuaded from
undertaking the scientific studies and other investments necessary to
obtain approval of new health claims petitions by the fact that
approved health claims will be allowed for use on all qualifying
products. However, a number of comments stressed that in a health
claim, the role of the total diet should be emphasized rather than the
role of a specific food in risk reduction.
FDA advises that section 403(r)(1)(B) of the act pertains to a
claim about the relationship between a nutrient and a disease or
health-related condition, rather than about particular food product and
such a condition. While the agency has used the term ``substance'' in
lieu of the word ``nutrient'' and has said that a ``substance'' can be
a food, in doing so the agency was only trying to cover circumstances
such as those presented by fruits, vegetables, and grain products in
which it was not possible to identify the specific nutrient in a broad
class of foods that was having the observed effect on the risk of
disease. FDA was not thereby including formulated products as possible
subjects of health claims. Such products are formulated to include
particular substances because of the nutritional effects of those
substances. Thus, a health claim for such a product would appropriately
be about the substance in the formulated product and not about the
product itself.
In addition, section 403(r)(3)(B)(iii) of the act directs the
agency to require that health claims enable the public to understand
the information in the context of the total daily diet. As explained
above, FDA finds that to effect Congress' intent in passing the 1990
amendments, the same requirement should apply to health claims made on
dietary supplements. FDA believes that a claim that refers specifically
to the effects on a disease or health-related condition resulting from
the consumption of a certain brand name of product would unduly
emphasize the importance of that product and not the importance of the
total daily diet. Also, such claims could imply that other brands of
the same food, as well as other foods containing the substance that is
the subject of the claim, might not have the same effect on the disease
or health-related condition and thus would be misleading under section
403(a) of the act. Accordingly, the agency finds that it is not
appropriate to approve product-specific health claims.
30. One comment suggested that FDA provide regular monthly or
quarterly reports concerning newly approved health claim petitions for
display in the supplement section of stores. The comment maintained
that such a list distributed by FDA would increase consumer confidence
in the claims when they appear on supplement labels.
Although FDA recognizes that there could be benefits to consumers
from such reports, the agency simply does not have the resources to
provide the reports on an ongoing basis. However, FDA expects that
trade associations and other interested parties will provide
information to firms that will ultimately be passed on to consumers.
IV. Constitutional Issues
A. First Amendment
1. General
31. Several comments raised concerns that the regulations violate
the First Amendment. Comments cautioned that the regulations would be
unconstitutional if they limited the dissemination of scientific
opinion or prevented scientifically valid, well-balanced information
from reaching the public.
In the final rule on health claims for foods in conventional food
form, 58 FR 2478 at 2524 through 2528 (January 6, 1993), the agency
addressed in detail the First Amendment implications of its regulation
of health claims on the food label and in food labeling. The agency
concluded that its regulations, and the act as amended by the 1990
amendments, do not violate the First Amendment. FDA considers its
earlier analysis to be relevant to the present rulemaking and
incorporates it into this document. The agency notes that none of the
comments submitted on the proposed rule on health claims for dietary
supplements disputed the agency's earlier discussion, and no comments
argued that subsequent court decisions have called the agency's
conclusions into question.
FDA disagrees with the comments that asserted that these
regulations unconstitutionally suppress scientific opinion. The
regulations address what may appear in labeling; they do not affect any
other means of disseminating information. Indeed, far from limiting the
dispersal of scientific information, as stated above, these
regulations, which implement the 1990 amendments to the act, permit
more information to appear on the label than the act allowed before its
amendment.
The agency does not agree with the comments' implication that the
Constitution requires a more lenient standard of scientific validity
than that codified in Sec. 101.14(c). FDA has a strong interest in
ensuring that the information that appears on the food label is
scientifically valid and believes that the standard it has adopted best
furthers that interest. When FDA seeks to ensure that food is not
misbranded, it may place restrictions on label contents. See SEC v.
Wall Street Publishing Institute, 851 F.2d 365, 373 (D.C. Cir. 1988),
cert. denied, 489 U.S. 1066 (1989); American Frozen Food Institute v.
Mathews, 413 F. Supp. 548, 555 (D.D.C. 1976), aff'd, 555 F.2d 1059
(D.C. Cir. 1977). Contrary to the view of the comments, ``the First
Amendment does not guarantee the right to employ every conceivable
method of communication at all times and in all places'' (Members of
City Council v. Taxpayers for Vincent, 466 U.S. 789, 812 (1984)).
Indeed, ``Freedom of Speech does not include the freedom to violate the
labeling provisions of the Federal Food, Drug, and Cosmetic Act.''
(United States v. Articles of Food * * * Clover Club Potato Chips, 67
F.R.D. 419, 424 (D. Idaho 1975)).
2. Pure Speech
31a. One comment asserted that health claims are not commercial in
nature and are entitled to full First Amendment protection. This
comment described health claims as typically being mere recitations of
scientific findings made by independent medical authorities and backed
by substantial agreement in the medical community. The comment asserted
that the proposed regulations reach ``pure scientific speech'' placed
on labels and in product advertisements and violate the First Amendment
by: (1) denying speakers channels of communication to present truthful,
nonmisleading health claims; (2) denying speakers the right to
communicate a particular kind of content; (3) discriminating against
certain speakers and forms of communication; and (4) denying the
constitutional rights of willing listeners, viewers, and readers.
FDA disagrees with the comment. The agency notes initially that the
comment misinterprets the scope of the agency's action. These
regulations apply only to health claims made on the label or in
labeling of dietary supplements and not to advertising.
The agency disagrees that health claims are entitled to full First
Amendment protection. The agency has stated that, although it does not
consider it necessary for its First Amendment analysis to determine
whether or not food labeling fits the definition of commercial speech,
labeling should certainly be considered closer to commercial speech
than to ``pure'' speech (58 FR 2478 at 2525 through 2526). It has also
stated that ``[l]abeling statements on food products intended for sale
would clearly appear in the context of a commercial transaction and
would `propose' such a transaction.'' (58 FR 2478 at 2527 (citing
Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 66 (1983)); Central
Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557,
562 n.5 (1980)); see also Adolph Coors v. Brady, 944 F.2d 1543, 1546
(10th Cir. 1991); United States v. General Nutrition, Inc., 638 F.
Supp. 556, 562 (W.D.N.Y. 1986). Commercial speech receives a lesser
degree of protection than noncommercial speech. (See, e.g., City of
Cincinnati v. Discovery Network, Inc., 113 S. Ct. 1505, 1513 (1993)).
The comment does not make a persuasive argument for considering health
claims on dietary supplement labels to be pure speech, and FDA is not
aware of any circumstance in which a court has considered such
information on the food label to be ``pure'' speech. Contrary to the
comment's assertion, information that is placed on the label by a
commercial enterprise in order to encourage the consumer to make a
purchase should not be considered protected speech simply because it
was generated by an independent source. (See, e.g., United States v.
Article of Drug * * * B-Complex Cholinos Capsules, 362 F.2d 923, 927
(3d Cir. 1966) (free speech was not implicated when third party's
statements were taken as evidence of manufacturer's intent); United
States v. Articles of Drug, 32 F.R.D. 32, 34-35 (S.D. Ill. 1963) (First
Amendment did not prohibit seizure of third party's book used as
labeling)).
Although the agency disagrees that health claims should be
considered noncommercial speech, and although many of the cases cited
in the comment deal with fully protected speech rather than commercial
speech and thus do not provide a useful analytical framework for these
regulations, the agency will address the comment's arguments
individually.
The agency disagrees that its action denies speakers channels of
communication. As discussed above, the agency has placed no limits on
the dissemination of scientific information but has acted to permit
certain information to appear on the label or in labeling of dietary
supplements. Adequate alternative channels remain for the dissemination
of scientific information. For example, regulation of the information
that may appear on the food label in no way affects the ability of a
scientist to publish experimental results in a journal. Moreover, any
interested person may petition for a health claim regulation.
The agency disagrees that these regulations should be subjected to
the close scrutiny afforded restraints on the content of pure speech.
Of the cases cited by the comment to advance this argument, one is
particularly instructive. In Turner Broadcasting System, Inc. v. FCC,
the court declined to apply strict scrutiny to the ``must-carry''
provisions of the 1992 Cable Act, applying instead the ``interest-
balancing traditionally applied to content-neutral speech regulation or
legislation ostensibly unrelated to expression that is discovered to
impose incidental burdens on speech.'' 819 F. Supp. 32, 39 (D.D.C.
1993), prob. juris. noted, 114 S. Ct. 38 (1993). In passing the Cable
Act, ``Congress employed its regulatory powers over the economy to
impose order upon a market in dysfunction, but a market in a commercial
commodity nevertheless; not a market in speech'' (Id. at 40).
Similarly, with the 1990 amendments Congress sought to bring order to
the food market. (See, e.g., 136 Congressional Record S16611 (October
24, 1990) (statement of Sen. Hatch) (``It is up to us to make order out
of chaos in the regulation of food * * *.''); 136 Congressional Record
H12953 (October 26, 1990) (statement of Rep. Waxman) (``[T]he bill will
once and for all settle the confusion surrounding health claims.'')).
As discussed in the final rule on health claims for foods in
conventional food form, the case law establishes that FDA's power to
regulate the food label derives from its broad regulatory powers over
food (58 FR 2525). As in Turner, these regulations are valid under the
limited scrutiny that has been afforded restrictions on speech under
extensive regulatory schemes involving areas of economic activity (Id).
The comment argued that the regulations are impermissibly
discriminatory because they require government regulators to exercise
judgment based on subjective line-drawing, guided not by rational
principles of law and science but by the will of the censorship
authority. FDA disagrees. The agency has carefully articulated the
appropriate scientific standard that it will apply to proposed health
claims. Unlike the ordinance at issue in Forsyth County v. Nationalist
Movement, cited by the comment, the decision whether to authorize a
health claim is not left to the agency's whim but is based on objective
factors. 112 S. Ct. 2395, 2403 (1992). In Forsyth, the county
administrator's exercise of discretion to vary the fee for assembling
or parading was not reviewable and did not require an explanation (Id).
FDA's procedure for evaluating a proposed health claim, including use
of notice and comment rulemaking, presents a far different situation,
and one that does not offend the Constitution.
Contrary to the comment's assertion, the fact that FDA does not
presume to prohibit the publication of health claims in the popular
media does not show an ``arbitrary predilection to enforce [the] law
against particular speakers and forum owners rather than others.'' FDA
has no interest in regulating the dissemination of scientific
information in the popular media and has no authority to do so. Rather,
its strong interest is in ensuring that health claims made in labeling,
on which consumers are likely to rely when making purchasing decisions,
are truthful, not misleading, and scientifically valid. The agency's
action contrasts with the categorical ban on commercial newsracks
struck down in City of Cincinnati v. Discovery Network, Inc., 113 S.
Ct. 1505. In that case, the Supreme Court held that the restriction,
which was intended to advance Cincinnati's interest in safety and
esthetics, overemphasized the distinction between commercial and
noncommercial speech by prohibiting only newsracks holding commercial
handbills and not those holding ordinary newspapers (Id. at 1514). The
city thus discriminated against a use of newsracks that was no more
harmful to safety and esthetics than the use it permitted (Id. at
1511). On the other hand, FDA's regulation of health claims in labeling
bears a specific relationship to the interests the agency has asserted,
because it is directed specifically at ensuring the reliability and
validity of these claims (see id. at 1514.) Contrary to the comment's
assertion, the limited scope of FDA's regulations--i.e., food
labeling--does not amount to discrimination.
Finally, the agency disagrees that its regulations deny the
constitutional rights of willing listeners, viewers, and readers.
First, this argument overstates the impact of these regulations, which
will affect only the labeling of dietary supplements and not other
sources of information about these products. Second, these regulations
will actually advance consumers' First Amendment interest in obtaining
information on which to base a purchasing decision, ``by insuring that
the information is not false or deceptive'' (National Commission on Egg
Nutrition v. FTC, 570 F.2d 157, 162 (7th Cir. 1977), cert. denied, 439
U.S. 821 (1978)). ``The fact that health is involved enhances the
interests of both consumers and the public in being assured `that the
stream of commercial information flow clearly as well as freely''' (Id.
(citing Virginia State Board of Pharmacy v. Virginia Citizens Consumer
Council, 425 U.S. 748, 772 (1976)); see also American Home Products v.
FTC, 695 F.2d 681, 714 (3d Cir. 1982)).
3. Commercial Speech
31b. Two comments asserted that, if health claims on labels are
considered commercial speech, FDA's regulations violate the First
Amendment because they are more restrictive than necessary to achieve
the government's goals. One comment recognized that FDA has ``a great
interest in preventing false and misleading claims and in preventing
fraud in the marketplace,'' but argued that closing the door on
truthful, qualified claims that are based on significant scientific
evidence is not reasonably responsive to those interests. The other
comment asserted that the wholesale suppression of truthful,
nonmisleading speech carries with it the silencing of speech
indispensable to the health of the American people, and that the
agency's action not only lacks a rational relationship to the end
chosen, public health, but actually undercuts that goal by shrouding
the public in ignorance.
FDA disagrees that these regulations, if considered under the
commercial speech doctrine, are unconstitutional. The final rule on
health claims for foods in conventional food form, 58 FR 2478 at 2526-
2527 (January 6, 1993), contains an analysis of that regulation in
light of the four-part test set out in Central Hudson Gas & Electric
Corp. v. Public Service Commission, 447 U.S. 557, 563-564 (1980). That
discussion is equally applicable to the present rulemaking. Central
Hudson states that commercial speech that is inherently misleading is
not protected and may be prohibited (Id.). Speech that is only
potentially misleading may be restricted, so long as the restrictions
directly advance a substantial governmental interest and are no more
extensive than necessary to serve that interest (Id. at 566).
The comments do not dispute the government's substantial interest
in promoting public health by ensuring that consumers have access to
information about dietary supplements that is scientifically valid,
truthful, reliable, informative, and not misleading. (Indeed, one
comment stated that the government's interest is ``great.'') Rather,
the comments focus on the last two parts of the Central Hudson test:
whether the regulations directly advance the governmental interest, and
whether there is a reasonable fit between regulatory ends and means.
FDA disagrees that its regulations will undercut its stated goals.
Rather, the regulations directly advance the governmental interest. The
regulations provide for FDA review of the relevant scientific evidence
on a proposed health claim before the agency decides whether to
authorize use of the claim. In this way, the regulations ensure that
health claims are scientifically valid and reliable, and that they will
not mislead consumers. At the same time, the regulatory scheme
encourages the provision of information to consumers that will enable
them to maintain healthful dietary practices. Thus, these regulations
advance the government's interest in a ``direct and material way''
(Edenfield v. Fane, 113 S. Ct. 1792, 1798 (1993)).
FDA also disagrees that these regulations are more extensive than
necessary to serve the government interest. Recently, the Supreme Court
stated that the ``commercial speech cases require a fit between the
restriction and the government interest that is not necessarily
perfect, but reasonable'' (United States v. Edge Broadcasting Co., 113
S. Ct. 2696, 2705 (1993) (citing Board of Trustees v. Fox, 492 U.S.
469, 480 (1989); Posadas de Puerto Rico Associates v. Tourism Co. of
Puerto Rico, 478 U.S. 328, 344 (1986))). In Edge, the Court upheld a
federal statute prohibiting the broadcast of lottery advertising by a
broadcaster licensed to a State that does not allow lotteries. Although
the law prevented a broadcaster in North Carolina, with a majority of
its listeners in Virginia, from airing nonmisleading advertisements for
Virginia's lottery, the Court had ``no doubt that the fit * * * was a
reasonable one.'' Edge, 113 S. Ct. at 2705. The Court stated that the
validity of a restriction should be judged ``by the relation it bears
to the general problem of accommodating the policies of both lottery
and nonlottery States, not by the extent to which it furthers the
Government's interest in an individual case.'' Id. (citing Ward v. Rock
Against Racism, 491 U.S. 781 (1989)). Moreover, once the government has
established a strong interest in adopting and enforcing rules of
conduct designed to protect the public, it is entitled to protect its
interest by applying a prophylactic rule to those circumstances
generally, Id. at 2706 (citing Ohralik v. Ohio State Bar Association,
436 U.S. 447, 464 (1978)).
After considering alternate approaches, the agency has concluded
that the procedures and scientific standard set out in these
regulations best advance its stated interests under the act. (See
discussion supra.) As in Edge, the government has weighed competing
interests: the interest in making information available on the dietary
supplement label and in its labeling about the relationship between
nutritional substances and disease or health-related conditions, and
the interest in ensuring that the information provided is
scientifically valid, informative, and not misleading. As in Ohralik
and Edge, the agency is entitled to protect its interest by applying a
prophylactic rule to general circumstances, in this case by permitting
only health claims about substance-disease relationships that the
agency has determined are scientifically valid to appear in labeling.
See Edge, 113 S. Ct. at 2706.
The means that FDA has chosen to further its substantial interest
are reasonable, ``in proportion to the interest served,'' and
``narrowly tailored to achieve the desired objective.'' City of
Cincinnati v. Discovery Network, Inc., 113 S. Ct. at 1510 n.12 (quoting
Fox, 492 U.S. at 480). The regulations specifically target labeling
claims about relationships between substances and disease or health-
related conditions. They are not intended to restrict the flow of
information to the public, but rather to ensure that the scientific
validity of information provided to consumers in the labeling of a
product has been established. Indeed, the regulations leave open a
broad range of other possible methods of communication.
4. Chilling Effect
31c. One comment asserted that an overbroad suppression of
scientific speech on communications media used by manufacturers creates
a pervasive chilling effect on their willingness (and that of the
scientists they employ) to communicate their findings for public and
professional consideration.
The overbreadth doctrine is an exception to traditional rules of
standing and is applicable in First Amendment cases in order to ensure
that an overbroad statute does not chill the exercise of protected
rights. Leonardson v. City of E. Lansing, 896 F.2d 190, 195 (6th Cir.
1990)). The doctrine may apply to a regulation that, in all its
applications, directly restricts protected First Amendment activity and
is not narrowly tailored Secretary of State of Maryland v. Joseph H.
Munson Co., 467 U.S. 947, 965 n.13 (1984). FDA disagrees that these
regulations are overbroad or that they will chill free speech. The
activity prohibited under the act and these regulations--marketing
dietary supplements bearing unapproved health claims in their
labeling--constitutes a ``core of easily identifiable and
constitutionally proscribable conduct,'' (467 U.S. at 965-966).
Labeling is defined in the act and easily identifiable. See 21 U.S.C.
321(m) (``The term labeling means all labels and other written,
printed, or graphic matter (1) upon any article or any of its
containers or wrappers, or (2) accompanying such article.''). Moreover,
courts have held that misbranding food is not protected under the First
Amendment. See, e.g., Kellogg Co. v. Mattox, 763 F. Supp. 1369, 1381
(N.D. Tex. 1991), aff'd sub nom. Kellogg Co. v. Morales, 940 F.2d 1530
(5th Cir. 1991); United States v. General Nutrition, Inc., 638 F. Supp.
556, 562 (W.D.N.Y. 1986); United States v. Articles of Food * * *
Clover Club Potato Chips, 67 F.R.D. 419, 424 (D. Idaho 1975). Finally,
as discussed above, the regulations are narrowly tailored to accomplish
the government's goals.
In any event, it is doubtful that the overbreadth doctrine would
apply to these regulations, particularly if they are considered to
regulate commercial speech, because the overbreadth doctrine does not
apply to commercial speech. ``[C]ommercial speech is generally
considered less susceptible to the chilling effect of regulation than
other, more traditionally recognized forms of speech, such as political
discourse.'' Kraft, Inc. v. FTC, 970 F.2d 311, 321 (7th Cir. 1992),
cert. denied, 113 S. Ct. 1254 (1993).
B. Fifth Amendment
32. One comment asserted that the takings clause of the United
States Constitution provides protection to dietary supplement trade
names. It argued that Sec. 101.14 might proscribe certain trade names
that FDA has allowed to remain on the market for years. The comment
urged FDA to give more attention, under Executive Order 12630, to the
regulation's possible takings implications.
When it issued its final regulations governing conventional foods
under the 1990 amendments, FDA fully discussed the takings implications
of those regulations. (See 58 FR at 2397 through 2400 and 2528 through
2529). This discussion, including the underlying takings analysis, is
incorporated herein. The agency concluded that there would be no
regulatory taking under the Fifth Amendment if a manufacturer is
required to alter its brand name when the brand name asserts by
implication a relationship between the presence or level of a substance
in the food and a disease or health-related condition, and that
relationship is not the subject of an approved health claim (58 FR at
2529). Because the agency conducted its analysis before passage of the
DS act, it fully took into account the regulations' impact on dietary
supplements. Although the comment stated that FDA must address the
issues raised by its regulations in light of Executive Order 12630, it
did not provide any additional information that the agency has not
already considered. Therefore, the agency concludes that it is not
necessary to address potential takings issues in any greater detail.
V. Other Issues
33. A few comments objected to the period of time provided for
public comment on the proposal, stating that it was too short. One of
these comments asserted that FDA had no reason to establish such a
short deadline other than to curtail public input on the proposed
regulations. Another of these comments requested that FDA extend the
period for public comment on the proposed regulations to give consumer
advocacy groups, health care professionals, and the scientific
community adequate time to prepare the information and opinions needed
to fairly resolve the issues associated with the proposal.
As explained in the preamble of the proposals, the DS act requires
that final rules implementing the 1990 amendments with respect to
dietary supplements be issued by December 31, 1993. To meet this
statutory timeframe, FDA was forced to limit the comment period for the
proposed regulations to 60 days. Thus, the agency reaffirms that it is
unable to grant any extensions to the comment period.
34. One comment requested that FDA clarify that the compliance date
is the date on which manufacturers of dietary supplements must begin to
label products in accordance with Sec. 101.14.
FDA advises that the comment is correct. Section 10(a)(2) of the
1990 amendments specifically states that ``* * * section 403(r) of the
Federal Food, Drug, and Cosmetic Act * * * shall not apply to food
which was labeled before the effective date of the amendments * * *
[emphasis added].'' Accordingly, the effective date of the health
claims regulations for dietary supplements adopted by the agency under
section 403(r) refers to the date on which a dietary supplement is
labeled.
35. A number of comments concerned the requirement in
Sec. 101.14(d)(2)(iv) that states that all claims must appear in one
place, in the same type size, without intervening material. The
comments addressed the exception in this provision that a short
reference statement may appear on the label, ``See ------------ for
information about the relationship between ------------ and ----------
--,'' with the blanks filled in with references to the location of the
labeling on which the full claim appears, the name of the substance,
and the disease or health-related condition. The comment requested that
FDA allow graphic material constituting an implied health claim to
appear on the PDP without the accompanying referral statement or full
health claim, as long as the graphic material appeared in conjunction
with the full health claim elsewhere on the labeling. The comment
justified this request based on the lack of sufficient label space on
the PDP for the referral statement.
FDA does not believe that it should make the requested revision in
Sec. 101.14(d)(2)(iv). In situations where graphic material constitutes
an implied health claim, and the reference statement is not present,
the graphic material on the labeling is in fact a shortened form of the
health claim. FDA explained in response to comment 69 in the health
claims final rule that shortened health claims are misleading because
they do not include facts that are material in light of the
representation that is made and that are necessary to understand the
claim in the context of the daily diet.
IV. Impact Statements
A. Economic Impact
In its dietary supplement labeling proposals pertaining to health
claims, nutrition labeling, and nutrient content claims in the June 18,
1993 Federal Register (58 FR 33700, 33715, and 33731), FDA stated that
the proposed rules on the labeling of dietary supplements, taken as a
whole, would have associated costs of approximately $20 million. Thus,
the agency concluded that the proposed rules do not constitute a major
rule as defined by Executive Order 12291. In accordance with the
Regulatory Flexibility Act (Pub. L. 96-354), FDA explored whether the
proposed rules may have a significant impact on small businesses and
tentatively concluded that they do not.
FDA has evaluated many comments that it received in response to its
economic impact analysis. Because the issues raised in the comments
relate to all three proposals, FDA has combined its discussion of these
comments and presented them in the final rule regarding the
establishment of the date of application published elsewhere in this
issue of the Federal Register.
FDA has examined the economic implications of the final rules as
required by Executive Order 12866 and the Regulatory Flexibility Act
(Pub. L. 96-354). 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, and public
health and safety effects; distributive impacts; and equity). The
Regulatory Flexibility Act requires that the agency analyze the options
for regulatory relief for small businesses. FDA has concluded, based on
its review of the available data and comments, that these final rules
are not significant as that term is defined by Executive Order 12866.
Further, in accordance with the Regulatory Flexibility Act, the agency
certifies that these final rules will not have a significant impact on
a substantial number of small businesses.
B. Environmental Impact
The agency has previously considered the environmental effects of
this rule when it was part of the proposed rule pertaining to both
foods in conventional food form and dietary supplements (November 27,
1991 Federal Register (56 FR 60537 at 60562)). At that time, FDA
determined under Sec. 25.24(a)(8) and (11) that the proposed action was
of a type that does not individually or cumulatively have a significant
impact on the human environment. No new information or comments have
been received with respect to health claims for dietary supplements
that would affect the agency's previous determination that there is no
significant impact on the human environment, and that an environmental
impact statement is not required.
C. Paperwork Reduction Act
In the dietary supplement proposal of June 18, 1993 (58 FR 33700 at
33714), FDA announced that the agency had submitted to the Office of
Management and Budget (OMB) for its review the collection of
information requirements contained in proposed Sec. 101.70, for
petitions regarding the use of health claims in conjunction with food
labeling on dietary supplements. Also in that document, FDA published
its estimated annual collection of information burden for this
provision.
None of the more than 1,200 comments received in response to the
dietary supplement proposal addressed the content of petitions under
the proposed health claim petition requirements. Thus, the agency's
estimate of the annual reporting and recordkeeping burden from the
health claim petition requirements contained in this final rule remains
unchanged from the estimate that it announced in June 1993.
FDA has submitted copies of the final rule to OMB for its review of
these reporting requirements.
V. References
The following references have been placed on display in the Dockets
Management Branch (HFA-305), Food and Drug Administration, rm. 1-23,
12420 Parklawn Dr., Rockville, MD 20857, and may be seen by interested
persons between 9 a.m. and 4 p.m., Monday through Friday.
1. House of Representatives, House Report 101-538, ``Nutrition
Labeling and Education Act of 1990,'' June 13, 1990.
1a. 136 Congressional Record--House H5843-5845, July 30, 1990.
2. 136 Congressional Record--House, H12951-12955, October 26,
1990.
3. 138 Congressional Record--House H12597 (October 8, 1992); 138
Congressional Record--Senate S17236 (October 7, 1992).
4. 136 Congressional Record--Senate, S16607-16612, October 24,
1990.
5. DHHS, PHS, ``The Surgeon General's Report on Nutrition and
Health,'' DHHS (PHS) Publication No. 88-50210 (GPO Stock No. 017-
001-00465-1, U.S. Government Printing Office, Washington, DC), 1988.
6. United States Pharmacopeia DI, ``NIACIN (Systemic),'' 9th
ed., 1989, Vol. IB, pp. 1737-1740.
7. Centers for Disease Control, ``Recommendations for the Use of
Folic Acid to Reduce the Number of Cases of Spina Bifida and Other
Neural Tube Defects,'' Morbidity and Mortality Weekly Reports,
September 11, 1992, volume 41/No. RR-14, pages 1-7.
List of Subjects in 21 CFR in Part 101
Food labeling, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
101 is amended as follows:
PART 101--FOOD LABELING
1. The authority citation for 21 CFR part 101 continues to read as
follows:
Authority: Secs. 4, 5, 6 of the Fair Packaging and Labeling Act (15
U.S.C. 1453, 1454, 1455); secs. 201, 301, 402, 403, 409, 701 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 331, 342, 343,
348, 371).
2. Section 101.14 is amended by revising paragraph (a)(2), by
adding a new paragraph (a)(4), and by revising paragraphs (b)(3)(i),
(d)(1), (d)(3), the introductory text of paragraph (e) and (e)(6), and
(g) to read as follows:
Sec. 101.14 Health claims: general requirements.
(a) * * *
(2) Substance means a specific food or component of food,
regardless of whether the food is in conventional food form or a
dietary supplement that includes vitamins, minerals, herbs, or other
similar nutritional substances.
* * * * *
(4) Dietary supplement means a food, not in conventional food form,
that supplies a component to supplement the diet by increasing the
total dietary intake of that component.
* * * * *
(b) * * *
(3) * * *
(i) The substance must, regardless of whether the food is in
conventional food form or dietary supplement form, contribute taste,
aroma, or nutritive value, or any other technical effect listed in
Sec. 170.3(o) of this chapter, to the food and must retain that
attribute when consumed at levels that are necessary to justify a
claim; and
* * * * *
(d) General health claim labeling requirements. (1) When FDA
determines that a health claim meets the validity requirements of
paragraph (c) of this section, FDA will propose a regulation in subpart
E of this part to authorize the use of that claim. If the claim
pertains to a substance not provided for in Sec. 101.9 or Sec. 101.36,
FDA will propose amending that regulation to include declaration of the
substance.
* * * * *
(3) Nutrition labeling shall be provided in the label or labeling
of any food for which a health claim is made in accordance with
Sec. 101.9; for restaurant foods, in accordance with Sec. 101.10; or
for dietary supplements of vitamins or minerals, in accordance with
Sec. 101.36. The requirements of the introductory text of paragraph
(d)(3) of this section are effective as of May 8, 1993, except:
(i) [Reserved]
(ii) [Reserved]
(iii) For dietary supplements of vitamins, minerals, herbs, or
other similar nutritional substances for which the requirements of
paragraph (d)(3) of this section will be effective July 5, 1994.
(e) Prohibited health claims. No expressed or implied health claim
may be made on the label or in labeling for a food, regardless of
whether the food is in conventional food form or dietary supplement
form, unless:
* * * * *
(6) Except for dietary supplements, the food contains 10 percent or
more of the Reference Daily Intake or the Daily Reference Value for
vitamin A, vitamin C, iron, calcium, protein, or fiber per reference
amount customarily consumed prior to any nutrient addition.
* * * * *
(g) Applicability. The requirements of this section apply to foods
intended for human consumption that are offered for sale, regardless of
whether the foods are in conventional food form or dietary supplement
form.
Sec. 101.70(f) [Amended]
3. Section 101.70 is amended in paragraph (f) in the sample
petition for a health claim, in the paragraph beginning with ``The
undersigned,'' by adding the words ``or 403(r)(5)(D)'' after
``403(r)(4)''.
Dated: December 23, 1993.
David A. Kessler,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 93-31815 Filed 12-29-93; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 93-31814 Food Labeling; Requirements for Nutrient Content Claims for Dietary Supplements of Vitamins, Minerals, Herbs, and Other Similar Nutritionnal Substances
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 354-395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-31814]
[[Page Unknown]]
[Federal Register: January 4, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 101
[Docket No. 91N-384D]
RIN 0905-AD96
Food Labeling; Requirements for Nutrient Content Claims for
Dietary Supplements of Vitamins, Minerals, Herbs, and Other Similar
Nutritionnal Substances
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending its
regulations to: (1) Include dietary supplements of vitamins, minerals,
herbs, and other similar nutritional substances (hereinafter referred
to as ``dietary supplements'') under the coverage of the general
principles for nutrient content claims; (2) provide for the use of
expressed and implied nutrient content claims on labels or in labeling
of dietary supplements; and (3) provide for petitions for nutrient
content claims for dietary supplements. This final rule is in response
to the Nutrition Labeling and Education Act of 1990 and to the Dietary
Supplement Act of 1992.
EFFECTIVE DATE: July 1, 1995.
FOR FURTHER INFORMATION CONTACT: Camille E. Brewer, Center for Food
Safety and Applied Nutrition (HFS-165), Food and Drug Administration,
200 C St. SW., Washington, DC 20204, 202-205-5483.
SUPPLEMENTARY INFORMATION:
I. Regulatory History
On November 8, 1990, President Bush signed into law the Nutrition
Labeling and Education Act of 1990 (the 1990 amendments) (Pub. L. 101-
535). The 1990 amendments revised the Federal Food, Drug, and Cosmetic
Act (the act) in a number of important ways. One of the most notable
aspects of the 1990 amendments is that they establish FDA's authority
to regulate nutrient content claims on food labels and in food
labeling. Section 403(r)(1)(A) of the act, which was added by the 1990
amendments, provides that a product is misbranded if it bears a claim
in its label or labeling that either expressly or implicitly
characterizes the level of any nutrient of the type required to be
declared as part of nutrition labeling, unless such claim has been
specifically defined (or otherwise exempted) by regulation. The 1990
amendments also direct the Secretary and, by delegation, FDA to
promulgate regulations to define specific nutrient content claims
including ``free,'' ``low,'' ``light'' or ``lite,'' ``reduced,''
``less,'' and ``high'' (section 3(b)(1)(A)(iii) of the 1990
amendments).
In the Federal Register of November 27, 1991 (56 FR 60421 and 56 FR
60478), FDA published two documents in which it proposed, among other
things, to define nutrient content claims, to provide for their use on
foods labels, and to establish procedures for the submission and review
of petitions regarding the use of specific nutrient content claims.
These proposals applied to dietary supplements as well as foods in
conventional food form.
On October 6, 1992, the President signed the Dietary Supplement Act
of 1992, Title II of Pub. L. 102-571 (the DS act). Section 202(a)(1) of
the DS act established a moratorium on the implementation of the 1990
amendments with respect to dietary supplements until December 15, 1993.
Section 202(a)(2)(A) required the Secretary, and by delegation FDA, to
issue proposed regulations on nutrient content claims for dietary
supplements no later than June 15, 1993.
FDA issued final regulations that implemented the 1990 amendments
with respect to nutrient content claims on foods in conventional food
form on January 6, 1993 (hereinafter referred to as the ``final rule on
nutrient content claims'') (58 FR 2302). FDA modified these final
regulations slightly in a document that made technical corrections to
them (58 FR 44020, August 18, 1993) (hereinafter referred to as ``the
technical corrections document''). In response to the requirements of
the DS act, FDA published in the Federal Register of June 18, 1993 (58
FR 33731) a proposal to: (1) Include dietary supplements under the
coverage of the general principles for nutrient content claims; (2)
provide for the use of expressed and implied nutrient content claims on
labels or in labeling of dietary supplements; and (3) provide for
petitions for nutrient content claims for dietary supplements
(hereinafter referred to as the ``proposal on nutrient content claims
for dietary supplements'').
FDA received approximately 500 letters in response to its June 18,
1993, proposal on nutrient content claims for dietary supplements. Each
letter contained one or more comments. The letters were from a wide
range of sources, including consumers; consumer organizations;
professional associations; Federal, State, and local government
agencies; industry; and industry trade associations. Many comments
generally supported the proposal or various provisions of the proposal.
Other comments addressed issues outside the scope of the proposal
(e.g., freedom of choice, access to health care, access to dietary
supplements) and will not be discussed here. Many comments suggested
modifications, revisions, or revocations of various aspects of the
proposal. A summary of the comments, the agency's responses to the
comments, and a complete discussion of the agency's conclusions with
respect to nutrient content claims for dietary supplements follows.
II. Nutrient Content Claims for Dietary Supplements--FDA Authority
1. A couple of comments contended that FDA lacks the statutory
authority to prohibit claims for substances for which no reference
value (i.e., Reference Daily Intake (RDI) or Daily Reference Value
(DRV)) has been established. The comments also stated that the agency
lacks legal authority to promulgate regulations governing products
bearing a nutrient content claim for a nutrient or other substance not
explicitly named in section 403(q)(1) or (q)(2) of the 1990 amendments.
The comments said that the references to section 403(q)(1) or (q)(2) of
the act are references to those nutrients that the 1990 amendments
require to be listed (``mandatory nutrients'') on the nutrition label.
The comments argued that under these provisions, a food may be subject
to a misbranding charge under section 403(r)(1) of the act only if it
characterizes, either explicitly or implicitly, the level of a
mandatory nutrient in the food.
The comments also stated that the 1990 amendments did not provide
FDA with misbranding authority over products that bear a claim
characterizing the level of a nutrient or other substance that is not
listed in section 403(q)(1) or (q)(2) of the act. The comments
maintained that, regardless of whether a RDI or DRV has been
established, no special requirements should apply if a manufacturer of
a substance not covered by section 403(q)(1) or (q)(2), such as garlic,
wished to claim that his product was ``high in garlic'' or a ``good
source of garlic.'' The comments argued that while FDA maintains its
general misbranding authority over products bearing claims that
characterize the level of a nonmandatory substance, FDA still must meet
its burden of proving that any such claims are actually ``false or
misleading in any particular'' under the general misbranding provision,
section 403(a)(1) of the act.
Section 403(r)(1)(A) of the act states that a food intended for
human consumption is misbranded if it bears a claim that expressly or
by implication ``characterizes the level of any nutrient which is of
the type required by paragraph (q)(1) or (q)(2) to be in the label or
labeling of the food * * *.'' The statute uses the same language in
section 403(r)(1)(B) to describe the substances that could be the
subject of a health claim. A health claim is a claim that
``characterizes the relationship of any nutrient which is of the type
required by paragraph (q)(1) or (q)(2) to be in the label or labeling
of the food to a disease or a health-related condition * * *.''
Under section 403(r)(1)(B), a health claim may be made in accordance
with section 403(r)(5)(D) as well as section 403(r)(3). Thus, because a
statute must be read as a whole, the language in section 403(r)(1)(A)
and (r)(1)(B) of the act that describes the substances that may be the
subject of a nutrient content or of a health claim must be read in
conjunction with section 403(r)(5)(D), which addresses health claims
for vitamins, minerals, herbs, or other similar nutritional substances
that are components of dietary supplements. Thus, the ``nutrients of
the type required by paragraph (q)(1) or (q)(2)'' that are the subject
of sections 403(r)(1)(A) and (r)(1)(B) of the act include vitamins,
minerals, herbs, and other similar nutritional substances.
The legislative history of ``other nutritional substances'' reveals
that its coverage is broad and could, in appropriate circumstances,
include garlic. See 136 Cong. Record S16609 (daily ed. October 24,
1990) (discussion between Senators Metzenbaum and Symms). Therefore,
while a label claim that a food contains garlic that is intended to
describe the taste of the food would not be subject to section
403(r)(1)(A) of the act, a claim that describes the garlic content in a
way that reveals that garlic is being referred to as a nutritional
substance would be subject to that section. Under section 403(r)(1)(A)
of the act, the latter claim would misbrand the food unless its use has
been authorized by FDA under section 403(r)(2). Thus, FDA rejects the
comments that disagreed with the proposed coverage of the nutrient
content claim provisions.
FDA has relied on the RDI's and DRV's in defining nutrient content
claims under section 403(r)(2) of the act because it has concluded that
if the characterization of the level of a nutrient is to have any
meaning, there must be a level that can be used as a reference in
determining whether the characterization is valid and appropriate. The
RDI's and DRV's provide such levels. Thus, in Sec. 101.54(a) (21 CFR
101.54(a)), FDA has limited the use of ``good source,'' ``high,'' and
``more'' claims to use with nutrients for which an RDI or DRV has been
established. FDA is not aware of any other alternative standards.
If interested persons are aware of other standards that can be used
as reference values to establish the validity of content claims for
substances for which RDI's and DRV's have not been established, those
persons should make FDA aware of those standards through Sec. 101.69
(21 CFR 101.69) or other appropriate means. FDA will carefully consider
using such standards as the basis for content claims for the substances
involved.
III. Basis for Nutrient Content Claims For Dietary Supplements
A. Relationship to January 6, 1993 Final Rules, Consistency with
Established Nutrient Content Claims, Scope
2. Many comments supported consistency in definitions for nutrient
content claims between foods in conventional food form and dietary
supplements. However, one comment stated that consistency in
definitions for nutrient content claims for dietary supplements and
foods in conventional food form is inappropriate. The comment argued
that FDA has chosen to define nutrient content claims that are not
meaningful to the supplement industry and to consumers.
Many comments pointed out that dietary supplements are intended to
contribute, with foods in conventional food form, to consumers' daily
nutrient intake. Thus, the comments argued that it is important that
the terms used to describe the levels of nutrients in both dietary
supplements and foods in conventional food form be consistent. These
comments maintained that consumers would be confused if claims were to
be allowed on dietary supplements that were not defined in the same
manner as those for foods in conventional food form.
FDA disagrees with the comments that said that consistency with
established nutrient content claims is inappropriate as a basic
principle for defining nutrient content claims for dietary supplements.
There is much about dietary supplements that suggests that the
principles that guide FDA in defining nutrient content claims for
dietary supplements should be the same as the principles that guide the
agency in defining nutrient content claims on foods in conventional
food form. Dietary supplements that are not intended for use as drugs
have traditionally been regulated as foods and, as such, must be
evaluated within the context of the total daily diet. In addition,
nutrients from dietary supplements serve the same physiological
function as nutrients from foods in conventional food form. While some
consumers seek to ensure that the nutrient content of their diet is
adequate through foods in conventional food form, other consumers seek
to ensure nutritional adequacy by making dietary supplements part of
their diets (Ref. 1). Consistent use of terms on dietary supplements
and on foods in conventional food form will thus help consumers to
construct a nutritionally adequate total daily diet by allowing
consumers to make meaningful comparisons among these products. It will
also facilitate use of these terms by consumers.
Over the years, FDA has stressed the importance of consistent
definitions and descriptive terms as a necessary requirement for
effective education and for preventing misleading labeling (Ref. 2). If
terms were given different definitions depending on whether they were
to be used to describe foods in conventional food form or dietary
supplements, it would make it much more difficult for the public to
understand what these terms are intended to convey about a particular
food. Moreover, a single definition for a particular term eliminates
any possibility that ambiguities could be created by the use of that
term. Therefore, the agency concludes that for nutrient content claims,
the definition of a particular term should be the same regardless of
the type of food that it is being used to describe.
Additionally, FDA has been criticized for treating dietary
supplements differently than other foods. FDA has no desire to
discriminate in any way against supplements. Thus, by having a single
definition for a particular nutrient content claim, FDA is providing
the basis for dietary supplements to make the same claims as other
foods and to be factored into the diet like other foods.
Nonetheless, as discussed in the proposal on nutrient content
claims for dietary supplements (58 FR 33731), FDA recognizes that
dietary supplements differ in at least two respects from foods in
conventional food form. First, dietary supplements are likely to
contain much higher levels of nutrients than foods in conventional food
form. Thus, additional nutrient content claims that are specific for
dietary supplements may be appropriate. As discussed later in this
document, the agency intends in the near future to initiate a separate
rulemaking to establish such claims for dietary supplements. Second,
dietary supplements generally do not contain several nutrients (e.g.,
fat, cholesterol) found in foods in conventional food form. Therefore,
in this document, FDA is limiting the use of certain claims that are
useful for describing foods in conventional food form but that do not
meaningfully describe dietary supplements.
B. General Principles
1. Substitute Foods
3. One comment objected to the requirement to use the word
``imitation'' on dietary supplements that are nutritionally inferior to
other products of the same type. The comment argued that FDA was never
given the authority to decide on formulations of dietary supplements,
and that setting such formulations is the exclusive role of the
manufacturer. Further, the comment stated that there is nothing
``imitation'' about ``less'' in the supplement industry, and that a
requirement that a supplement be labeled ``imitation'' if it is
nutritionally inferior to another product forces manufacturers to
increase potencies in order that their products will not have to be
labeled ``imitation.''
Under section 403(r)(2)(A)(ii) of the act, for a food to be labeled
as ``[nutrient] free,'' the nutrient must usually be present in the
food or in a food for which it substitutes, as that term is defined by
the Secretary (and by delegation, FDA) for the food. Accordingly, the
agency defined ``substitute foods'' in Sec. 101.13(d) (21 CFR 101.3(d))
in the final rule on nutrient content claims (58 FR 2302 at 2411) for
the purpose of identifying the characteristics that substitute foods
must have if they are to bear nutrient content claims that highlight
differences between them and the foods for which they substitute. The
definition states that a substitute food is one that may be used
interchangeably with another food that it resembles, i.e., to which it
is organoleptically, physically, and functionally (including shelf
life) similar and to which it is not nutritionally inferior, unless it
is labeled as an ``imitation.'' Additionally, Sec. 101.3(e)(1) (21 CFR
101.3(e)(l)) states that a food shall be deemed to be an imitation, and
thus subject to the requirements of section 403(c) of the act, if it is
a substitute for or resembles another food but is nutritionally
inferior to that food. Thus, the issue that the agency must consider is
whether dietary supplements that are foods should be subject to these
provisions on substitute foods as any other foods are.
The agency has no evidence that manufacturers will increase the
potencies for their products to avoid the use of this term and
disagrees that this provision will interfere with a manufacturer's
right to decide on product formulations. It is extremely unlikely that
the term ``imitation'' will ever be used on dietary supplements,
particularly dietary supplements of vitamins and minerals. The issue of
whether a supplement would be an ``imitation'' would arise only when a
manufacturer chooses to make a ``free'' or ``low'' claim for sugar or
sodium on a dietary supplement (see comment 4). In such circumstances,
under section 403(r)(2)(A)(ii) of the act, the manufacturer must
identify a product on the market with which its product can be used
interchangeably, to which the manufacturers product is not
nutritionally inferior, and that contains sodium or sugar. Such a
product may include the version of the manufacturer's product that
contains sodium or sugar. As long as such a product exists, the
manufacturer's product need not be labeled as an imitation. Moreover,
if because of the way the manufacturer has formulated its product,
there is no product with which it is used interchangeably, the product
can be called ``------------, a sodium-free food.'' Only in the rare
situations in which neither of the conditions apply would the product
have to be called ``imitation'' for it to bear a ``free'' or ``low''
sodium or sugar claim.
Sections 101.13(d)(1) and (d)(2) are designed to ensure that
material differences between the substitute food and the reference food
are conspicuously stated on the label or labeling of the food, so that
consumers can make fully informed judgments about the value of the
substitute food and its usefulness in maintaining healthy dietary
practices. If a product has substantially less of a nutrient than the
reference food, and to that extent is materially different and inferior
in nutrient content, then ``imitation'' is an entirely appropriate
term. For this reason, the agency concludes that there is no reason to
apply the substitute food provisions any differently to dietary
supplements than to other foods.
2. Requirements for ``Low'' and ``Free'' Claims
4. Several comments from dietary supplement manufacturers and trade
associations questioned the need to allow ``low'' and ``free'' claims
for nutrients such as fat and cholesterol that are not typically found
in dietary supplements. One comment suggested that ``free,'' ``low,''
and ``reduced'' claims for calories, fat, and cholesterol on dietary
supplements should be permitted only on dietary supplements that are a
significant source of calories, such as protein supplements. The
comment argued that consumers do not expect most dietary supplements to
contain significant amounts of calories, and that it is nonsensical and
confusing to permit dietary supplements that are not a significant
source of calories to make a claim about reduced amounts of calories,
fat, and cholesterol contained therein. Another comment stated that
Americans who consume dietary supplements do not do so because the
products are ``low in fat,'' ``cholesterol free,'' or ``low calorie,''
and that consumers are not interested in the fat content of dietary
supplements. The comment argued that consumers care about the
substances in the products and the benefits that those products can
have for their health.
In the proposal on nutrient content claims for dietary supplements,
the agency requested comment on the need for extending ``free,''
``low,'' and ``reduced'' claims to dietary supplements (58 FR 33731 at
33745). The agency has reviewed the comments that it received and is
persuaded by them that it not meaningful to allow claims about the
calorie, fat (including saturated fat), or cholesterol content of most
dietary supplements. Most of these products do not contain those
nutrients, and most consumers do not expect that they do. Thus,
consumers would not generally look to these products in making dietary
choices that are designed to control the amount of calories, fat,
saturated fat, and cholesterol in the foods they eat. In fact, claims
about these nutrients in most dietary supplements would only serve to
confuse consumers. While it is true that FDA is requiring information
about these nutrients in the nutrition label of supplements of herbs
and of other similar nutritional substances, this requirement derives
mainly from the limitation on the exemption in section 403(q)(5)(F) of
the act (formerly section 403(q)(5)(E)). See the final rule on general
requirements for nutrition labeling for dietary supplements published
elsewhere in this issue of the Federal Register.
However, the agency recognizes that there are some dietary
supplements, such as protein supplements, in which the amount of
calories in the product is significant to consumers. On these products,
the source of the calories, particularly whether they are from fat, is
relevant and useful information.
Therefore, FDA has decided, based on the comments that it received
to only allow calorie, fat, saturated fat, and cholesterol claims on
those dietary supplements in which the amount of calories is important
to consumers. In attempting to define what this level of calories
should be, the agency looked first to Sec. 101.9(f)(1) and (j)(4),
which said that a food has ``insignificant'' calories for the purposes
of nutrition labeling if it has an amount of calories that can be
rounded to zero. Section 101.9(c)(1) states that ``less than 5
calories'' per serving may be expressed as zero, the same amount that
is defined as ``calorie free.''
While FDA does not have information on the caloric content of
dietary supplements, it would not be unreasonable to expect that many
dietary supplements contain more than 5 calories (cal) per serving,
particularly children's chewable vitamin and mineral supplements,
supplements that contain herbal extracts, and supplements that contain
caloric binders and fillers. Thus, to tie the use of ``free,'' ``low,''
and ``reduced'' calorie, fat, and cholesterol claims on labels of
dietary supplements to the presence of more than an ``insignificant
amount'' of calories in the food would be over-inclusive and would
allow many products in which the amount of calories is not significant
to consumers to bear such claims.
FDA next looked at the definition of ``low calorie'' in
Sec. 101.60(b)(2) (21 CFR 101.60(b)(2)) for use in determining which
dietary supplements should be allowed to bear ``free,'' ``low,'' and
``reduced'' claims. Section 101.60(b)(2) defines a ``low calorie'' food
as a food that contains 40 cal or less per reference amount customarily
consumed (hereinafter referred to as reference amount) and per 50 grams
(g) if the reference amount is small. FDA believes that 40 cal per
reference amount represents a reasonable level for demarcating a
dietetically relevant source of calories for dietary supplements. In a
product that contains this amount of calories, the source of the
calories (e.g., fat) is of significance to consumers.
Accordingly, the agency is revising Sec. 101.62(a) (21 CFR
101.62(a)) by adding paragraph (a)(4) to state that ``free,'' ``low,''
and ``reduced'' claims for fat, saturated fat, and cholesterol may not
be made for dietary supplements that meet the criteria in
Sec. 101.60(b)(1) and (b)(2) for ``calorie free'' and ``low calorie''
claims. FDA is also revising Sec. 101.13(b) by adding new paragraph
(b)(5) to reflect these provisions. As a consequence, claims that
identify all products of that class of being ``low'' or ``free'' of a
nutrient (e.g., ``vitamin C supplement, a fat-free supplement'') will
also be prohibited.
However, to use the same criteria (i.e., that a product may not be
``calorie free'' or ``low calorie'') as a basis for when a calorie
claim may be made, has the effect of prohibiting the very claims that
the criterion seeks to permit, namely ``calorie free'' and ``low
calorie'' claims. Such a criterion would permit only relative calorie
claims (e.g. ``reduced'') on dietary supplements. Therefore, a slightly
different scheme for permitting calorie claims on certain dietary
supplements, such as protein supplements, must be derived.
While, as stated above, the agency believes that calorie claims
should not be permitted on most dietary supplements, it does believe
that ``calorie free'' and ``low calorie'' claims may be appropriate if
an equivalent amount of a similar food (i.e., another protein
supplement) that the labeled food resembles and for which it
substitutes would normally contain an appreciable amount of calories.
Such a claim would highlight that the labeled food had a different
calorie profile than would be expected in the similar product. It would
also serve to direct a consumer to a product that had a lower amount of
calories. Because the food would meet the criteria for ``low calorie''
and would be so labeled, it would not be necessary to highlight any
comparative differences between the labeled and the similar food as
would be required for a relative claim.
Therefore, the agency is revising Sec. 101.62(a) by adding new
paragraph (a)(4) to state that claims for calories may not be made on
labels of dietary supplements that meet the criteria in
Sec. 101.60(b)(1) or (b)(2) for ``calorie free'' and ``low calorie''
except when an equivalent amount of a similar dietary supplement (e.g.,
another protein supplement) that the labeled food resembles and for
which it substitutes normally exceeds the definition for ``low
calorie'' in Sec. 101.60(b)(2). It is including similar language in
Sec. 101.13(b)(5).
The comments specifically objected to claims for calories, fat, and
cholesterol. Claims for sodium and sugar content were not mentioned.
Since the sugar and sodium levels in dietary supplements can vary
substantially, the agency finds that claims about the sugar and sodium
content of dietary supplements may be useful in helping consumers to
make purchasing decisions that will assist them in maintaining healthy
dietary practices. Thus, extending the definitions of ``low,''
``free,'' and ``reduced'' for sugar and sodium to dietary supplements
is appropriate irrespective of the calorie level of the dietary
supplement. Therefore, FDA concludes that there is no need to place
limitations on claims for sugar and sodium content other than those in
Secs. 101.60(c) and 101.61, respectively. As explained below, FDA is
amending these provisions to reflect their application to dietary
supplements.
3. Labeling Mechanics
a. Type size
5. In discussing type size for nutrient content claims, one comment
stated that every new statement that is required on dietary supplement
labels will create a problem for manufacturers, particularly if they
are constrained by minimum-type size requirements.
The agency acknowledges that dietary supplements are frequently
packaged in small containers, and for this reason, FDA specifically
asked for information on the impact of the type size proposal on
dietary supplements that are packaged in small containers (58 FR 33731
at 33734). No suggestions or examples were presented to assist the
agency in deciding how to address this problem. Therefore, the agency
has made no special provision for dietary supplements in the type size
requirements for nutrient content claims. FDA discusses the type size
requirements for the nutrition labeling of dietary supplements in the
final rule on nutrition labeling of dietary supplements published
elsewhere in this issue of the Federal Register.
FDA stated in the technical corrections document (58 FR 44020 at
44020 and 44021) that there was a need to specify the minimum type size
for labeling information (e.g., accompanying information) required
under the nutrient content claims regulation. As a result, the agency
modified Sec. 101.2(b) to include Secs. 101.13, 101.54, 101.56, 101.60,
101.61, 101.62, and 101.65 in the list of sections set out in
Sec. 101.2(b) for which a minimum type size for required label
information is specified. For consistency, the agency also modified
Sec. 101.2(f) to include Secs. 101.13, 101.54, 101.56, 101.60, 101.61,
101.62, and 101.65.The effect of these revisions for dietary
supplements is that label information required by the nutrient content
claims regulations, but whose type size is not otherwise specified,
will be required to be in letters or numbers no less than one-sixteenth
of an inch in height unless otherwise specified by Sec. 101.2(c). FDA
believes that making nutrient content claims on dietary supplements
subject to this requirement is appropriate because this requirement is
the logical outgrowth of the proposal. In the proposal on nutrient
content claims for dietary supplements, FDA raised the issue of how to
make nutrient content claims on dietary supplements. The question of
how to ensure the legibility of the referral statement, which is
required by section 403(r)(2)(B) of the act, is one that is at least
implicitly raised by this issue. Thus, the agency's decision to
explicitly address the question of the type size of the referral
statement in this final rule represents the logical outgrowth of issues
that were raised in the proposal.
The agency pointed out in the technical corrections document that
if there are circumstances in which the product is not able to comply
with type size requirements, manufacturers may request an alternative
means of compliance (e.g., permission to use a reduced type size) in
accordance with Sec. 101.9(g)(9). Section 101.9(g)(9) states that when
it is not technologically feasible, or some other circumstance makes it
impracticable, for firms to comply with nutrition labeling
requirements, they may write to the Office of Food Labeling, Food and
Drug Administration, and request an alternative means of compliance.
For the reasons explained above, dietary supplements of herbs and other
similar nutritional substances are appropriately subject to this
provision even though it was not specifically set out in the proposal
on nutrient content claims for dietary supplements. A similar provision
is included in Sec. 101.36(d)(2) of the final regulation for nutrition
labeling for dietary supplements of vitamins and minerals, in a
companion document in this issue of the Federal Register. These
provisions allow flexibility to ensure that there will be either
sufficient space to make nutrient content claims on the labels of
dietary supplements, or that manufacturers will have recourse to
request relief.
b. Disclosure levels
6. One comment stated that there are a certain number of products,
such as chewable tablets containing sodium ascorbate, for which
information on sodium might be useful to consumers in maintaining
healthy diets. The comment suggested that the agency urge supplement
manufacturers to include information on sodium content, even though the
sodium level might not reach the threshold levels established in
Sec. 101.13(h)(1) that would trigger a required statement.
The agency disagrees that there is a sufficient basis for requiring
either the declaration of total sodium content on the principal display
panel of a dietary supplement or for requiring a referral statement
directing the consumer to the nutrition label for information about
sodium content on all dietary supplements. Section 101.13(h)(1)
specifies that the referral statement (i.e., ``See [appropriate panel]
for information about [nutrient requiring disclosure] and other
nutrients'') is required only when the sodium (or fat, saturated fat,
or cholesterol) content of a product exceeds the disclosure level. FDA
finds that there is no reason to provide a different rule for dietary
supplements.
To the extent, as the comment suggests, that information on sodium
content would be useful, it will be provided on the nutrition label as
long as it is present at more than an insignificant level. Section
101.36(b)(3), which lists the nutrients that must be included in the
nutrition label of a dietary supplement of a vitamin or mineral,
provides that all nutrients listed in Sec. 101.9(c), including sodium,
must be declared on the nutrition label of a dietary supplement of
vitamins and minerals, except that nutrients present at levels that
would be declared as zero shall not be declared. (For sodium, the
amount that is declared as zero is less than 5 milligrams (mg) per
serving.) Section 101.9(c) itself requires that sodium be listed on the
nutrition label of other dietary supplements. Consumers thus will be
able to readily find the amount of sodium in a product by examining the
nutrition label. Because the comment provided no basis for its
suggestion other than usefulness, FDA is not making any special
provision for the declaration of sodium on dietary supplements.
4. Relative Claims, Reference Foods, ``Modified''
7. One comment requested that the agency clarify in Sec. 101.13(j)
that for dietary supplements, the reference food may be a source of the
nutrient in either a dissimilar food within a product category or a
similar food. The comment stated that the most helpful information to a
consumer purchasing a dietary supplement often may be a comparison of
the vitamin or mineral content to a recognized source of the nutrient,
e.g., ``contains more vitamin C than two 8 oz glasses of orange
juice.'' In addition, the comment maintained that the examples used in
the proposed rule on nutrient content claims for dietary supplements
(58 FR 33731 at 33737) for comparing dissimilar foods within the same
product category (e.g., potato chips as a reference for pretzels)
generally does not apply to dietary supplements.
The agency agrees that a clarification is warranted to reinforce
that Sec. 101.13(j) applies to dietary supplements as well as to foods
in conventional food form. Section 101.13(j)(1)(i)(A) states that for
``less'' (or ``fewer'') and ``more'' claims, the reference food may be
a dissimilar food within a product category that can generally be
substituted for one another in the diet (e.g., potato chips as
reference for pretzels) or a similar food (e.g., potato chips as
reference for potato chips).
The agency agrees that adding examples that are specific for
dietary supplements will clarify that for ``less'' (or ``fewer'') and
``more'' claims, the reference food may be a dissimilar food within a
product category for which the labeled food can generally be
substituted (e.g., orange juice as a reference for vitamin C tablet) or
a similar food (e.g., one brand of multivitamin as a reference for
another brand of multivitamin). Accordingly, the agency is revising
Sec. 101.13(j)(1)(i)(A) to include these examples.
Additionally, to clarify Sec. 101.13(j)(1)(i)(B) for ``light,''
``reduced,'' ``added,'' ``fortified,'' and ``enriched'' claims, the
agency is revising this regulation to include an example of a reference
food that is a similar food (e.g., one brand of multivitamin for
another brand of multivitamin).
8. One comment agreed that the term ``modified'' would rarely be a
useful term for vitamin/mineral supplements but stated that this term
might be useful for certain dietary supplements that contain ``other
similar nutritional substances.'' The comment stated that there are
techniques for concentrating certain fish oils that are high in omega-3
fatty acids. The comment suggested that the use of the term
``modified'' might serve to distinguish products containing the
concentrated fish oils from other fish oil products that would have to
be taken several times a day to provide the same amount of fish oil and
thus result in the consumption of significantly more calories. The
comment argued that use of the term ``modified'' on dietary supplements
should be authorized to maintain the principle of consistency between
foods in conventional food form and dietary supplements.
The agency agrees. FDA has defined ``modified'' for use as part of
the statement of identity on foods to reflect the fact that a change
has been made in a food (56 FR 60421 at 60454). The term is not to be
used alone, nor is the term to be used to describe products that have
not been altered (58 FR 2302 at 2367 and 2412). Based on the comment,
the agency concludes that this term may have some limited usefulness
for dietary supplements, and thus this term may be used on such
products when they meet the conditions of Sec. 101.13(k). FDA finds,
however, that no change in Sec. 101.13(k) is necessary to authorize
this use of the term.
5. Reference Amounts
9. One comment stated that if comparative claims (e.g., ``reduced
sodium'') were to be made for dietary supplements, there need to be
reference amounts (i.e., reference amounts customarily consumed)
established so that one product recommending consumption of, for
example, one tablespoon (tbsp) per day is not compared to a product
recommending five tbsp per day. The comment argued that the proposal
allows very flexible reference amounts for supplements (i.e., whatever
the manufacturer is recommending for consumption) and suggests that
reference amounts of reference foods (as established in Sec. 101.13(j))
be specified in more concrete terms.
The agency is not persuaded by the comment that more concrete terms
are needed for reference amounts at this time. The agency has
established in the final rule on general requirements for nutrition
labeling for dietary supplements published elsewhere in this issue of
the Federal Register a definition for the reference amount customarily
consumed for dietary supplements in Sec. 101.12(b) as ``the maximum
amount recommended on the label for consumption per eating occasion or,
in the absence of recommendations, 1 tablet, capsule, packet, or
teaspoonful, as appropriate.'' This definition is based on comments
received on the proposal for mandatory nutrition labeling for dietary
supplements.
Section 101.13(p)(1), which FDA proposed to apply to dietary
supplements, states that unless otherwise specified, the reference
amount customarily consumed set forth in Sec. 101.12(b) through (f)
shall be used in determining whether a product meets the criteria for a
nutrient content claim. The comment did not suggest an alternative to
the reference amount that could be used as the basis for comparative
claims for dietary supplements. Therefore, given the fact, as the
agency said in the proposal on nutrient content claims for dietary
supplements (58 FR 33731 at 33732), that a consistent approach to
nutrient content claims on dietary supplements and on foods in
conventional food form will increase consumers' ability to use and
understand such claims, FDA is not adopting a different approach to
comparative claims for dietary supplements than the one that it adopted
for foods in conventional food form.
The agency acknowledges that there is a potential for unfair
marketing and misleading claims if the serving size is manipulated
upwards or downwards to enable a product to make a nutrient content
claim. The agency retains the authority to regulate any such misleading
claims under section 403(a) of the act. Issues concerning serving size
are further discussed in the companion document on nutrition labeling
for dietary supplements, published elsewhere in this issue of the
Federal Register.
IV. Definitions for Specific Nutrient Content Claim Terms
A. Use of RDI's and DRV's in Formulating Definitions
10. Many comments stated that limiting nutrient content claims to
those nutrients with RDI's or DRV's was unnecessarily restrictive.
Several comments suggested that content claims should be authorized
with respect to a nutrient as long as it has either an RDI or DRV as
established by FDA in Sec. 101.9(c) or a Recommended Dietary Allowance
(RDA) as established by the National Academy of Sciences (NAS) (Ref.
4). Other comments also stated that nutrient content claims should be
authorized for nutrients for which NAS has established Estimated Safe
and Adequate Daily Dietary Intakes (ESADDI's). Other comments suggested
that FDA should expand the number of vitamins and minerals with RDI's
when it publishes the final RDI/DRV rule following the expiration of
the DS act moratorium.
FDA agrees that the current list of RDI's does not represent the
entire list of nutrients for which dietary recommendations have been
established. The agency had proposed to establish RDI's for all
nutrients for which RDA's or ESADDI's were provided in the 1989 edition
of the NAS RDA's (56 FR 60366). However, under the DS act, the agency
was constrained to retain the label reference values established in
Sec. 101.9(c)(8)(iv) until at least November 8, 1993. These values were
based on the 1968 RDA's. The 1968 RDA's did not contain recommended
dietary values for a number of nutrients for which NAS has subsequently
provided RDA's or ESADDI's. RDA's for vitamin K and selenium were
established subsequent to 1968 and are listed in the 1989 edition of
the NAS RDA's (Ref. 4). Furthermore, the 1980 and 1989 editions of the
NAS RDA's provided ESADDI's for chloride, manganese, fluoride,
chromium, and molybdenum. Now that the moratorium established by the DS
act has expired, the agency is proposing elsewhere in this issue of the
Federal Register to establish RDI's for all nutrients for which RDA's
or ESADDI's are provided in the 1980 and 1989 editions of the NAS's
Recommended Dietary Allowances but for which RDI's or DRV's have not
been established by FDA. Once RDI's are established for these
additional seven nutrients, nutrient content claims may be made for
them.
FDA intends to consider revising all of the RDI's to conform to the
most recent levels established by NAS. However, FDA is aware that NAS
is in the process of reevaluating the basis on which RDA's are
determined. It is considering the issue of whether values should be
selected to prevent deficiencies or to promote optimal wellness. The
agency believes that its action should await completion of the NAS
process. FDA is committed to working with NAS to help resolve this
issue.
Accordingly, as stated in response to comment number 1 above, FDA
has concluded that it is not possible to define nutrient content claims
for nutrients for which no reliable reference standards such as the
RDI's and DRV's have been established. The agency believes that
authorization for nutrient content claims for nutrients for which no
RDI or DRV exists (e.g., vitamin K) needs to be deferred until RDI's or
DRV's are adopted. In the interim, quantitative nutrient information
may be listed in the nutrition label as discussed in the final rule on
general requirements for nutrition labeling for dietary supplements
published elsewhere in this issue of the Federal Register.
Also, manufacturers may provide amount or percentage statements as
described in Sec. 101.13(i)(3) for those nutrients that do not have
RDI's or DRV's. For example, while there is no RDI for fluoride, under
this provision, manufacturers may declare the amount of the nutrient
present (e.g., 2 mg fluoride) on any panel outside of the Nutrition
Facts box.
11. One comment stated that claims should be permitted for beta-
carotene.The agency believes that claims regarding beta-carotene (e.g.,
``contains beta-carotene'') are claims about an ingredient that make
implied representations about the level of vitamin A that is present in
the food as beta-carotene. This conclusion is consistent with section
403(r)(1)(A) of the act, which states that a food can be misbranded by
a statement that expressly or by implication characterizes the level of
a nutrient in a food. The agency considers that the claim ``contains
beta-carotene'' implies that there is enough beta-carotene in the food
to constitute a ``good source'' of vitamin A (i.e., it contains 10
percent or more of the DV for vitamin A from beta-carotene). Such a
claim is provided for in Sec. 101.65(c).
12. One comment advocated defining nutrient content claims for
ultratrace nutrients including boron, silicon, vanadium, arsenic, and
tin. The comment stated that claims about these ultratrace elements
should be permitted on the basis of the RDA, ESADDI, or the amounts
found in the average well-balanced diet. Additionally, this comment
argued that reference values should be available for ultratrace
nutrients once reputable scientific evidence is established that such
nutrients serve important metabolic or physiological functions in the
body. The comment also suggested that label information be permitted
for choline and inositol.
The agency disagrees. The trace elements arsenic, nickel, silicon,
boron, cadmium, lead, lithium, tin, vanadium, and cobalt, as well as
choline and inositol, have not been shown to be essential in humans. No
RDA's or ESADDI's for these substances have been established by NAS.
NAS states that several of these substances ``naturally present in
foods are known to be required in the diets of various animal or
microbial species, but there is little or no evidence of their dietary
essentiality for humans'' (Ref. 4). While NAS acknowledges that some of
these classes of substances may ``one day be candidates for RDA's,'' it
states that there is currently no evidence that these substances are
essential in humans (Ref. 4).
As stated in the ``Summary'' section of the 10th edition of the NAS
RDA publication (Ref. 4), the NAS RDA's are based not only on data from
nutrient intake measurements but also on information from nutrient
balance studies, experimental intake studies, biochemical measurements,
epidemiological observations of nutrient status, and extrapolation of
data from animal experiments. FDA does not agree with the comments that
it is desirable to base label reference values for nutrient content
claims solely on individual scientific research publications, no matter
how current, or solely on data on amounts of the trace element found in
well-balanced diets. The existence of such data does not mean that
there is scientific agreement on the essentiality of the nutrient or on
the recommended level in the diet. Should agreement on the essentiality
of additional nutrients be reached, timely and appropriate changes to
the label reference values can be made through FDA's rulemaking
procedures.
However, as stated above, manufacturers are free to declare the
amount of the trace elements, or choline or inositol, on the product
label outside of the ``Nutrition Facts'' panel in accordance with
Sec. 101.13(i)(3). Such a statement of amount is not considered to
characterize the level of the nutrient in the food, as would claims
such as ``high'' or ``more.''
13. One comment stated that although no RDI's have been established
for certain vitamins and minerals, nutrient content claims could be
based on reference foods that are recognized sources of those
nutrients. For example, the label could state that ``Brand X provides
more vitamin K than two servings of cabbage,'' based on the vitamin K
content of the reference amount for vegetables without sauce listed in
Sec. 101.12, Table 2.
The agency disagrees. Until a reference standard is established
there is no basis for confidence that cabbage is a good source of
vitamin K. There is also no basis for confidence that the amount of
vitamin K in the food that is to be the subject of the claim is
nutritionally significant. Elsewhere in this issue of the Federal
Register, the agency has proposed to expand the list of nutrients with
RDI's, including vitamin K. At this time, however, FDA concludes that
it would be premature to authorize such claims.
B. Specific Requirements for Nutrient Content Claims (21 CFR 101,
Subpart D)--Applicability to Dietary Supplements
1. Sec. 101.54 Nutrient Content Claims for ``Good Source,'' ``high,''
and ``More''
a. ``Good source'' and ``high''
14. One comment encouraged the agency to maintain the proposed
definitions for ``good source'' and ``high'' for dietary supplements.
The comment argued that a higher level (e.g., 40 percent of the RDI)
would suggest to consumers that daily nutrient intakes could be
achieved by consuming only a few foods, which is inconsistent with
dietary guidelines. The comment maintained that if a new higher claim
level was adopted for supplements, it would likely also apply to foods
in conventional food form based on the logic of the proposal for
nutrient content claims for dietary supplements (i.e., consistency in
definitions). The comment stated that users of dietary supplements are
well aware of the elevated nutrient levels in these products, and that
a new paradigm is not needed to inform consumers of these levels.
On the other hand, several comments did not support the proposal to
use the same definitions for ``good source'' and ``high'' claims as
those used for foods in conventional food form. The comments argued
that the terms ``good source'' and ``high'' should not carry the same
meaning for supplements as for foods in conventional food form, that
most supplements contain at least 100 percent of the Daily Value for
most of the nutrients they provide, and that consumers expect most of
these products to contain at least 100 percent of the Daily Value. The
comments maintained that allowing any product with as little as 10 or
20 percent of the RDI to carry ``good source'' and ``high'' claims
would confuse and mislead consumers.
One comment questioned whether it is appropriate to permit the use
of these nutrient content claims on vitamins and mineral supplements
since it implies that supplements are comparable to, and acceptable
substitutes for, foods in conventional food form. The comment also
noted that nutrition educators feel strongly that supplements can
enhance the nutrient intake from foods in conventional food form but
can never replace them since foods in conventional food form provides
other important components. On the other hand, many comments supported
the proposal to extend the same definitions for ``good source'' and
``high'' for foods in conventional food form to dietary supplements.
These comments emphasized the importance of consistency in definitions
to assist consumer education.
One comment requested clarification on whether the terms ``good
source'' and ``contains'' will be permitted for dietary supplements.
The comment maintained that such claims provide consumers with
important information regarding the precise content of various
nutrients and should not be subject to discriminatory treatment solely
on the basis of whether such claims are made for a nutrient in a
dietary supplement as opposed to one in a conventional food.
The agency has reviewed these comments and is not persuaded that
the definition of the terms ``good source'' and ``high'' should be
different for dietary supplements than for foods in conventional food
form. The agency finds that the definitions for foods in conventional
food form and dietary supplements should be consistent. As directed by
the 1990 amendments (section 3(b)(1)(A)(iii)(VI)), FDA defined the term
``high,'' and the synonyms ``rich in'' and ``excellent source of,'' for
use on labels and in labeling in Sec. 101.54 (58 FR 2302 at 2344). In
Sec. 101.54(c)(1) of final rule on nutrient content claims, the agency
stated that the term ``good source'' may be used to describe a food
when a serving of the food contains 10 to 19 percent of the RDI or the
DRV for a nutrient. Likewise, the agency stated that the term ``high''
may be used to describe a food when a serving contains 20 percent or
more of the RDI or the DRV. FDA concluded that the use of these terms
would permit a sufficient number of food items to bear ``good source''
and ``high'' claims to allow consumers to use the claims in selecting
foods that are better sources of nutrients (58 FR 2344).
While FDA recognizes that under the present definitions, most, if
not all, dietary supplements of vitamins, minerals, potassium, and
fiber would qualify for ``good source'' or ``high'' claims, the agency
does not agree with those comments that argued that the definitions, as
proposed, would be confusing or misleading to consumers. As suggested
by the IOM report on nutrition labeling (Ref. 6), the use of consistent
and targeted content claims increases consumers' confidence in the
validity of the claim. FDA is aware of no evidence to support an
alternate conclusion. The basic principle of consistency in definitions
of nutrient content claims is discussed in detail in comment 2 of this
document.
Furthermore, the agency recognizes that consumers expect dietary
supplements to be concentrated sources of nutrients. Consumer studies
support this conclusion (Refs. 1 and 5). FDA acknowledges that the
terms ``good source'' and ``high'' might be of limited utility in
comparing nutrient content among dietary supplements of vitamins and
minerals because virtually the entire class of products would qualify
for such claims. However, these terms may be useful for some single
source dietary supplements of calcium, biotin, or fiber or for
multinutrient preparations containing these nutrients. These nutrients
are generally found in dietary supplements at levels below the Daily
Value.
Additionally, FDA believes that these terms would be useful in
highlighting the nutrient content of some herbs and other similar
nutritional substances that have nutrients at levels high enough to
qualify for the definition of one of the above terms. For these
reasons, the agency is not persuaded to preclude the use of these terms
for dietary supplements.
The agency agrees with the comment that stated that dietary
supplements cannot replace foods in conventional food form in all
respects because the latter foods supply other important components.
However, FDA recognizes that dietary supplements can be a useful part
of the diet for those who wish to make sure that they consume at least
the RDI amount for all vitamins and minerals or for those who wish to
increase their daily intake of a particular substance above those
levels that are ordinarily available from conventional foods. Thus, FDA
finds that use of these terms on dietary supplements is appropriate.
FDA is convinced that consistency in definitions of nutrient
content claims across the food supply is necessary. Consistency
facilitates consumer education by limiting the number of terms that the
public must learn and interpret. Moreover, different definitions for
the same terms for dietary supplements and foods in conventional food
form would be confusing to consumers because of the difficulties
inherent in learning alternate definitions for the same term. There is
a greater chance of error and misinterpretation when several
definitions must be learned for the same term. Thus, different
definitions would likely do more harm than good. Accordingly, the
agency concludes that the proposed definitions for ``good source'' and
``high'' are appropriate, and that there is no reason to define the
terms differently for dietary supplements.
The agency would like to clarify that ``good source'' and
``contains'' as defined Sec. 101.54(c)(1) are nutrient content claims
that can be used for foods in conventional food form as well as for
dietary supplements. There is nothing in this final rule that states
that the use of these terms would not be allowed for dietary
supplements.
15. One comment stated that under FDA's proposal, consumers who
want truly high levels--that is, levels that exceed the RDI--would have
no means of identifying those products, other than reading the fine
print on the back of each supplement label.
The comment acknowledged that consumers might also be confused if
``high'' had one meaning when the claim appears on labels of dietary
supplements and a different meaning when the claim appears on labels of
foods in conventional food form. To avoid that inconsistency, the
comment urged FDA to prohibit the claims ``good source'' and ``high''
on supplements. Further, the comment suggested that the agency should
define the term ``high potency'' and allow it to be used only on
supplements.
FDA disagrees that the terms ``good source'' and ``high'' should be
prohibited on the labels of dietary supplements. The agency recognizes
that a claim of ``high'' will not specifically identify those products
that have levels of nutrients that exceed the RDI. However, the
quantitative amount of a nutrient in a dietary supplement is often a
part of the statement of identity for the product, and additional
quantitative information regarding the level of a nutrient may also be
found in amount or percentage statements on the principal display
panel. In addition, as a result of the agency's new format
requirements, the nutrition label for dietary supplements of vitamins
and minerals provides quantitative information on the levels of
specific nutrients as well as the percent DV for each nutrient in a
more legible format. Consequently, consumers will have easy access to
information regarding the levels of specific nutrients and may adjust
their levels of intake accordingly.
Further, as discussed in the previous comment, while the terms
``good source'' and ``high'' may be of limited utility for dietary
supplements of vitamins and minerals, these terms may be useful in
highlighting the nutritional content of single nutrients, such as
biotin and calcium, that are generally found in products at levels well
below the RDI, as well as of dietary supplements of herbs and other
similar nutritional products. Therefore, FDA concludes that precluding
the use of these terms on dietary supplements is unjustified.
However, FDA believes that there is a sufficient basis to consider
defining the term ``high potency'' or some similar term as a nutrient
content claim. FDA's tentative view is that this term, or a similar
term when defined, could provide a way for manufacturers to describe
the higher levels of nutrients in dietary supplements. (See comment 25
for further discussion of this matter.)
b. ``More''
16. One comment stated that consumers could be misled if
comparative claims are made among high potency vitamin/mineral
supplements. The comment stated that if, for example, one brand of 300-
mg vitamin B6 tablets claimed that it contained ``more'' than a
competitive 250-mg product, then the consumer may get the misleading
impression that the former product is better. The comment maintained
that as customers shop for supplements, they will be able to readily
observe whether one product is more potent than another without label
claims suggesting superiority of one over another. If such a claim
resulted in better sales, then a ``horsepower race'' would ensue. The
comment recommended that ``more'' claims for vitamins and minerals not
be allowed if the nutrient potency of the reference product already
meets or exceeds 100 percent of the Daily Value.
The agency acknowledges that there is the possibility that some
manufacturers may choose to increase potencies in order to make a
``more'' claim in comparison to another brand, but the agency disagrees
that the limitation suggested by the comment is warranted at this time.
The agency points out that ``more'' claims for nutrients with an RDI or
DRV, including those products with nutrients in megadoses, such as
those in the example cited by the comment, must include the following
information: The percentage (or fraction) that the nutrient was
increased relative to the RDI or DRV, the identity of the reference
food, and the quantitative amount of the nutrient present (e.g.,
contains ``20 percent more of the DV for vitamin B6 per tablet than
product `x'. The vitamin B6 content of product `x' is 250 mg. This
product contains 300 mg vitamin B6.'') The nutrition label of a product
containing 300 mg of vitamin B6 must state that the product contains
1,500 percent of the Daily Value. The agency acknowledges that the
amount of information required to make a ``more'' claim is
considerable, but such information is necessary to allow consumers to
readily see how the amount of a nutrient for which a ``more'' claim is
made fits into the total daily diet.
Furthermore, FDA believes that the concern regarding ``horsepower
races'' in dietary supplements stems from concerns of possible unfair
marketing among manufacturers as well as from safety concerns inherent
in the addition of very high levels of nutrients to supplements.
Similar concerns with foods in conventional food form led to the
establishment of FDA's fortification policy in 1980. This policy, while
published in Sec. 104.20, does not have the force of a regulation.
However, the agency has not found evidence of widespread ``horsepower
races'' with such foods. The agency urges industry, particularly
industry associations, to develop standards regarding nutrient levels
and to monitor compliance with those standards to minimize any safety
problems.
c. Restrictions on label or labeling claims based on section
411(b)(2)(B) of the act
17. One comment from a trade association stated that the literal
reading of section 411(b)(2)(B) of the act prohibits giving prominence
on the label of dietary supplements of vitamins or minerals to
ingredients that are not vitamins or minerals. The comment argued that
these prohibitions result in the withholding of information that is of
interest to consumers, and that it is increasingly common for
manufacturers to market products that offer a combination of vitamins,
minerals, herbs, and other dietary substances. The comment stated that
the principal reason for the purchase of these products is not their
vitamin and mineral content but the other ingredients. The comment
invited FDA to join the supplement industry in seeking an amendment to
section 411 of the act that will remedy this problem.
Another comment disagreed with FDA's interpretation of section
411(b)(2)(B) of the act and suggested that this section merely
prohibits giving prominence or emphasis to such ingredients. The
comment argued that nutrients other than vitamins and minerals or
sources of vitamins and minerals should be permitted to appear outside
or immediately following the nutrition label, providing that such
information is not emphasized by, for example, being presented in type
size greater than that used in the nutrition label. The comment stated
that such limited declarations would not conflict with current
provisions of the act and would be fair and reasonable means of
communicating about the presence of ingredients that provide added
value to many dietary supplement products.
The agency is persuaded by these comments that a clarification of
those sections of the proposal relating to section 411(b)(2)(B) of the
act is needed. Section 411(b)(2)(B) of the act states that the labeling
and advertising for dietary supplements of vitamins and minerals may
not give prominence to or emphasize ingredients that are not vitamins,
minerals, or represented as a source of vitamins or minerals. Because
of this provision, nutrient content claims about ingredients that are
not vitamins or minerals (e.g., ``more fiber,'' ``high protein'') may
not be made on dietary supplements of vitamins or minerals.
It must be emphasized that this provision pertains only to dietary
supplements of vitamins and minerals. If, for example, an herbal
extract includes vitamins and minerals but is labeled as an herbal
extract, in compliance with Sec. 101.9 and other applicable provisions,
and is advertised as such, section 411(b)(2)(B) of the act would not
apply. The same is true for a product that is primarily a protein
supplement. A protein supplement with added vitamins and minerals that
is labeled and advertised as a protein supplement could declare that it
is high in fiber. Such claims are permissible as long as they are made
in accordance with section 403(r) of the act, and they are not false or
misleading in any particular.
However, section 411(b)(2)(B) of the act makes clear that in the
labeling and advertising of dietary supplements of vitamins and
minerals, ingredients other than vitamins or minerals cannot be
emphasized or given prominence. FDA interprets prominence not solely as
a function of type size. Declaring an ingredient outside or immediately
following the nutrition label is another means of giving prominence.
For example, a statement such as ``5 g psyllium,'' except in extremely
limited circumstances, cannot be made on the principal display panel,
outside the nutrition label, or immediately following the nutrition
label of a dietary supplement of vitamins and minerals because such
placements give prominence to that ingredient. However, the declaration
of psyllium in the ingredient list would not be construed as giving
prominence to that ingredient. On the other hand, ``5 g psyllium''
could be declared in an amount statement on the principal display
panel, outside, or immediately following the nutrition label on protein
supplements, on dietary supplements of herbal extracts, and on dietary
supplements of other similar nutritional substances so long as these
dietary supplements are not subject to section 411 of the act.
FDA advises that if a sugar is an ingredient in a dietary
supplement of vitamins or minerals, claims about the amount of sugar
actually in the product would have to be restricted. However, ``sugar-
free'' and ``no added sugar'' are absence claims that assert that sugar
is not an ingredient. The agency concludes that the use of these terms
is acceptable on dietary supplements of vitamins or minerals, as well
as on other types of dietary supplements.
In view of this clarification, the agency believes that section
411(b)(2)(B) of the act, as written, is sufficiently flexible to
accommodate claims on products that are not dietary supplements of
vitamins or minerals. FDA believes that it is therefore unnecessary to
amend section 411 of the act.
2. Nutrient Content Claims for Sugar Content
18. One comment questioned the appropriateness of allowing ``sugar-
free'' claims for a dietary supplement containing less than 0.5 g of
sugars. The comment stated that many supplements come in capsules or
tablets that weigh slightly less or not much more than 0.5 g, and
therefore, supplements that are mostly sugars could use the term
``sugar-free.'' The comment suggested that the term ``sugar free'' on a
dietary supplement should mean a much lower amount of sugars, or that
the product should be totally devoid of sugars.
The comment also argued that terms such as ``negligible source of
sugar,'' ``dietarily insignificant source of sugar,'' and ``trivial
source of sugar'' are not synonymous with ``sugar-free'' because such
terms connote the presence of some sugar content.
FDA is not persuaded by the comment that 0.5 g or less of sugars
per serving is an inappropriate definition of insignificance for sugars
for dietary supplements. Section 101.60(c)(1) provides that for a food
in conventional food form to make a ``sugar free'' claim, the food must
contain less than 0.5 g of sugars per reference amount. Less than 0.5 g
of sugars per reference amount is an amount that is consistent with the
agency's policy of defining ``free'' claims at or near the reliable
limit of detection and in an amount that is dietetically
inconsequential (56 FR 60421 at 60432). As a result, even frequent
consumption of a food bearing a ``sugar free'' claim would not result
in an intake of sugars that would affect the overall diet in any
meaningful way.
FDA acknowledges that there may be situations in which a dietary
supplement may contain a significant proportion of sugars on a weight
basis and be able to make the claim ``sugar free.'' The agency
believes, however, that even in such instances, if the total amount of
sugars in a serving of the product is less than 0.5 g, its net
contribution to the total daily diet would be inconsequential.
Additionally, FDA considers it important that nutrient content
claims correspond with the nutrition label, which serves as a source of
specific information for consumers concerning the nutritional value of
the food. The nutrition labeling regulations allow foods containing
less than 0.5 g sugars per labeled serving to declare 0 g of sugars
(Secs. 101.9(c)(6)(ii) and 101.36(b)(3)).
FDA rejects the suggestion that it permit use of the term ``sugar
free'' only where there is an absolute absence of sugars. FDA believes
that it is appropriate to apply the term ``free'' to a nutrient when a
food contains that nutrient in a dietetically trivial or
physiologically inconsequential amount, even though the nutrient is
present at a level at or near its reliable limit of quantitation,
because with modern analytical methods, the level at which the presence
of a nutrient may be quantified is becoming increasingly smaller (58 FR
2302 at 2320). The agency believes that it is appropriate to focus on
dietary insignificance, and very trivial amounts have no impact on the
diet for the purpose of defining ``sugar free.''
The agency also disagrees that the terms ``negligible source of
sugar,'' ``dietarily insignificant source of sugar'', and ``trivial
source of sugar'' are inappropriate synonyms for ``sugar free.''
Section 403(r)(2)(A)(i) of the act states that a nutrient content claim
must be defined by regulation. In addition, section (3)(b)(1)(A)(ix) of
the 1990 amendments provides that those regulations may include similar
terms commonly understood to have the same meaning. The agency is not
aware of any reason why the above terms are inappropriate synonyms for
``sugar free.'' Although these synonyms do not convey the absolute
absence of sugar, they reflect that the amounts are dietetically
trivial and of no dietary significance. Therefore, the agency rejects
this comment.
19. One comment stated that the term ``no added sugar'' can be used
only when a product is expected to contain sugar, but that consumers do
not know when supplements are expected to contain sugars. The comments
suggested that FDA should not preclude the use of the term ``no added
sugars'' as this term would be useful to consumers in identifying those
products without sugar.
The agency is persuaded that a review of the conditions for the use
of the term ``no added sugar'' is warranted. FDA did not propose to
preclude the use of the term ``no added sugar'' on all dietary
supplements. The agency finds that this term is appropriate for some
dietary supplements, such as children's chewable vitamins, that are
frequently sweetened. Section 101.60(c)(2) states that the terms ``no
added sugar,'' ``without added sugar,'' or ``no sugar added'' may be
used only if: (1) No amount of sugars, as defined in
Sec. 101.9(c)(6)(ii), or any ingredient that contains sugars, or that
functionally substitutes for added sugars is added during processing or
packaging, (2) the product does not contain an ingredient containing
added sugars, (3) the sugars content has not been increased above the
amount present in the ingredients by some means such as the use of
enzymes, (4) the food that it resembles and for which it substitutes
normally is formulated with sugars, and (5) the product bears a
statement that the food is not ``low calorie'' or ``calorie reduced''
(unless the food meets the requirements for a ``low'' or ``reduced
calorie'' food) and that directs consumers' attention to the nutrition
label for further information on sugar and calorie content.
As is the case for foods in conventional food form, the agency
believes that to avoid misleading consumers, the term ``no added
sugar'' should be limited to dietary supplements that would be expected
to contain added sugars. The agency advises that the purpose of a ``no
added sugar'' claim is to identify a food that differs from a similar
food because it does not contain the added sugars that would normally
be present in the similar food. For this provision to be of practical
benefit to consumers, it must preclude the use of the claim on a food
where the sugars that are normally added are replaced with an
ingredient that contains sugars that functionally substitute for the
added sugars
FR Doc. 93-31814 Food Labeling; Requirements for Nutrient Content Claims for Dietary Supplements of Vitamins, Minerals, Herbs, and Other Similar Nutritionnal Substances
. Thus, the agency concludes that the use of any ingredient
that contains sugars that would normally be added to a food precludes
the use of the ``no added sugar'' nutrient content claim. The agency
believes that claims concerning the absence of added sugars on products
that would not normally contain added sugar (e.g., dietary supplements
of vitamins and minerals for adults) are likely to mislead consumers
into thinking that a particular brand may be more desirable when
compared to other brands of the same product.
FDA acknowledges that consumers may not know every type of product
that could be expected to contain sugar. However, the final rule on
nutrition labeling for dietary supplements published elsewhere in this
issue of the Federal Register specifies that sugars will be listed in
the ingredient label and must be declared in the nutrition label if
present in more than insignificant amounts. Through these provisions
the consumer can readily ascertain which products contain sugars.
C. Implied Nutrient Content Claims
1. Claims That are not Nutrient Content Claims
Section 101.65(b)(1) of the final rule on nutrient content claims
provides that statements that declare the absence of food components or
ingredients that are not nutrients of the type required to be declared
on the nutrition label, and that are intended to facilitate avoidance
for such reasons as food intolerance (e.g., lactose free), religious
beliefs, dietary practices such as vegetarianism or other nonnutrition
related reason, (e.g., ``100 percent milk free''), are not nutrient
content claims. In the proposal on nutrient content claims for dietary
supplements, the agency tentatively concluded that this paragraph is
applicable to dietary supplements and requested comment on other
examples that are appropriate for dietary supplements.
20. Comments suggested that other examples of terms in this
category include the following: gluten free, wheat free, corn free,
yeast free, starch free, milk free, egg free, soy free, no artificial
ingredients, nonirradiated, and no synthetic ingredients. The comments
requested that FDA confirm that these statements are allowed on the
label.
None of the terms that were submitted in the comments other than
``egg free'' would constitute nutrient content claims. The term ``egg
free'' can be interpreted as an implied claim about cholesterol.
The agency points out that it does not currently have a definition
for ``artificial'' except as that term applies to flavors and colors.
Similarly, it has no definition for ``synthetic'' except as that term
applies to flavors and colors. Although these terms have not been
defined by FDA, the agency believes that they are not nutrient content
claims unless they are used in a context in which they explicitly or
implicitly describe the level of a nutrient. However, even if these
terms are not nutrient content claims, manufacturers who use them must
make sure that their use is not false or misleading.
21. FDA proposed to include dietary supplements in the coverage of
Sec. 101.65(b)(4). This section states that when an ingredient
constitutes essentially 100 percent of a food, so that the name of the
ingredient is the statement of identity, the name of the ingredient
generally does not constitute an implied nutrient content claim unless
it is used in a context to suggest that a nutrient is absent or present
in a certain amount. FDA used a statement of identity for a dietary
supplement in which an ingredient constitutes essentially 100 percent
of a supplement (e.g. ``60 mg--vitamin C'') as an example. One comment
pointed out that 60 mg vitamin C tablets contain excipients (fillers,
binders, lubricants, disintegrants) other than vitamin C. The comment
requested clarification as to whether, in the example of vitamin C
tablets, Sec. 101.65(b)(4) requires that the amount claimed in the
statement of identity constitute 100 percent of the claimed amount of a
food in Sec. 101.65(b)(4).
In the example added to Sec. 101.65(b)(4), the amount refers to the
claimed nutrient. A tablet stating ``60 mg--vitamin C tablets'' should
contain 60 mg of that nutrient. The agency recognizes that a nutrient
will not constitute precisely 100 percent of some dietary supplements,
such as vitamin tablets or capsules, and advises that small amounts of
excipients, binders, lubricants, or disintegrants added for
technological purposes are allowable in addition to the stated nutrient
content.
Additionally, FDA points out that under Sec. 101.3(c), if a food is
marketed in various optional forms, the particular form is a necessary
part of the statement of identity. Because vitamin C is marketed in
tablet, capsule, and liquid form, the form is part of the name.
Therefore, this food should be called ``60 mg-vitamin C tablets.'' The
agency acknowledges an error in this regard in the proposal and is
revising Sec. 101.65(b)(4) to make the correction.
22. One comment stated that it is not unusual for a dietary
supplement to contain several nutrients of one type and a single
nutrient of another type, such as ``multiple-vitamins with iron.'' The
comment requested confirmation that ``with iron'' would not represent
an implied nutrient content claim.
The agency advises that a term such as ``with iron,'' when used on
the statement of identity of a supplement, is intended to describe the
nature of the food. When a statement of identity simply states ``with
iron'' or specifies the amount of iron in a product (e.g.,
``multivitamin with 15 mg iron''), the statement is not a nutrient
content claim. Such statements fall under Sec. 101.65(b)(5).
However, as the agency stated in Sec. 101.65(b)(5), there may be
cases in which other statements on the label or labeling would have the
effect of making the statement into a nutrient content claim. For
example, if the labeling of a multivitamin with iron includes a
discussion of the importance of iron in the diet, FDA believes the
statement ``with iron'' would be an implied claim that the multivitamin
is a good source of iron. If the labeling is devoid of such
information, FDA would be unlikely to consider the name to be an
implied nutrient content claim. The agency will evaluate such claims on
a case-by-case basis in the context of the entire label and labeling to
determine whether they are nutrient content claims.
23. One comment maintained that FDA failed to address whether the
currently used claim of ``high in antioxidants'' was within the scope
of the proposed regulation.
While the term ``high in antioxidants'' was not explicitly
discussed in the proposed regulations for nutrient content claims for
dietary supplements, the agency considers it to be an implied nutrient
content claim that would come under Sec. 101.65. FDA's view is that
this claim implies that the food on which it appears contains a
``high'' amount (i.e., at least 20 percent of the RDI, see
Sec. 101.54(b)(1)) of each antioxidant. One problem with this claim,
however, is that there is no established definition of
``antioxidants.''
FDA believes that a logical place to start in defining this term is
section 3(b)(1)(A)(x) of the 1990 amendments. That provision directed
FDA to determine whether a health claim on antioxidant vitamins and
cancer, could be authorized under the standard that it established for
dietary supplements under section 403(r)(5)(D) of the act. In its
proposed regulations to implement the 1990 amendments, in response to
this provision, FDA considered the effects of vitamin C, vitamin E, and
beta-carotene on cancer because these nutrients are the vitamins or
provitamins that function as antioxidants (56 FR 60624, November 27,
1991). In the final rule on antioxidant vitamins and cancer, FDA
concluded that its selection of these nutrients was appropriate (58 FR
2622, January 6, 1993). Thus, the agency has determined that the
direct-acting antioxidant vitamins or provitamins include vitamin C,
vitamin E, and beta-carotene. Based on its review of the information
presented at a recent conference entitled ``Antioxidant Vitamins and
Cancer and Cardiovascular Disease,'' which was initiated by FDA, the
agency is not aware of any basis to expand this list because the
biological role of other vitamins as direct antioxidants has not been
confirmed (Ref. 3).
While it is arguable that FDA could authorize ``high in
antioxidants'' as an implied claim pertaining to antioxidant vitamins
as a logical outgrowth of the proposal, because the claim applies to
foods in conventional food form as well as to dietary supplements, the
agency believes that the better course is to propose to authorize such
a claim. In addition, the definition of ``antioxidants'' is not free
from controversy. The agency is aware, based on its review of dietary
supplements whose labeling currently includes a ``high in antioxidant''
claim, that some manufacturers view this term as including certain
minerals. Antioxidant minerals have not been addressed by the agency,
and, therefore, final rules implementing the 1990 amendments do not
provide for claims about them. Thus, FDA finds that a rulemaking on the
definition of ``antioxidants'' will provide an opportunity to establish
the precise meaning of this term.
Consequently, FDA intends to address this issue as quickly as
possible in a forthcoming proposal. Given that, elsewhere in this issue
of the Federal Register, the agency is establishing a date of
applicability of July 5, 1995, for this regulation, FDA anticipates
that there is sufficient time to take final action on such a proposal
before that date.
2. ``Healthier''
24. One comment from a manufacturer observed that FDA proposed a
regulation concerning use of the term ``healthy'' (proposed
Sec. 101.65(d)(2) (58 FR 2949)) in the January 6, 1993 Federal Register
(58 FR 2944 at 2949). The comment notes that ``healthy'' and similar
terms are used in a variety of contexts. For example, one of the
manufacturer's dietary supplements is labeled as ``the way to
a healthier life.'' The comment suggested that this claim should not be
deemed to be subject to the ``healthy'' definition.
FDA advises that it is in the process of finalizing regulations on
the January 6, 1993, proposal for the claim ``healthy.'' The use of
terms such as ``healthy,'' ``healthier,'' ``healthiest'' will be
addressed in that final rule.
In its final rule on nutrient content claims, FDA concluded that a
claim that a food, because of its nutrient content, may be useful in
maintaining healthy dietary practices is a claim that characterizes the
level of a nutrient in that food (58 FR 2302 at 2375). Accordingly, the
agency provided in Sec. 101.65(d)(1) that such statements are implied
nutrient content claims and are subject to the requirements of section
403(r) of the act.
However, the agency also stated that when a term such as
``healthy,'' ``wholesome,'' or ``nutritious'' appears on a food label
in a context that does not render it an implied nutrient content claim,
it is not subject to the requirements of section 403(r) of the act (58
FR 2302 at 2375). Under such conditions, the use of the term is subject
to section 403(a) of the act, and FDA will consider whether it is
misleading on a case-by-case basis. The agency intends to give more
specific guidance in the final rule on ``healthy.''
1. General Nutrition Claims Such as ``High Potency,'' ``High
Absorption,'' and ``Balanced''
a. General issues
In the proposal on nutrient content claims for dietary supplements,
FDA requested comment on terms, ``high potency,'' ``high absorption,''
and ``balanced,'' which are often encountered on labels or in labeling
of dietary supplements and which seem to imply that the dietary
supplement will contribute to good health (58 FR 33731 at 33748). The
agency requested comment on whether there are established meanings for
these terms, and, if so, whether they characterize the level of the
nutrients in the food. FDA stated that if comments demonstrate that
there are accepted definitions used in the dietary supplement industry
for these terms that characterize the level of nutrients, and that if
it determines that these definitions will assist consumers in
maintaining healthy dietary practices, FDA will proceed with further
rulemaking to adopt the definitions or to propose new ones.
FDA also stated that if the agency agrees that such terms are
nutrient content claims, under the provisions of the statute, such
claims would be prohibited after the effective date for final rules,
until such time as they are defined by FDA by regulation. Further, FDA
stated that if comments demonstrate that there are accepted definitions
for these terms, and they do not characterize the level of nutrients,
in accordance with Sec. 101.65(d)(1) such terms would not be subject to
section 403(r) of the act unless used in a nutritional context in
association with an explicit or implicit claim or statement
characterizing the nutrient content of the food.
25. Several comments maintained that the terms ``high potency,''
``high absorption,'' and ``balanced'' are implied nutrient content
claims and urged the agency to define or prohibit these terms. The
comments stated that it is inappropriate and fraught with possibilities
for deception to allow each manufacturer to define such claims. One
comment stated that although these terms imply features of nutrient
content to consumers, they do not have any established or useful
meaning with regard to dietary supplements. The comment argued that
these terms seem to be more specific to dietary supplements than to
other food, so that their applicability in helping consumers make
appropriate nutritional choices from the variety of foods available
seems limited.
On the other hand, several comments stated that these terms do not
inherently refer to the level of nutrients, are not nutrient content
claims, and therefore should not be defined. These comments maintained
that such terms are formulation descriptions, which properly and
truthfully describe the nature and type of the product. These comments
contended that these terms have been used for many years, and that
consumers have come to understand that products so described provide an
amount of the primary nutrients in the formulation that is at least
equal to the RDA's for those nutrients.
One comment argued that FDA precedent exists for excluding such
terms from regulation as nutrient content claims. The comment stated
that as formulation descriptions, these terms are useful to consumers
in helping them to make product choices, and manufacturers should be
allowed to continue to use these terms in a manner that is consistent
with FDA's policy on claims such as ``maximum strength'' for internal
analgesics in the over-the-counter drug review (i.e., kept outside the
scope of this rulemaking).
The agency agrees that these terms seem to have more direct
application to dietary supplements than to foods in conventional food
form. Furthermore, these terms may have some utility in helping
consumers select among dietary supplements. However, while these terms
have apparently been used for years to imply superiority, the agency is
uncertain what they mean to consumers.
The agency disagrees that these terms should be regulated in the
same manner as terms such as ``maximum strength,'' which are used on
the labels of over-the-counter drug products. The over-the-counter drug
regulations include maximum amount limitations. Section 411(a)(1)(A) of
the act prohibits limits on the potency of dietary supplements of
vitamins or minerals except on the basis of safety. Therefore, the
situations are not analogous.
The agency believes that each of these terms should be evaluated
individually because they do not seem to be synonymous. ``High
potency'' seems to focus on nutrient level or content, but
``balanced,'' as one comment suggested, seems to be a formulation
claim. ``High absorption'' seems to focus on how the body responds to
the nutrient. The agency will address each of these terms in more
detail in the comments that follow.
b. Definition for ``high potency''
26. The majority of comments stated that the term ``high potency''
or ``full potency'' is an implied nutrient content claim and should be
defined. Several definitions were offered for this term. A few comments
stated that multivitamins and minerals are termed ``high potency'' when
the majority of nutrients with established RDA's are present at the
levels equal to or in excess of the RDA.
Similarly, another comment stated that the term should be
restricted to formulations that contain micronutrients at levels of at
least twice the applicable RDI or DRV because a multivitamin at 100
percent of the DV might be ``high potency'' compared to a food in
conventional food form but not ``high potency'' when compared to other
dietary supplements.
Another comment suggested that FDA should require a ``high
potency'' single-ingredient supplement to contain at least twice the
RDI, and that the front of the label should disclose what multiple of
the RDI the supplement contains. The comment acknowledged that under
this scheme, some nutrients, such as calcium and selenium, would not
qualify to carry a ``high potency'' claim, because they are rarely sold
at double the RDI. The comment suggested that if the supplement
industry begins to market those supplements at higher doses in order to
make ``high potency'' claims, then FDA could establish a lower minimum
level, such as 50 percent more than the RDI for selenium or 50 percent
of the RDI for calcium. Those minimum levels would apply to those
nutrients only. The comment also suggested that FDA should allow ``high
potency'' claims on multinutrient supplements when more than one-third
of the nutrients that they contain meet the minimum level required for
a high potency claim, and the label discloses which nutrients are
present at high levels. For example, the label of a ``high potency''
multivitamin could carry an asterisk next to the claim, with the
following disclosure: ``contains high levels of [number] vitamins.''
Further, the comment stated that it is not reasonable to require
that all of the nutrients in a multinutrient supplement be present at
levels that are necessary for high potency claims because many
nutrients are not--and should not--be sold in such high doses. For
example, the comment suggested that ``high potency'' claims should be
allowed on a multivitamin-and-mineral supplement that contains at least
double the RDI of vitamins A, C, E, B6, B12, thiamin, riboflavin, and
niacin but smaller amounts of vitamin D, iron, calcium, magnesium,
zinc, and copper. The comment stated that the latter nutrients are
typically sold at doses lower than double the RDI and may pose a risk
at high levels.
FDA has reviewed the comments and is persuaded that ``high
potency'' is a claim that characterizes the level of a nutrient and
therefore meets the definition in Sec. 101.13(b) of a nutrient content
claim. FDA also is persuaded by the comments that this is a term that
FDA should define in order to ensure that it will be useful to
consumers in maintaining healthy dietary practices. However, given the
range and diversity of the suggested definitions, the agency is not
prepared to offer a definition of ``high potency'' at this time. FDA
intends to review the suggestions it received on this issue and based
on information received in comments, issue a proposed rule on an
appropriate definition of ``high potency.''
FDA recognizes that there is a need to provide this definition as
quickly as possible. Therefore, FDA intends to act on this matter as
expeditiously as its resources allow.
c. Definitions for ``high absorption''
27. A couple of comments stated that the term ``high absorption''
does not refer to the level of nutrients but rather to bioavailability
or how efficiently the nutrients are released from the product and
absorbed into the bloodstream. One comment stated that ``high
absorption'' means that the product meets the definition for ``high,''
and that a ``high amount'' is digested and assimilated.
Another comment stated that from a biological viewpoint, the extent
to which nutrients are absorbed from food or supplements depends not
only on the chemical form of the nutrient itself but on the chemical
environment presented by the carrier food in which it is contained and
on the physiological state of nutrient need of the individual consumer.
Given these factors, the comment stated that it is difficult to provide
a meaningful definition of absorbability.
One comment requested that the label should disclose information
about the bioavailability of the product. Another comment suggested
that FDA should allow labels to make ``high absorption'' or similar
claims only when the manufacturer supplies bioavailability data showing
that the product is better absorbed than a standard supplement. The
comment stated that the agency should not allow this claim on
supplements that simply meet or exceed the United States Pharmacopeial
Convention's (USP's) (or other) standards for disintegration or
dissolution, because meeting those standards does not ensure that the
product is well absorbed.
The agency agrees that the term ``high absorption'' generally
refers to how well a nutrient is absorbed into the system. A product
can be well absorbed irrespective of the quantitative amount found in
the product. Accordingly, FDA finds that ``high absorption'' is not a
nutrient content claim and thus will not define this term. The use of
this term is subject to section 201(n) and 403(a) of the act, however.
The agency expects that any product bearing a ``high absorption'' claim
will contain the nutrients that are the subject of the claim in a form
than can be readily assimilated by the body. In addition, manufacturers
who make a ``high absorption'' claim should have data available to
support the claim and should be prepared to make such data available to
regulatory officials on request. Failure to do so could lead the agency
to conclude that there is no basis for the claim, and thus that it is
false or misleading.
d. Definitions for ``balanced''
28. A few comments stated that ``balanced'' is not a nutrient
content claim. One comment suggested that ``balanced'' refers to the
ratio of nutrients, not the level, and that the term can apply equally
to products containing low or high quantities of nutrients. Another
comment stated that there is little need for FDA to define ``balanced''
because most multinutrient supplements that are currently on the market
do not contain nutrients in proportions that would impair the
absorption or utilization of other nutrients. The comment suggested
that until researchers gain further information on the most favorable
proportions of nutrients in supplements, the agency should leave this
term undefined and therefore prohibited. Another comment suggested that
``balanced'' be defined as any supplement containing from 50 to 150
percent of the RDI for each vitamin and mineral component of the
product for which an RDI has been established.
The agency is persuaded by the comments that the term ``balanced''
does not typically characterize the level of nutrients, but rather that
it is a formulation claim that addresses the ratio of nutrients. The
term ``balanced'' may be used in different ways, each of which relates
to the formulation of a product. For example, the term ``balanced'' may
refer to the assortment of nutrients that are present in a product, or
it may reflect interactions between the nutrients present, such as
sparing effects or impairment or enhancement of absorption.
Accordingly, this term does not meet the definition for a nutrient
content claim in Sec. 101.13(b). Therefore, the use of the term
``balanced'' is subject to sections 403(a) and 201(n) of the act and
not section 403(r) of the act. The agency will determine whether the
use of this term is misleading on a case-by-case basis.
e. Temporary suspension of the use of terms
29. One comment stated that use of the terms ``high potency,''
``high absorption,'' and ``balanced'' should not be suspended
temporarily during the rulemaking process because such a suspension
would result in unnecessary labeling costs. Another comment requested
additional time to comment on the definition of ``high potency'' and
suggested that until FDA defines this term, the agency should permit
dietary supplement manufacturers to continue to use this term as it is
currently being used. The comment suggested that as an executive
agency, FDA has inherent authority to refrain from enforcing a
statutory provision in circumstances in which the enforcement would do
more harm than good. The comment argued that to the extent that ``high
potency'' is being used as part of a brand name (and was being used
before October 25, 1989), the 1990 amendments permit its continued use
in the brand name until FDA has defined the term (section 403(r)(2)(C)
of the act).
The comment argued that there is no reason for FDA to prohibit the
use of a nutrient content claim while a definition is being developed.
Further, the comment noted that an enforcement moratorium would avoid
the relabeling problem that would arise if FDA disapproves and then
reapproves use of the term within a short period of time. The comment
stated that FDA will continue to have authority to prohibit use of the
term when such use is false or misleading.
FDA advises that it intends to define ``high potency'' as a
nutrient content claim in a separate rulemaking as quickly as possible.
The agency is postponing the date that it will apply this final rule on
nutrient content claims on dietary supplements until July 1, 1995. This
postponement is discussed in detail in the document on the date of
application for the nutrition labeling and nutrient content claim
requirements for dietary supplements found elsewhere in this issue of
the Federal Register. FDA intends to complete its rulemaking on ``high
potency'' in sufficient time to assure implementation by the time that
dietary supplement manufacturers will be required to comply with the
nutrient content claim provisions.
The agency also advises that the term ``high potency,'' when used
as part of a brand name, would fall under section 403(r)(2)(C) of the
act, if as the comment stated, it was used as part of the brand name
before October 25, 1989. However, once this term is defined by the
Secretary, it will have to be used in a manner that complies with that
definition. In addition, use of the term in the brand name is subject
to section 403(a) of the act, which prohibits the use of false and
misleading labeling irrespective of whether the use of the term in the
brand name is exempt under section 403(r)(2)(C) of the act.
As discussed previously, the comments did not demonstrate that
there are accepted definitions for any of these terms. However, the
comments have convinced the agency that the terms ``high absorption''
and ``balanced'' do not generally characterize the level of nutrients.
Accordingly, the agency concludes that these terms are not subject to
section 403(r) of the act.
4. Age Specific Claims
30. One comment stated that there are products with brand names
that imply that the product is especially useful for a particular
segment of the population. The comment argued that it would therefore
be appropriate for FDA to require that these special formulas comply
with clearly defined requirements (e.g., that they contain high amounts
of particular vitamins and minerals that are needed by the relevant
group). Another comment maintained that such names mislead consumers
because they provide no explanation for those special population
claims, and that in many cases, the supplements do not contain levels
of nutrients that are appropriate for the special population named in
the claim. The comment suggested that FDA should, at the very least,
require labels to provide an explanation for these claims. For example,
an explanation for a product with a brand name implying that it is
useful for women might state that ``this product is especially suited
for young women because it contains 100 percent of the RDI for folic
acid and iron and 30 percent of the RDI for calcium.''
FDA agrees that products marketed for special population groups may
include claims or brand names that can be misleading. These claims and
brand names seem to imply a particular benefit for certain subgroups of
the population and often do not disclose how or why they meet the needs
of that particular subgroup. Disclosure of such facts would help to
protect a product from being misbranded under section 403(a) of the act
because its labeling would reveal material facts about the product's
claimed special usefulness.
However, such claims about the usefulness of a product for
particular population groups generally fall under section 403(j) of the
act to the extent that they represent the product to be for special
dietary use. As special dietary use claims, they are outside the scope
of this rulemaking. Among other things, Sec. 105.3 defines ``special
dietary uses'' as ``uses for supplying particular dietary needs which
exist by reason of a physical, physiological, pathological or other
condition, including but not limited to the conditions of disease,
convalescence, pregnancy, lactation, allergic hypersensitivity to food,
underweight, and overweight; [and] [u]ses for supplying particular
dietary needs which exist by reason of age, including but not limited
to the ages of infancy and childhood'' (Sec. 105.3(a)(1)(i) and
(a)(l)(ii)). The agency intends to consider proposing regulations for
such products. However, because of resource constraints and other
agency priorities, any such proposal will not be available in the
immediate future. In the interim, such claims will continue to be
subject to the general misbranding provisions of sections 201(n) and
403(a) of the act.
5. ``Natural''
31. Several comments suggested that FDA define the term ``natural''
for dietary supplements because that term is widely used in the
labeling of dietary supplements even though there is no established
definition of that term, and it is misleading as it is now used. For
example, one comment stated that studies indicate that natural vitamin
E (d-alpha tocopherol) is better utilized than synthetic vitamin E (dl-
alpha and other tocopherols), but that ``natural'' claims now appear on
products containing synthetic vitamin E, misleading consumers who think
they are getting a better utilized product. The comment stated that in
other instances, companies use the term ``natural'' to mean that the
product contains no artificial ingredients.
One comment acknowledged that FDA has struggled with how to define
this term for foods in conventional food form. This comment suggested
that the agency need not resolve the dilemma at this time, but that it
should simply establish a supplement-specific definition, just as FDA
has established a special definition for ``natural flavor'' in
Sec. 101.22. Another comment suggested that FDA should allow
``natural'' claims on products containing only the naturally occurring
form of a vitamin. The comment suggested that FDA could request
comments about whether to limit ``natural'' claims to nutrients, such
as vitamin E, that appear to offer some advantage when consumed in a
natural form. The comment also stated that many consumers will want the
option of purchasing other nutrients in the natural form as well.
FDA is not persuaded by the comments that the term ``natural''
should be defined at this time. As one comment acknowledged, the agency
has recently expended its resources exploring the use of this term, and
it was unable to arrive at an acceptable definition (58 FR 2302 at
2407). FDA currently lacks sufficient resources to thoroughly explore
and develop proposed regulations for the use of this term on dietary
supplements.
In the final rule on nutrient content claims, the agency determined
that it would maintain its current policy (as discussed in the general
principles proposal (56 FR 60421 at 60466) of interpreting this term to
mean that nothing artificial or synthetic (including all color
additives regardless of source) has been included in, or has been added
to, a food (Ref. 7). FDA also decided that it would continue to
distinguish between natural and artificial flavors as outlined in
Sec. 101.22. The agency concludes that, for the reasons cited above, it
is appropriate to apply this policy to dietary supplements.
In this regard, FDA also points out that Sec. 101.9(k)(6) states
that a food labeled under the provisions of this section shall be
deemed to be misbranded under sections 201(n) and 403(a) of the act if
its label or labeling represents, suggests, or implies, ``that a
natural vitamin in a food is superior to an added or synthetic vitamin
or to differentiate in any way between vitamins naturally present from
those added.''
V. Other Provisions
FDA did not receive any comments that dealt specifically with the
other provisions of the proposal. In the absence of any basis for doing
otherwise, FDA is adopting those provisions as proposed.
VI. Economic Impact
In its dietary supplement labeling proposals of June 18, 1993, FDA
stated that the proposed rules on the labeling of dietary supplements,
taken as a whole, would have associated costs of approximately $20
million. Thus, the agency concluded that the proposed rules would not
constitute a major rule as defined by Executive Order 12291. In
accordance with the Regulatory Flexibility Act (Pub. L. 96-354), FDA
explored whether the proposed rules may have a significant impact on
small businesses and tentatively concluded that they do not.
FDA has evaluated the many comments that it received in response to
its economic impact analysis. Because the issues raised in the comments
relate to all three proposals, FDA has combined its discussion of these
comments and presented them in the final rule regarding the date of
application published elsewhere in this issue of the Federal Register.
FDA has examined the economic implications of the final rules
amending 21 CFR as required by Executive Order 12866 and the Regulatory
Flexibility Act. 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 effects; distributive impacts; and equity). The
Regulatory Flexibility Act requires the agency to analyze options for
regulatory relief for small businesses. FDA has concluded, based on its
review of the available data and comments, that these final rules are
not significant as defined by Executive Order 12866. Further, in
accordance with the Regulatory Flexibility Act, the agency certifies
that these final rules will not have a significant impact on a
substantial number of small businesses.
VII. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(11) that this
action is of a type 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.
VIII. Paperwork Reduction Act
In the June 18, 1993, proposal on nutrient content claims for
dietary supplements (58 FR 33731 at 33749), FDA announced that the
agency had submitted to the Office of Management and Budget (OMB) for
its review the collection of information requirements contained in
proposed Sec. 101.69, for petitions regarding the use of nutrient
content claims in conjunction with food labeling on dietary
supplements. Also in that document, FDA published its estimated annual
collection of information burden for this provision.
None of the more than 500 comments received in response to the
dietary supplement proposal addressed the content of petitions under
the proposed nutrient content claim petition requirements. Thus, the
agency's estimated annual reporting and recordkeeping burden from the
health claim petition requirements contained in this final rule remains
unchanged from that announced in June.
FDA has submitted copies of the final rule to OMB for its review of
these reporting requirements.
IX. References
The following references have been placed on file in the Dockets
Management Branch (address above) and may be seen by interested persons
between 9 a.m. and 4 p.m., Monday through Friday.
1. Moss, A. J., A. S. Levy, I. Kim, Y. Park, ``Use of Vitamin
and Mineral Supplements in the United States, Current Users, Types
of Products and Nutrients,'' Advance Data from Vital and Health
Statistics of the National Center for Health Statistics, No. 174,
July 18, 1989.
2. Pennington, J. A. T., V. L. Wilkening, J. E. Vanderveen,
``Descriptive Terms for Food Labeling,'' Journal of Nutrition
Education, p. 51, June 1990.
3. Transcript to Docket N-289 for FDA-Initiated Public
Conference: Antioxidant Vitamins and Cancer and Cardiovascular
Disease, November 1993.
4. Subcommittee on the 10th Edition of the Recommended Dietary
Allowances, Food and Nutrition Board, Commission on Life Sciences,
National Research Council, ``Recommended Dietary Allowances, 10th
Ed.,'' Washington, DC, National Academy Press, 1989.
5. Committee on Diet and Health, Food and Nutrition Board,
Commission on Life Sciences, National Research Council, National
Academy of Sciences, ``Diet and Health, Implications for Reducing
Chronic Disease Risk,'' National Academy Press, Washington, DC,
1989.
6. Committee on the Nutrition Components of Food Labeling, Food
and Nutrition Board, Institute of Medicine, National Academy of
Sciences, ``Nutrition Labeling, Issues and Directions for the
1990's,'' Washington, DC, National Academy Press, 1990.
7. Newberry, R., letter to Clinton K. Davies, September 29,
1988.
List of Subjects in 21 CFR Part 101
Food labeling, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
101 is amended as follows:
PART 101--FOOD LABELING
1. The authority citation for 21 CFR part 101 continues to read as
follows:
Authority: Secs. 4, 5, 6, of the Fair Packaging and Labeling Act
(15 U.S.C. 1453, 1454, 1455); secs. 201, 301, 402, 403, 409, 701 of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 331, 342,
343, 348, 371).
2. Section 101.13, effective May 8, 1994, is amended by revising
paragraph (a), by adding paragraph (b)(5), by revising the first
sentence in paragraph (c), introductory text of paragraph (i),
(j)(1)(i)(A) and (j)(l)(i)(B), and (n) to read as follows:
Sec. 101.13 Nutrient content claims--general principles.
(a) This section and the regulations in subpart D of this part
apply to foods that are intended for human consumption and that are
offered for sale, including foods in conventional food form and dietary
supplements of vitamins, minerals, herbs, and other similar nutritional
substances (dietary supplements).
(b) * * *
(5) For dietary supplements, claims for calories, fat, saturated
fat, and cholesterol may not be made on products that meet the criteria
in Sec. 101.60(b)(1) or (b)(2) for ``calorie free'' or ``low calorie''
claims, except, in the case of calorie claims, when an equivalent
amount of a similar dietary supplement (e.g., another protein
supplement) that the labeled food resembles and for which it
substitutes, normally exceeds the definition for ``low calorie'' in
Sec. 101.60(b)(2).
(c) Information that is required or permitted by Sec. 101.9 or
Sec. 101.36, as applicable, to be declared in nutrition labeling, and
that appears as part of the nutrition label, is not a nutrient content
claim and is not subject to the requirements of this section. * * *
* * * * *
(i) Except as provided in Sec. 101.9 or Sec. 101.36, as applicable,
or in paragraph (q)(3) of this section, the label or labeling of a
product may contain a statement about the amount or percentage of a
nutrient if:
* * * * *
(j) * * *
(1) * * *
(i)(A) For ``less'' (or ``fewer'') and ``more'' claims, the
reference food may be a dissimilar food within a product category that
can generally be substituted for one another in the diet (e.g., potato
chips as reference for pretzels, orange juice as a reference for
vitamin C tablets) or a similar food (e.g., potato chips as reference
for potato chips, one brand of multivitamin as reference for another
brand of multivitamin).
(B) For ``light,'' ``reduced,'' ``added,'' ``fortified,'' and
``enriched'' claims, the reference food shall be a similar food (e.g.,
potato chips as a reference for potato chips, one brand of multivitamin
for another brand of multivitamin).
* * * * *
(n) Nutrition labeling in accordance with Sec. 101.9, Sec. 101.10,
or Sec. 101.36, as applicable, shall be provided for any food for which
a nutrient content claim is made.
* * * * *
3. Section 101.54, effective May 8, 1994, is amended by revising
paragraph (a)(3), (b)(1), (c)(1) and the introductory text of paragraph
(e)(1) to read as follows:
Sec. 101.54 Nutrient content claims for ``good source,'' ``high,'' and
``more.''
(a) * * *
(3) The food for which the claim is made is labeled in accordance
with Sec. 101.9, Sec. 101.10, or Sec. 101.36, as applicable.
(b) ``High'' claims. (1) The terms ``high,'' ``rich in,'' or
``excellent source of'' may be used on the label and in the labeling of
foods except meal products as defined in Sec. 101.13(l), main dish
products as defined in Sec. 101.13(m), and dietary supplements of
vitamins or minerals to characterize the level of any substance that is
not a vitamin or mineral, provided that the food contains 20 percent or
more of the RDI or the DRV per reference amount customarily consumed.
* * * * *
(c) ``Good Source'' claims. (1) The terms ``good source,''
``contains,'' or ``provides'' may be used on the label or in labeling
of foods except meal products as described in Sec. 101.13(l) main dish
products as described in Sec. 101.13(m), and dietary supplements of
vitamins or minerals to characterize the level of any substance that is
not a vitamin or mineral, provided that the food contains 10 to 19
percent of the RDI or the DRV per reference amount customarily
consumed.
* * * * *
(e) ``More'' claims. (1) A relative claim using the terms ``more,''
``fortified,'' ``enriched,'' and ``added'' may be used on the label or
in labeling of foods to describe the level of protein, vitamins,
minerals, dietary fiber, or potassium except as limited by
Sec. 101.13(j)(1)(i) and except meal products as defined in
Sec. 101.13(l), main dish products as defined in Sec. 101.13(m), and
dietary supplements of vitamins or minerals to characterize the level
of any substance that is not a vitamin or mineral, provided that:
* * * * *
4. Section 101.60 is amended by revising paragraphs (a)(2) and
(a)(3), by adding new paragraph (a)(4), by redesignating paragraphs
(c)(4) and (c)(5) as paragraphs (c)(5) and (c)(6), and adding a new
paragraph (c)(4), and by revising the introductory text of newly
redesignated paragraph (c)(5) to read as follows:
Sec. 101.60 Nutrient content claims for the calorie content of foods.
(a) * * *
(2) The claim is made in accordance with the general requirements
for nutrient content claims in Sec. 101.13;
(3) The food for which the claim is made is labeled in accordance
with Sec. 101.9, Sec. 101.10, or Sec. 101.36, as applicable; and
(4) For dietary supplements, claims regarding calories may not be
made on products that meet the criteria in Sec. 101.60(b)(1) or (b)(2)
for ``calorie free'' or ``low calorie'' claims except when an
equivalent amount of a similar dietary supplement (e.g., another
protein supplement) that the labeled food resembles and for which it
substitutes, normally exceeds the definition for ``low calorie'' in
Sec. 101.60(b)(2).
* * * * *
(c) * * *
(4) The claims provided for in paragraph (c)(1) and (c)(2) of this
section may be used on labels or in labeling of dietary supplements of
vitamins or minerals that are intended specifically for use by infants
and children less than 2 years of age.
(5) The terms ``reduced sugar,'' ``reduced in sugar,'' ``sugar
reduced,'' ``less sugar,'' ``lower sugar'' or ``lower in sugar'' may be
used on the label or in labeling of foods, except meal products as
defined in Sec. 101.13(l), main dish products as defined in
Sec. 101.13(m), and dietary supplements of vitamins or minerals,
provided that:
* * * * *
6. Section 101.61 is amended by revising paragraph (a)(3) to read
as follows:
Sec. 101.61 Nutrient content claims for the sodium content of foods.
(a) * * *
(3) The food for which the claim is made is labeled in accordance
with Sec. 101.9, Sec. 101.10, or Sec. 101.36, as applicable.
* * * * *
7. Section 101.62 is amended by revising paragraphs (a)(2) and
(a)(3) and by adding paragraph (a)(4) to read as follows:
Sec. 101.62 Nutrient content claims for fat, fatty acid, and
cholesterol content of foods.
(a) * * *
(2) The claim is made in accordance with the general requirements
for nutrient content claims in Sec. 101.13;
(3) The food for which the claim is made is labeled in accordance
with Sec. 101.9, Sec. 101.10, or Sec. 101.36, as applicable; and
(4) For dietary supplements, claims for fat, saturated fat, and
cholesterol may not be made on products that meet the criteria in
Sec. 101.60(b)(1) or (b)(2) for ``calorie free'' or ``low calorie''
claims.
* * * * *
8. Section 101.65 is amended by revising paragraphs (a)(3), (b)(3)
and (b)(4) to read as follows:
Sec. 101.65 Implied nutrient content claims and related label
statements.
(a) * * *
(3) The food for which the claim is made is labeled in accordance
with Sec. 101.9, Sec. 101.10, or Sec. 101.36, as applicable.
(b) * * *
(3) A claim about the presence of an ingredient that is perceived
to add value to the product, e.g., ``made with real butter,'' ``made
with whole fruit,'' or ``contains honey,'' except that claims about the
presence of ingredients other than vitamins or minerals or that are
represented as a source of vitamins and minerals are not allowed on
labels or in labeling of dietary supplements of vitamins and minerals
that are not in conventional food form.
(4) A statement of identity for a food in which an ingredient
constitutes essentially 100 percent of a food (e.g., ``corn oil,''
``oat bran,'' ``vitamin C 60 mg tablet'').
* * * * *
Dated: December 23, 1993
David A. Kessler,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 93-31814 Filed 12-29-93; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 93-31813 Food Labeling; General Requirements for Nutrition Labeling for Dietary Supplements of Vitamins, Minerals, Herbs, or Other Similar Nutritional Substances
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 354-378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-31813]
[[Page Unknown]]
[Federal Register: January 4, 1994]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 101
[Docket No. 90N-135D]
RIN 0905-AD96
Food Labeling; General Requirements for Nutrition Labeling for
Dietary Supplements of Vitamins, Minerals, Herbs, or Other Similar
Nutritional Substances
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is amending its food
labeling regulations to establish requirements for the nutrition
labeling of dietary supplements of vitamins, minerals, herbs, and other
similar nutritional substances (hereinafter referred to as dietary
supplements). This action is in response to certain provisions of the
Nutrition Labeling and Education Act of 1990 (the 1990 amendments) and
the Dietary Supplement Act of 1992 (the DS act).
EFFECTIVE DATE: July 5, 1995.
FOR FURTHER INFORMATION CONTACT: Susan Thompson, Center for Food Safety
and Applied Nutrition (HFS-165), Food and Drug Administration, 200 C
St. SW., Washington, DC 20204, 202-205-5587.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of June 18, 1993 (58 FR 33715), FDA
published a proposed rule entitled ``Food Labeling; General
Requirements for Nutrition Labeling for Dietary Supplements of
Vitamins, Minerals, Herbs, or Other Similar Nutritional Substances''
(hereinafter identified as ``the nutrition labeling proposal for
dietary supplements'') to establish regulations on the nutrition
labeling of dietary supplements of vitamins, minerals, herbs, and other
similar nutritional substances. A document correcting various editorial
errors in that proposed rule was published in the Federal Register of
July 27, 1993 (58 FR 40104).
The proposed rule was issued to implement the 1990 amendments (Pub.
L. 101-535), which were signed into law on November 8, 1990. This new
law amended the Federal Food, Drug, and Cosmetic Act (the act) in a
number of important ways. One of the notable aspects of the 1990
amendments is that it added section 403(q) to the act (21 U.S.C.
343(q)). This section requires that most foods bear nutrition labeling.
In response to section 403(q) of the act, FDA published a proposed
rule on nutrition labeling in the Federal Register of November 27, 1991
(56 FR 60366 at 60393). That document proposed, among other things, a
regulation specifically for the nutrition labeling of dietary
supplements of vitamins or minerals (proposed Sec. 101.36). It also
proposed to make the nutrition labeling of dietary supplements of herbs
or other similar nutritional substances subject to Sec. 101.9 (21 CFR
101.9), the general regulation on nutrition labeling. This distinction
reflects section 403(q)(5)(F) (formerly section 403(q)(5)(E)) of the
act. This section provides that if a food to which section 411 of the
act (21 U.S.C. 350) applies (i.e., a dietary supplement of vitamins or
minerals) contains one or more of the nutrients required to be listed
in nutrition labeling, ``the label or labeling of such food shall
comply with requirements of subparagraph (1) and (2) [of section 403(q)
of the act] in a manner which is appropriate for such food and which is
specified in regulations of the Secretary.'' Other dietary supplements
are not subject to section 403(q)(5)(F) of the act and thus are subject
to regulation under section 403(q) of the act as any other food.
In response to the proposed rule on nutrition labeling of November
27, 1991, FDA received over 45 responses, each containing one or more
comments, that pertained to the nutrition labeling of dietary
supplements. The agency summarized and discussed the issues in these
comments in the preamble of the mandatory nutrition labeling final rule
that it issued on January 6, 1993 (58 FR 2079 at 2167). However, the
regulations that FDA adopted in that final rule applied only to the
nutrition labeling of foods in conventional food form (Sec. 101.9).
They did not apply to dietary supplements because of a moratorium
established by the DS act.
The DS act (Pub. L. 102-571) was signed into law on October 6,
1992. In section 202(a)(1), the DS act established a moratorium until
December 15, 1993, on the implementation of the 1990 amendments, with
respect to dietary supplements. Thus, FDA did not finalize the proposed
rules pertaining to the nutrition labeling of dietary supplements of
vitamins and minerals (Sec. 101.36) or of herbs or other nutritional
substances.
Section 202(a)(2) of the DS act required that the Secretary of
Health and Human Services, and by delegation FDA, issue new proposed
regulations that are applicable to dietary supplements no later than
June 15, 1993, and final regulations by December 31, 1993. In response
to this provision, FDA issued the June 18, 1993 (58 FR 33715) proposal
and is now issuing this final rule. In addition, elsewhere in this
issue of the Federal Register, FDA is issuing final regulations that
address the use of nutrient content claims and health claims on dietary
supplements.
In addition, section 203 of the DS act instructed FDA not to
promulgate regulations before November 8, 1993, that establish
recommended daily allowances for vitamins or minerals other than those
recommended allowances specified in Sec. 101.9(c)(7)(iv) as in effect
on October 6, 1992. Therefore, in the January 6, 1993, mandatory
nutrition labeling final rule, FDA retained the U.S. Recommended Daily
Allowances (U.S. RDA) values specified in Sec. 101.9(c)(7)(iv), as in
effect on October 6, 1992. These U.S. RDA values were in large measure
based on the RDA's in the National Academy of Sciences' (NAS)
publication ``Recommended Dietary Allowances,'' 7th edition, 1968 (Ref.
1). The agency did, however, change the terminology for these values
from ``U.S. RDA's'' to ``Reference Daily Intakes (RDI's).''
FDA received over 400 responses to its June 18, 1993, proposed rule
on the nutrition labeling of dietary supplements, each of these
responses contained one or more comments. Responses were received from
consumers, consumer advocacy organizations, health care professionals,
professional societies, universities, industry, trade associations, and
State and local governments. Many comments addressed issues covered by
other proposals that are a part of this overall food labeling
initiative, and they will be addressed in those documents. Other
comments were outside the scope of these proposals and will not be
discussed here.
About half of the comments supported the proposal; about half of
these comments supported it without modification. These comments were
primarily from health professionals, although a few were from that
segment of the food industry that produces foods in conventional food
form. The remainder of the comments that supported the proposal
suggested modifications in various provisions of the proposal. About
half of the comments opposed the proposal. These comments were
primarily from consumers who opposed FDA's regulation of dietary
supplements. A summary of the comments that suggested changes and the
agency's responses follow:
II. Scope of New Sec. 101.36
1. One comment from a manufacturer of dietary supplements supported
the proposed rule to allow only vitamins and minerals that have RDI's
or Daily Reference Values (DRV's) to be listed in the nutrition label
of dietary supplements of vitamins and minerals. However, several
comments wanted non-RDI vitamins and minerals to be listed,
particularly those in the NAS's ``Recommended Dietary Allowances''
(i.e., chloride, chromium, fluoride, manganese, molybdenum, selenium,
and vitamin K). The comments pointed out that advances in scientific
knowledge have shown that these nutrients are considered essential to
human health. Some comments also suggested listing nutrients such as
arsenic, boron, silicon, tin, and vanadium that they stated are of
major significance in human nutrition.
Some of these comments suggested that an asterisk in the ``Percent
Daily Value'' column could refer to a footnote, such as ``No Daily
Value has been established for this nutrient.'' Another comment
suggested that these additional nutrients could be listed in a
subsection of the nutrition panel below the bar after the last nutrient
for which there is an RDI or DRV. One comment stated that to put
information on nutrients of this type outside of the ``Nutrition
Facts'' box would be inconvenient and may cause some consumers to
overlook the presence of these additional nutrients, some of which
should not be consumed in excess.
The agency is persuaded that it is appropriate to allow the
nutrients that are listed as being essential to humans in the NAS's
``Recommended Dietary Allowances'' (Refs. 2 and 10), but for which FDA
has not established RDI's, to be declared in the nutrition label of
dietary supplements of vitamins and minerals when they are present in
supplements at more than insignificant amounts. The agency agrees that
there have been significant advances in scientific knowledge with
respect to essential nutrient requirements since 1968. In 1989, the NAS
updated its RDA's to include values for vitamin K and selenium and to
make significant revisions in the allowances for several nutrients
including vitamin B6, folate (folic acid), vitamin B12, magnesium, iron
and zinc (Ref. 2). In addition, scientific advances permitted the NAS
to revise the values, known as ``Estimated Safe and Adequate Daily
Dietary Intakes'' (ESADDI's) in 1980 for chloride (Ref. 10) and in
1989, for three nutrients (biotin, pantothenic acid, and copper), for
which FDA established U.S. RDA's in 1973, and to establish new ESADDI's
for manganese, fluoride, chromium, and molybdenum (Ref. 2).
It was in response to these scientific advances that FDA proposed
RDI's in the Federal Register of November 27, 1991 (56 FR 60366 at
60390 and 60393) for the nutrients mentioned previously that are
included in the 1980 and the 1989 NAS RDA's but for which RDI's have
not been established (i.e., chloride, chromium, fluoride, manganese,
molybdenum, selenium, and vitamin K). The establishment of RDI's would
have allowed these nutrients to be listed on the nutrition label of
dietary supplements of vitamins and minerals as well of foods in
conventional food form. However, as stated above, section 203 of the DS
act instructed FDA not to promulgate regulations that require the use
of, or that are based upon, recommended daily allowances of vitamins or
minerals before November 8, 1993, other than those specified in
Sec. 101.9(c)(7)(iv), as in effect on October 6, 1992. In accordance
with this provision of the DS act, the agency issued a final rule on
January 6, 1993 (58 FR 2206) that retained the former U.S. RDA values.
As a result, the final rule did not include RDI's for chloride,
chromium, fluoride, manganese, molybdenum, selenium, and vitamin K.
Because the prohibition in section 203 of the DS act has now
expired, the agency is proposing, elsewhere in this issue of the
Federal Register, to establish RDI values for those nutrients listed by
the NAS as being essential to humans and that do not already have RDI
values. The agency is proposing this action because these nutrients are
essential for the maintenance of good health in humans.
In recognition of the essentiality of these nutrients and in
response to the comments summarized above, the agency is requiring in
new Sec. 101.36(b)(3) that chloride, chromium, fluoride, manganese,
molybdenum, selenium and vitamin K be included in the nutrition label
when present in the dietary supplement. The agency also is providing in
Sec. 101.36(b)(4)(vi) that if any of these nutrients are declared, they
are to be followed by an asterisk in the ``Percent Daily Value''
column. The asterisk is to refer to another asterisk that is placed at
the bottom of the table and that is followed by the statement ``Daily
Value not established.'' This action is a logical outgrowth of the
nutrition labeling proposal for dietary supplements because that
proposal put into issue the question of whether the list of nutrients
that FDA proposed be included in the nutrition label under Sec. 101.36
was the appropriate list. The comments have persuaded FDA that the list
needs to be expanded in the manner described in this final rule.
FDA is not persuaded, however, that other trace elements for which
the NAS has not established RDA's or ESADDI's should be declared within
the nutrition label. The comments that suggested that such elements be
included on the label provided some published reports that certain of
these elements have been found to be essential in the diets of various
animals but did not provide sufficient evidence for the agency to
conclude that there is scientific consensus about their essentiality
for the maintenance of good health in humans. The agency strongly
believes that evidence of the usefulness of a nutrient for humans is
necessary before that nutrient can be allowed to be listed within the
nutrition label. This policy is consistent with current
Sec. 101.9(i)(5) (redesignated and revised in the January 6, 1993,
final rules, as Sec. 101.9(k)(5)) which prohibits a food's label from
stating or implying that the food has special dietary properties
because of the presence of a substance when, in fact, the usefulness of
the substance has not been established in human nutrition.
In addition, in its proposed rule on mandatory nutrition labeling
(55 FR 29487 at 29493, July 19, 1990), FDA stated that it was concerned
about the possibility of a large number of nutrients being listed in
nutrition labeling and about the way in which their presence on the
label may be interpreted by consumers. FDA expressed concern that the
presence of a large number of nutrients could be misinterpreted as
implying that a food has a greater public health significance than may
be the case. The potential for this happening and misleading the
consumer about the contribution of the food to human nutrition is
especially likely if the nutrition label were to include nutrients not
known to be important to humans. Therefore, FDA believes that foods
that list such nutrients in the nutrition label would be misbranded
under section 403(a) of the act which prohibits misleading information
on the labels and labeling of foods. However, statements about amounts
and percentages can be made outside of the nutrition label as discussed
in the final rule on nutrient content claims published elsewhere in
this issue of the Federal Register.
The agency is specifying that the new nutrients to be listed appear
in an order that reflects the order that FDA proposed in the nutrition
labeling proposal of November 27, 1991 (56 FR 60390). Vitamin K is to
be listed after vitamin E with the fat soluble vitamins, selenium is to
be listed before copper, and the remaining nutrients (manganese,
fluoride, chromium, molybdenum, and chloride) are to be listed after
copper at the bottom of the list.
The agency points out that it is not allowing the listing of these
nutrients on the nutrition labels of foods in conventional food form.
Under Sec. 101.9(c)(8), quantitative amounts by weight of vitamins and
minerals are not listed within the nutrition label of foods in
conventional food form. As a result, the listing of only an asterisk in
conjunction with the statement ``Daily Value not established'' would
provide consumers with no indication of the amount of chloride,
chromium, fluoride, manganese, molybdenum, selenium and vitamin K
present in the food. Therefore, FDA has not provided in Sec. 101.9 for
a provision comparable to that in Sec. 101.36(b)(3) and (b)(4) that
allows for the placement of these nutrients on the nutrition label.
FDA wishes to point out that Sec. 101.36(a) only requires the label
of a dietary supplement of a vitamin or mineral to bear nutrition
labeling in accordance with the provisions of Sec. 101.36 if the
vitamins or minerals in the supplement have an RDI or DRV. Accordingly,
dietary supplements containing only chloride, chromium, fluoride,
manganese, molybdenum, selenium, or vitamin K need not adhere to
Sec. 101.36 until such time as RDI's are established for them.
2. A couple of comments said that nutrients such as fat and sodium
should not be required to be declared in the nutrition labeling of
dietary supplements of vitamins and minerals. One of these comments
said that dietary supplements are not taken because of their fat or
sodium levels, and that these substances should not be declared. Other
comments specifically supported the proposed rule in requiring that
nutrients of this type be declared when they are present.
The agency is not persuaded that nutrients such as fat and sodium
should not be declared in the nutrition labeling of dietary supplements
of vitamins and minerals when present in significant amounts. The
majority of the comments supported FDA's view that this information is
needed to fully inform consumers of the nutrient content of these
products. Although dietary supplements of vitamins and minerals are not
consumed because of their fat or sodium levels, this type of
information on products that contain significant levels of such
nutrients will assist consumers in maintaining healthy dietary
practices. Therefore, the agency is not making the requested change in
the regulation.
3. A few comments stated that dietary supplements of herbs and of
other nutritional substances should be labeled under Sec. 101.36. One
of these comments said it would be less confusing if all supplements
were labeled in the same manner. Other comments agreed that dietary
supplements of herbs should be labeled in accordance with Sec. 101.9
for foods in conventional food form. However, at least one comment
requested that dietary supplements of herbs be exempt from declaring
the ``core'' nutrients if they have to be labeled in accordance with
Sec. 101.9, and another comment said that these dietary supplements
should not have to list ``Percent Daily Values.'' At least one comment
stated that dietary supplements of herbs should have their own format
for nutrition labeling, and a few other comments requested that dietary
supplements of herbs be exempt from all nutrition labeling. One of
these comments agreed that FDA did not have the authority to exempt
dietary supplements of herbs from Sec. 101.9 and wanted an amendment to
the 1990 amendments that would exempt these dietary supplements from
nutrition labeling. This comment said that dietary supplements of herbs
are not normally consumed for their nutritive value, and that nutrition
labeling on these products is irrelevant and unimportant to consumers.
As explained in the nutrition labeling proposal for dietary
supplements (58 FR 33715 at 33716, June 18, 1993), the difference in
the labeling of dietary supplements of vitamins or minerals and of
dietary supplements of herbs and of other similar nutritional
substances is a result of section 403(q)(5)(F) of the act. As stated
above, this section provides that if a food to which section 411 of the
act applies (i.e., a dietary supplement of vitamins or minerals)
contains one or more of the nutrients required to be listed in
nutrition labeling, the label or labeling of such food is to comply
with the requirements of section 403(q)(1) and (q)(2) of the act in a
manner that FDA determines, by regulation, is appropriate for such
food. Other dietary supplements are not subject to section 403(q)(5)(F)
of the act and thus are subject to regulation under section 403(q) of
the act in the same manner as any other food. There is nothing in the
1990 amendments, or elsewhere in the act, that would allow the agency
to exempt the broad category of dietary supplements of herbs and of
other similar nutritional substances from section 403(q)(1) and (q)(2)
of the act. Thus, supplements that are not dietary supplements of
vitamins and minerals are appropriately subject to nutrition labeling
under Sec. 101.9.
Under Sec. 101.9, the nutrition label of dietary supplements of
herbs and of other similar nutritional substances may be presented in
either a full or simplified format as specified in Sec. 101.9(d) or
(f). The simplified format in Sec. 101.9(f) may be used when a
supplement of herbs or of other similar nutritional substances contains
insignificant amounts of seven or more of the following nutrients:
Calories, total fat, saturated fat, cholesterol, sodium, total
carbohydrate, dietary fiber, sugars, protein, vitamin A, vitamin C,
calcium, and iron.
FDA is not persuaded that nutrition labels on dietary supplements
of herbs using the simplified format should be exempt from the
requirement to declare the ``core'' nutrients (i.e., calories, total
fat, sodium, total carbohydrate, and protein). The agency has stated
its belief in the mandatory nutrition labeling final rule (58 FR 2079
at 2142) that this core information is essential to aid consumers in
learning about the relative nutritional qualities of all foods, and the
information allows consumers to judge the consequences of the food
selections they make. No new information was presented in the comments
to change FDA's position on this issue.
The agency also advises that Sec. 101.9(j)(4) provides that foods
subject to Sec. 101.9, including dietary supplements of herbs and of
other similar nutritional substances, are exempt from nutrition
labeling requirements when all of the nutrients required to be declared
under Sec. 101.9(c) are absent or are present in insignificant amounts.
FDA is also not persuaded that nutrition labels on supplements of
herbs should be excused from listing ``Percent Daily Values.'' As
called for in section 2(b)(1)(A) of the 1990 amendments, a primary
purpose of the nutrition label is to help consumers make informed food
choices by enabling them to both comprehend the nutritional value of
the food and to understand its relative significance in the context of
the total daily diet. The consumer research that the agency reviewed in
the mandatory nutrition labeling final rule supports FDA's assertion
that the listing of percent Daily Value improves consumers' abilities
to make correct dietary judgments about a food in the context of a
total daily diet (58 FR 2079 at 2125). In part, this improved ability
to make judgments is achieved by the use of a consistent system of
percentages, so that virtually all the nutrients on the label can be
declared in equivalent units. Also, the percentages communicate
information about the nutrient level in a food without the consumer
having to be concerned about the absolute level or units of the
underlying scale being used.
Therefore, for the reasons stated, the agency has not acceded to
the requests that dietary supplements of herbs and of other similar
nutritional substances be labeled under Sec. 101.36, have their own
format for nutrition labeling, be exempt from all nutrition labeling,
or be exempt from declaring the ``core'' nutrients and the ``Percent
Daily Values'' in Sec. 101.9.
4. One comment requested that the language of Secs. 101.36(a) and
101.9(j)(6) be revised to refer to ``dietary supplements that are
represented as a source of vitamins and minerals,'' instead of
``dietary supplements of vitamins and minerals.'' This comment was
concerned that alfalfa tablets that have calcium as a binder would be
required to be labeled under Sec. 101.36.
The agency would like to make clear that it does not consider a
product that contains a substance that is a vitamin or a mineral, but
that is used in the food solely for technological purposes, to be a
dietary supplement of a vitamin or mineral because of the presence of
that substance. In these circumstances, the product would not be
represented as supplying a vitamin or mineral (see section 411(c) of
the act). Thus, alfalfa tablets that have calcium as a binder would be
required to be labeled under Sec. 101.9.
5. A few comments requested clarification of the type of nutrition
labeling that would be required for ``combination'' products that
contain herbs with added vitamins.
The agency advises that the type of nutrition labeling that would
be required for products that contain herbs and added vitamins would
depend upon the contents of the product as well as how the product is
represented. If a ``combination'' product is primarily a dietary
supplement of vitamins and minerals and is marketed as such, the
product would have to be labeled in accordance with Sec. 101.36. If the
product is not primarily a dietary supplement of vitamins or minerals
and is not represented as such, it would have to be labeled in
accordance with Sec. 101.9. The agency believes that the manufacturer
makes the determination as to whether a product is primarily a dietary
supplement of an herb, of vitamins or minerals, or of a ``similar
nutritional substance'' based on how it labels and formulates the
product.
The types of claims that are made on a dietary supplement will both
determine, and be limited by, whether it is a dietary supplement of
vitamins or minerals or of herbs or of other nutritional substances.
Section 411(b)(2)(B) of the act states that the labeling and
advertising for dietary supplements of vitamins and minerals may not
give prominence to or emphasize ingredients that are not vitamins,
minerals, or represented as a source of vitamins or minerals. Thus, if,
for example, a dietary supplement of an herbal extract adds vitamins
and minerals yet remains primarily a dietary supplement of the herbal
extract and is advertised as such, section 411(b)(2)(B) of the act
would not apply to the product. This would be the case when the label
of such a product made no reference to any added vitamins or minerals
other than in the ingredient list and nutrition label. Section
411(b)(2)(B) is discussed in more detail in the companion document on
nutrient content claims for dietary supplements, which is published
elsewhere in this issue of the Federal Register.
6. One comment requested that the language of Sec. 101.36(a) be
revised to delete ``and labeling.'' The comment says that nutrition
labeling is not required on labeling under Sec. 101.9.
The agency agrees with this comment and is revising the first
sentence of Sec. 101.36(a) to delete the words ``and labeling,''
thereby requiring that the required nutrition information appear on the
label of dietary supplements of vitamins and minerals. FDA notes that
Sec. 101.9(a)(2) allows the required nutrition information to be placed
on labeling of foods in conventional food form when such foods are not
in packaged form. The types of labeling that are identified in
Sec. 101.9(a)(2) and that allow the required information to be clearly
displayed at the point of purchase are counter cards, signs, tags
affixed to the product, booklets, looseleaf binders, and other
appropriate devices. The only manner in which the agency envisions that
dietary supplements of vitamins and minerals would not be sold in
packaged form is when they would be sold directly from bulk containers.
If and when dietary supplements of vitamins and minerals are sold in
this manner, Sec. 101.36(g) specifically provides that they are subject
to the special labeling provisions in Sec. 101.9(j)(16) for foods sold
from bulk containers. Section 101.9(j)(16) allows for the required
nutrition information to be displayed to consumers either on the
labeling of the bulk container plainly in view or in accordance with
Sec. 101.9(a)(2).
III. Nutrition Labeling of Dietary Supplements
A. Serving Size Information
7. At least one comment stated that information on serving size is
not needed because it is given in the directions for use. Other
comments supported the proposed rule stating that serving size
information should be declared in the nutrition label.
The agency believes that information on serving size is as
essential on the nutrition label of dietary supplements of vitamins and
minerals as it is on that of foods in conventional food form. First,
this information may not be given in the directions. For instance, the
directions may state ``take 3 tablets a day'' without indicating if
they are to be taken at one setting as one serving or spread out
throughout the day in three separate servings. Thus, it is fair to
conclude that in many instances the serving size will not be
duplicative.
Additionally, this information quickly informs the consumer about
the amount of the product that contains the levels of nutrients
declared. It also provides a degree of consistency between the
nutrition labels of dietary supplements of vitamins and minerals and
those of foods in conventional food form. FDA concluded in the
mandatory nutrition labeling final rule that if the nutrition label was
to be readily observable and comprehensible, it must be presented in as
consistent a manner as possible from label to label (58 FR 2079 at 2136
and 2139). This consistent look to the required nutrition information
on packages of both dietary supplements of vitamins and minerals and
foods in conventional food form will help consumers to find and
recognize the information. Consistent treatment is important for the
effective use of the nutrition label by consumers. As a result, the
agency is not changing Sec. 101.36 to delete the requirement for
serving size information.
8. One comment stated that the reference amounts for dietary
supplements should be specified in absolute terms but did not provide
any data. The comment argued that absolute amounts are needed so that
if comparative claims are made, one product recommending consumption
of, for example, one tablespoon per day is not compared to a product
recommending five tablespoons per day. A few other comments supported
the proposed definition for reference amounts.
The agency has defined the reference amount customarily consumed
for a dietary supplement in Sec. 101.12(b) as ``the maximum amount
recommended on the label for consumption per eating occasion or, in the
absence of recommendations, one tablet, capsule, packet, or
teaspoonful, as appropriate.'' As discussed in the nutrition labeling
proposal on dietary supplements (54 FR 33715 at 33716), the agency
relied upon labeling recommendations in this definition because it
believed that consumption is determined in large part by the amount
recommended on the label of these products, and it lacked the data to
specify absolute amounts. The agency requested comments on this
approach in the proposal. No comments provided data for the agency to
use in determining absolute amounts that could be used as reference
amounts. Therefore, the reference amount for dietary supplements will
continue to be based on labeling recommendations.
The agency does not agree with the comment that absolute amounts
are needed to prevent a product with a 1 tablespoon serving from being
compared to a product with a 5 tablespoon serving. Lacking data to the
contrary, the agency must assume that the recommended amount on the
label is the amount customarily consumed. Based on that assumption, it
is consistent with Sec. 101.13, General Principles for Nutrient Content
Claims, which provides for comparative claims to be based on reference
amounts customarily consumed. This topic as it relates to comparative
claims is further discussed in the companion document on nutrient
content claims for dietary supplements, published elsewhere in this
issue of the Federal Register.
9. A few comments stated that the term ``Serving Size'' is
confusing on dietary supplements. A few comments had questions about
the determination of serving size, and one of these comments requested
that the term ``Recommended Intake'' be used instead of the term
``Serving Size.'' Another comment suggested that the term ``Minimum
Recommended Serving Size'' be used when the label directions specify a
range of possible intakes for a product (e.g., two to three tablets per
day). This comment was concerned that ``someone reading only the
nutritional information portion of the label will think that the
serving amount listed there is the recommended amount when it is really
the maximum recommended amount.'' Other comments disagreed with this
position and supported the proposed rule which stated that the serving
size should refer to the maximum amount when a range is specified for a
product.
One comment asked what the serving size is when the label
recommends one to four tablets per day. This comment also asked about
serving size when the label recommends two tablets a day. Another
comment supported the statement in the proposal that if there is no
amount recommended on the label, the serving size is one unit of the
supplement. This comment observed that the issue arises as to how a
determination can be made of ``servings per container'' if there is no
recommendation as to serving size. The comment stated that this issue
needs to be considered to avoid a regulatory gap.
The agency is not persuaded that a term other than ``serving size''
should be used to describe the basis for nutrient declaration for
dietary supplements. It would be confusing for consumers if dietary
supplements of vitamins and minerals used a term such as ``Recommended
Intake'' and other foods used the term ``Serving Size.'' As discussed
in the nutrition labeling proposal on dietary supplements (58 FR 33715
at 33716), the agency proposed that the nutrition labeling of vitamin
or mineral supplements be presented in a manner that is as similar as
possible to the nutrition labeling of other foods. The agency believes
that use of the same term on all labels will help to avoid confusion.
As use of the new nutrition label becomes more widespread, and
consumers become familiar with it, they will come to understand that
the serving size represents the amount of product that they are likely
to consume in one eating occasion. Thus, they will come to understand
that for a dietary supplement, the serving size represents the amount
of that product that they are likely to consume at those times that
they decide to take the supplement.
As explained in the proposal of June 18, 1993 (58 FR 33715 at
33716), the agency believes that it is more useful for consumers to
have the serving size be based on the maximum amount recommended, and
to have the nutrition information be reported on this basis, than to
have serving size be based on the minimum or the average amount.
However, in some cases, the serving size is the same regardless of
whether the maximum or minimum amount is used. For example, if label
directions recommend a range of one to three tablets per day, the
serving size is one tablet based on the fact that there are three
separate eating occasions per day. If label directions recommend a
range of one to four tablets per day, the serving size is also one
tablet given the rounding rules (i.e., four divided by three, rounded
off to one). As for the question what is the serving size if the label
recommends two tablets per day, the serving size would also be one
tablet because of rounding. In the absence of recommendations on the
label, a serving size of one unit is appropriate for determining the
``Serving Size'' and the ``Servings Per Container.''
When the serving is one unit, the number of servings per container
would duplicate the number of units declared on the principal display
panel. To avoid redundancy the agency is providing in
Sec. 101.36(b)(2), as proposed, that information on servings per
container need not be provided when the identical information is stated
in the net quantity of contents declaration. However, dietary
supplements in liquid or powdered form will have to declare ``Servings
Per Container'' because the net quantity of contents information will
be reported in net volume or net weight measures, such as fluid ounces
or grams (g), while the serving size will be expressed in common
household measures, such as teaspoonfuls.
In conclusion, the agency has reexamined the proposed rule with
respect to these comments on serving size and believes that no changes
are needed.
B. ``Amount Per Serving''
10. A few comments stated that nutrition information should not be
reported on the basis of ``per serving.'' These comments requested that
the heading ``Amount Per Serving'' be replaced by the term ``Amount Per
Day'' or by the terms ``Amount Per Tablet'' or ``Each Tablet
Contains.''
The agency does not agree with the comment that nutrition
information should be reported as ``amount per day.'' As explained in
the nutrition labeling proposal for dietary supplements (58 FR 33715 at
33717), the agency proposed in the November 27, 1991, document (56 FR
60366 at 60383) that nutrition information be presented under the
heading of ``Per Unit,'' but that when label directions specified that
more than one unit be consumed during a day, it also be presented under
the heading of ``Per Day'' (i.e., dual declaration). The agency
proposed dual declaration when more than one unit was to be consumed
per day to more fully inform consumers.
The agency received a number of comments opposing the dual
declaration of nutrition information on supplements. Some of these
comments supported declaration on the basis of ``per day'' because they
believed that it is the total daily amount of nutrients that is
important. Other comments favored a ``per unit'' basis because some
consumers may deviate from the recommended intake, or the intake may be
presented as a range. In the preamble of the mandatory nutrition
labeling final rule of January 6, 1993 (58 FR 2079 at 2168), the agency
stated that dual declaration may create a readability problem for
consumers, and that in general a ``per unit'' approach was more useful
than a ``per day'' approach.
In the nutrition labeling proposal for dietary supplements (58 FR
33715 at 33717), however, the agency took a different approach. It
stated that it had tentatively concluded that declaration on the basis
of ``per serving'' is preferable because reporting information solely
on a ``per unit'' basis could confuse consumers when more that one unit
is to be consumed at one time (e.g., two capsules with each meal). The
agency expressed concern that if consumers do not notice or do not
understand the heading that states ``per unit,'' they might assume that
the information is for the amount specified for consumption at one time
(i.e., ``per serving''), particularly because information for foods in
conventional food form is expressed on a ``per serving'' basis.
Furthermore, the agency tentatively concluded that consistency with the
labeling of foods in conventional food form in this regard is the best
approach because it will reduce consumer confusion (58 FR 33715 at
33717).
Inasmuch as most of the comments supported the proposed rule on
this issue, and comments opposing did not provide any information
demonstrating that there is enhanced consumer understanding or ease of
use when information is expressed on a daily basis, the agency is not
changing Sec. 101.36(b)(3) in response to these comments. FDA has
reconsidered its position in response to comments requesting use of the
terms ``Amount Per Tablet'' and ``Each Tablet Contains,'' however, in
light of the comments. The agency concludes that where the serving size
is one tablet, there is little, if any, chance for misunderstanding if
either of these terms is used in place of the term ``Amount Per
Serving.'' Therefore, the agency is revising Sec. 101.36(b)(3) to state
that when the serving size of the product is one unit, a heading
consistent with the declaration of serving size, such as ``Amount per
Tablet'' or ``Each Tablet Contains,'' may be used in lieu of ``Amount
Per Serving.'' Other appropriate terms, such as ``capsule,''
``packet,'' or ``teaspoonful,'' may be used in place of the term
``Serving.'' While a consistent change in Sec. 101.9(d)(4) appears
reasonable, FDA believes that it is necessary to address such a change
through notice-and-comment rulemaking. The agency intends to propose
such a change in the near future.
C. Nutrient Information
1. Listing of Nutrient Names and Amounts
11. Several comments recommended that information on the
quantitative amount by weight for the nutrients listed should be
presented in a separate column, rather than immediately following
nutrient names. These comments stated that some consumers buy on the
basis of amounts, using them to make product comparisons, and that
separate columns would help consumers to more readily locate this
information. An additional comment requested that information on
amounts be presented either in a separate column or after the ``Percent
Daily Value'' in parenthesis. On the other hand, several comments
supported the proposed rule, arguing that the format for dietary
supplements of vitamins or minerals should follow the format for foods
in conventional food form.
The agency disagrees with the recommendation that information on
the quantitative amount by weight for the nutrients listed should be
presented in a separate column. The agency observes that space on the
label is conserved by not requiring a separate column. Furthermore, FDA
believes that the comprehensibility of this information will be
enhanced when it is presented immediately next to the name of the
nutrient. As discussed in the mandatory nutrition labeling final rule
(58 FR 2079 at 2117), multiple column nutrient information displays are
much more difficult than single column displays for consumers to use
for product comparisons. Both FDA's first experimental format study and
the major industry format study found that declaring nutrient amounts
per serving in adjacent columns of grams per milligram (g/mg) amounts
and percent Daily Value led consumers to make more mistakes and to take
longer on the product comparison type of task (Refs. 3 and 4). FDA's
second experimental study, however, showed that when g/mg nutrient
amount information was placed immediately next to the nutrient name in
an unordered array, and percents were placed in a column array, the
adverse effects on product comparison performance disappeared (Ref. 5).
Thus, the agency is requiring in Sec. 101.36(b)(3) that the name of
each nutrient listed shall be immediately followed by the quantitative
amount by weight of the nutrient, to be consistent with
Sec. 101.9(d)(7)(i).
12. A few comments requested that only the calcium portion of
calcium gluconate be listed in the nutrition panel and on the principal
display panel. Similarly, another comment requested that the agency
clarify that vitamin B6 refers to pyridoxine, not pyridoxine
hydrochloride.
The agency wishes to emphasize that the declaration of the
quantitative amount by weight in the nutrition label is to indicate the
weight of a particular nutrient and not the weight of the salt of that
nutrient used to make the supplement. For example, only the calcium
portion of calcium gluconate is to be declared in the nutrition label,
although in some circumstances the weight of the whole substance may
appear on the principal display panel if it clearly refers to the whole
substance, such as when the statement of identity states ``calcium
gluconate, 600 mg.'' Similarly, only the pyridoxine portion of
pyridoxine hydrochloride is to be declared in the nutrition label. The
agency believes that no changes in Sec. 101.36 are necessary based on
these comments.
13. One comment recommended that biotin and folate be declared in
terms of micrograms (g), not mg, and that calcium and
phosphorus be declared in terms of mg, not g. The comment stated that
consumers are more familiar with these nutrients being expressed in
this manner.
FDA proposed on July 19, 1990 (56 FR 29476) to change to the units
suggested in this comment. However, section 203 of the DS act
prohibited FDA from adopting any reference values for vitamins and
minerals different from the U.S. RDA's contained in
Sec. 101.9(c)(7)(iv), as in effect on October 6, 1992, until after
November 8, 1993. Accordingly, FDA adopted those U.S. RDA values as the
RDI's, with biotin and folate expressed in terms of mg and calcium and
phosphorus expressed in terms of g.
Since the prohibition in section 203 of the DS Act has now expired,
the agency is proposing elsewhere in this issue of the Federal Register
to amend Sec. 101.9 to change the units of declaration for biotin and
folate to g and for calcium and phosphorus to mg. This
proposal responds fully to the comment.
14. One comment was opposed to the agency's proposal, in
Sec. 101.36(b)(3), to allow amounts of protein below 1 g to be left off
the nutrition label. This comment requested that such amounts of
protein be declared because individuals who are highly sensitive to
monosodium glutamate (MSG) may have adverse reactions.
FDA has recognized that certain individuals are sensitive to MSG
and believes that the appropriate means to convey the presence of this
ingredient to consumers is by use of the ingredient statement because
MSG is a food ingredient. The agency reiterates that dietary
supplements of vitamins and minerals are required to comply with
Sec. 101.4 (21 CFR 101.4), which requires full ingredient labeling of
food. Furthermore, in the Federal Register of January 6, 1993, the
agency proposed changes in the regulations pertaining to ingredient
labeling to accommodate those individuals who are sensitive to MSG.
Proposed Sec. 101.22 (58 FR 2950) would require that when the amount of
free glutamate in hydrolyzed protein reaches a specified level, the
declaration in the ingredient statement must include the parenthetical
``(contains glutamate).''
The agency has reexamined proposed Sec. 101.36 in response to this
comment and notes that there is an inconsistency in the labeling of
protein, total carbohydrate, and dietary fiber between Sec. 101.9 and
proposed Sec. 101.36. For example, 0.5 g to 0.99 g of these substances
in a dietary supplement of a vitamin or mineral would not be declared
under proposed Sec. 101.36(b)(3), yet these amounts in a food in
conventional food form would be declared either as ``1 g'' or ``less
than 1 g'' under Sec. 101.9(c). To correct this inconsistency, the
agency is modifying Sec. 101.36(b)(3) to provide that amounts of
nutrients that can be declared as zero in the nutrition label of foods
in conventional food form shall not be declared in the nutrition
labeling of dietary supplements of vitamins and minerals. Thus, the
agency is requiring the declaration of protein, as well as total
carbohydrate and dietary fiber, when they are present in amounts of 0.5
g to 1 g. Amounts under 0.5 g would continue to not be listed in the
nutrition label of dietary supplements of vitamins and minerals,
because these amounts would allow a declaration of zero in the
nutrition labeling of foods in conventional form.
15. One comment recommended that ``active'' ingredients present at
less than 2 percent of the Daily Value be allowed to be listed in the
nutrition label.
The agency is not allowing vitamins and minerals (except sodium and
potassium, which are not included in Sec. 101.9(c)(8)(iv)) present at
less than 2 percent of the Daily Value to be listed because the
declaration of such amounts would be misleading. Such values are
insignificant under Sec. 101.9(f) and may be declared as 0 percent of
the RDI in the nutrition labeling of foods in conventional food form.
They are amounts that are dietetically trivial and physiologically
inconsequential. In addition, FDA is concerned that some consumers will
be misled by the mere presence of names of nutrients within the
nutrition label, because they would assume that products with more
nutrients listed have a greater public health significance than those
with less, regardless of the amount of each nutrient present.
The agency is unaware of any reason, nor does the comment present
any reason, for allowing the declaration of nutrients that are present
in such small amounts. Thus, the agency is making no change in response
to this comment.
16. One comment requested that FDA revise Sec. 101.36(b)(3)(i) to
more clearly state the increments to be used for expressing the
quantitative amounts by weight of vitamins and minerals. Another
comment stated that amounts should not be rounded. This comment stated,
``We really see no reason why products should not be formulated to
contain the amounts stated on the label, subject to reasonable overages
based on shelf-life considerations and the like and reasonable
analytical variation.''
The agency inadvertently did not address the increments to be used
for expressing the quantitative amounts by weight of vitamins and
minerals. Proposed Sec. 101.36(b)(3)(i) stated that amounts of vitamins
and minerals are to be expressed in the increments specified in
Sec. 101.9(c) using the units of measure and the level of significance
given in Sec. 101.9(c)(8)(iv), except that zeros following decimal
points may be dropped. While the agency is adopting this rule, FDA
recognizes that, as the comment points out, Sec. 101.9(c) does not
address the question of the increments in which the quantitative
amounts of vitamins and minerals are to be declared because in the
nutrition labeling of foods in conventional food form, vitamins, and
minerals are declared only as a percentage of the Daily Value. The
quantitative amounts by weight of these nutrients, except for potassium
and sodium, which are considered electrolytes, are not required in the
nutrition label of conventional foods.
The agency has considered this issue and notes that dietary
supplements, unlike most foods in conventional food form, are
fabricated to contain specific amounts of vitamins and minerals. It is
for this reason that the vitamins and minerals in dietary supplements
are categorized as Class I nutrients, and that under Sec. 101.9(g)(4),
a food is misbranded if it contains less of an added vitamin or mineral
than the amount declared on the label. In view of how dietary
supplements of vitamins and minerals are made, the agency agrees that
it makes no sense to permit the amounts of vitamins and minerals in
such products to be rounded and declared only in specified increments.
Therefore, the agency has modified Sec. 101.36(b)(3)(i) to provide that
the actual amounts of vitamins and minerals in the supplement are to be
declared using the units of measure specified in Sec. 101.9(c)(8)(iv),
except that zeros following decimal points may be dropped.
With respect to levels of significance, that is, the number of
decimal places used in declaring amounts, the agency proposed that only
the levels of significance shown in Sec. 101.9(c)(8)(iv) could be
presented. In some cases, however, the number of decimal places allowed
is not sufficient to express actual amounts of certain vitamins and
minerals because the amounts are very small. For example, a product
that contains 10 percent of the Daily Value for copper would contain
0.2 mg of copper. If the amount of copper had to be expressed using the
same level of significance as that used in Sec. 101.9(c)(8)(iv) for
expressing its RDI (i.e., 2 mg), the lowest amount that could be
declared would be 1 mg, which would be inaccurately high.
To ensure that amounts of vitamins and minerals that have
nutritional significance can be declared, the agency is modifying
Sec. 101.36(b)(3)(i) to provide that amounts shall be expressed in the
increments specified in Sec. 101.9(c), except that additional levels of
significance may be used when the number of decimal places indicated is
not sufficient to express lower amounts (e.g., the RDI for copper is
given in whole mg, but the quantitative amount may be declared in
tenths of a mg). Additionally, the agency is modifying
Sec. 101.36(b)(3)(i) to describe how amounts of the nutrients from NAS'
9th and 10th editions (Refs. 2 and 10) for which RDI's have not been
established are to be declared. Amounts for chloride, fluoride, and
manganese shall be expressed in mg, and amounts for chromium,
molybdenum, selenium, and vitamin K shall be expressed in g.
These values shall be expressed in whole numbers, except that tenths
may be used for fluoride. These values reflect the amounts in which the
RDI's or EASDDL's for these nutrients are given (Refs. 2 and 10).
17. One comment stated there was an apparent inconsistency between
the requirement in Sec. 101.36(b)(3)(ii) that nutrients ``be listed in
the order specified in Sec. 101.9(c) except that calcium and iron, when
present, should be grouped with other minerals,'' and the sequence of
vitamin D and vitamin E in the examples provided in Sec. 101.36(c)(8).
The comment recommended that the appropriate order of nutrients be
clarified in the regulations.
While FDA finds no inconsistency with the sequence of vitamin D and
vitamin E in the sample labels provided in Sec. 101.36(c)(8), the
agency points out that there was an error in the order of nutrients in
Sec. 101.9(c)(8)(iv) in the Federal Register of January 6, 1993 (58 FR
2227). FDA published a correction in the Federal Register of April 1,
1993 (58 FR 17104), which listed the order as follows: Vitamin A,
vitamin C, calcium, iron, vitamin D, vitamin E, thiamin, riboflavin,
niacin, vitamin B6, folate, vitamin B12, biotin, pantothenic acid,
phosphorus, iodine, magnesium, zinc, and copper. This order is the one
used by FDA in the June 18, 1993, proposal on nutrition labeling of
dietary supplements of vitamins and minerals, except that calcium and
iron were listed with the minerals, following pantothenic acid.
The agency wishes to make these regulations as clear as possible.
Therefore, in response to the comment's request for clarification of
the appropriate order of nutrients, and to make clear where in the list
to include the nutrients that have no RDI but that are required to be
included in the nutrition label on dietary supplements of vitamins and
minerals when they are present, FDA is revising Sec. 101.36(b)(3)(ii)
to specify the exact order in which vitamins and minerals are to be
declared (see section II. comment 1. of this document). Any nutrients
not present in the supplement, or present at insignificant levels, must
be omitted from the list.
18. At least one comment requested that vitamins be listed in
alphabetical order. Another comment requested that calcium and
magnesium be the first minerals to be listed.
The agency has not accepted these suggestions. As discussed in the
nutrition labeling proposal for dietary supplements (58 FR 33719), with
the exception of calcium and iron, FDA proposed in
Sec. 101.36(b)(3)(ii) that nutrients declared in the nutrition labeling
of vitamin or mineral supplements be listed in the order that nutrients
are listed in the nutrition labeling of foods in conventional food
form. The agency proposed that calcium and iron be listed after the
listing of any vitamins that are present so that all of the vitamins
will be grouped together. While vitamin A and vitamin C are to be
listed first, consistent with Sec. 101.9(c), they are then followed by
the fat-soluble vitamins, then the water-soluble vitamins and the
minerals. The NAS in its RDA publications has traditionally grouped the
fat-soluble vitamins ahead of the water-soluble vitamins. The agency
notes that this order is followed on the labels of many vitamin
supplements in the marketplace. The comment requesting alphabetical
order gave no convincing justification for following a different order,
and, thus, FDA is not changing the order.
Additionally, the comment requesting that calcium and magnesium be
the first minerals to be listed presented no reason for the agency to
make this change. Calcium and iron are required to be the first
minerals listed on the labels of foods in conventional food form. In
the absence of any reason for why calcium and magnesium should be the
first minerals to be declared on the labels of supplements of vitamins
and minerals, the agency is making no change in the order for minerals.
19. One comment requested that Sec. 101.36(b)(3)(ii) be revised to
require that potassium be listed with the other minerals, preferably
last on the list. This comment and others expressed confusion about
whether potassium could be listed and requested clarification. One
comment requested that Sec. 101.36(b)(3) be clarified to allow for the
voluntary listing of potassium in dietary supplements because,
according to the comment, potassium is usually present at less than 100
mg per tablet, primarily because of existing FDA restrictions on
potassium salt preparations.
The agency agrees that the listing of potassium needs
clarification. Potassium is not required to be listed on the nutrition
label of foods in conventional food form. However, it can be listed
voluntarily, and when it is, it is to be listed under sodium, as an
electrolyte rather than with the minerals. In contrast, the agency
proposed that potassium be required to be listed on the nutrition label
of dietary supplements of vitamins and minerals when present in
supplements at more than insignificant amounts (i.e., 5 mg and above),
consistent with the listing of other vitamins and minerals. The agency
knows of no reason why potassium in supplements of vitamins and
minerals should be treated differently from other vitamins and minerals
in these products, and the comment did not provide a reason for why the
listing of potassium should be voluntary rather than mandatory.
Therefore, the agency is not making this change. However, the agency is
modifying the language of Sec. 101.36(b)(3) to make it clear that the
declaration of potassium is required when it is present at more than
insignificant amounts. To this end, FDA has revised the second sentence
of Sec. 101.36(b)(3) to state: ``In addition, potassium * * * shall be
declared, except when present at an amount that allows a declaration of
zero * * *. ''
With respect to the placement of potassium within the nutrition
label, FDA agrees with the comment that the regulation should be
modified. The proposal stated that nutrients that are present shall be
listed in the order specified in Sec. 101.9(c), which would mean that
potassium, as well as sodium, would precede the listing of any other
vitamins or minerals present in a supplement. FDA has concluded that it
is not appropriate and might confuse consumers to have the declaration
of potassium, as well as that of sodium, precede the declaration of
other vitamins and minerals on these labels because traditionally
vitamins have appeared first. The agency agrees with the comment that
it is appropriate for potassium to be listed at the bottom of the list
because it is an electrolyte, and the electrolyte, chloride, is listed
at the bottom. For the same reason, the agency concludes that sodium
should be listed with the other electrolytes. Accordingly, the agency
is revising Sec. 101.36(b)(3)(ii) to state that sodium and potassium
should be listed, in that order, following the electrolyte chloride at
the bottom of the list of minerals.
20. One comment requested clarification regarding the labeling to
be used on a package that has two compartments, each containing a
different supplement to be taken at the same time, three times daily
with meals. The company asked if the regulations permit the information
for both supplements to be reported aggregately in one nutrition label
that has one column of names and amounts and one column of percent
Daily Values. The firm requested that if an aggregate label is not
permitted, the additional nutrition label be permitted in a package
insert. The company also asked how the information should be presented
if children one to four years of age are to take the same amount as
adults, and how it is to be presented if such children are to take half
the amount of adults.
The agency advises that if two supplements are to be taken at the
same time, one unit of each three times daily, the nutrition
information for both supplements must be reported aggregately. In this
situation, the serving size must clearly state that a serving includes
one of each supplement, with one column listing names and the total
quantitative amount by weight for both supplements and another column
containing the total percent Daily Values. If this product is also
represented for use by children one to four years of age, the percent
Daily Values for this age group would have to be presented in a third
column. In the case where the serving size is different for children, a
nutrition label for adults and a separate nutrition label for children
must be used to avoid confusion.
21. A few comments requested that the declaration of the percent of
vitamin A present as beta-carotene be mandatory. These comments argued
that this information is needed to help consumers compare the amounts
of beta-carotene in various products. They stated that this information
would help consumers understand claims such as ``Now with beta-
carotene.'' One of these comments requested the voluntary declaration
of the quantitative amount of beta-carotene in addition to the
percentage of vitamin A present as beta-carotene. This comment stated
that calculations of vitamin A and beta-carotene values are difficult
even for scientists, and that merely providing a percentage will not
allow consumers to readily determine just how much beta-carotene is
present in the product. The comment requested that the amount of beta-
carotene be expressed in mg. Two comments requested that the percent of
vitamin A present as retinol also be mandatory. One of these comments
explained that most people are better off getting their vitamin A from
beta-carotene rather than from retinol because beta-carotene is safer
in high doses and may help reduce the risk of certain cancers, heart
disease, cataracts, and other health problems.
FDA is not persuaded that the declaration of the percent of vitamin
A present as beta-carotene should be mandatory because quantitative
recommendations about the intake of beta-carotene have not yet been
established by the scientific community. In the July 19, 1990,
mandatory nutrition labeling proposal (55 FR 29476 at 29493), the
agency set out the factors that it considered in deciding whether a
nutrient or food component should be mandatory or voluntary in
nutrition labeling:
The agency has proposed to make the declaration of a nutrient or
food component mandatory in nutrition labeling when quantitative
intake recommendations with respect to the nutrient or component are
highlighted in the reports * * * (e.g., ``Reduce total fat intake to
30% or less of calories.'' * * *), and the nutrient or
component is of particular public health significance as defined in
several recent consensus documents * * *. On the other hand, for
those nutrients or food components for which quantitative intake
recommendations are not highlighted but that do have some public
health significance * * *, or for which quantitative recommendations
are available but that are not of pressing public health importance
(e.g., the Recommended Dietary Allowances for several vitamins and
minerals * * *), the agency is proposing to make declaration of the
nutrient or component voluntary.
(55 FR 29487 at 29493.)
The agency concludes that its decision to have the percent of
vitamin A present as beta-carotene be voluntary is consistent with
these guidelines because quantitative intake recommendations have not
been established. On the other hand, if a claim about beta-carotene is
made, information on the percent of vitamin A present as beta-carotene
is needed to help consumers to understand the claim. Therefore, the
agency is modifying Sec. 101.36(b)(3)(iv) to require declaration of the
percent of vitamin A present as beta-carotene when a claim is made
about beta-carotene. The agency tentatively concludes that a parallel
change in Sec. 101.9(c)(8)(vi) for the labels of foods in conventional
food form is appropriate. The agency intends to propose this change in
the near future.
The agency is accepting the comment's suggestion to provide that
when the percent of vitamin A present as beta-carotene is declared, the
quantitative amount of beta-carotene may also be declared voluntarily.
The agency is persuaded by the comment that this information on the
labels of dietary supplements of vitamins and minerals would be useful
to those individuals who are interested in maintaining a certain
quantitative intake of beta-carotene in their diets.
The agency notes that the comment requested that the amount of
beta-carotene be declared in terms of mg. However, the agency is
requiring that international units (IU) be used in place of mg to be
consistent with the declaration of vitamin A. FDA finds the usefulness
of this added information would be reduced if the units used to
quantify vitamin A and beta-carotene levels differ.
Accordingly, the agency is amending Sec. 101.36(b)(3)(iv) to
provide that when the percent of vitamin A present as beta-carotene is
declared, the quantitative amount in terms of IU may also be declared,
e.g., ``Vitamin A 5000 IU (90 percent (4500 IU) as beta-carotene'').
The agency intends to propose a parallel change in Sec. 101.9(c)(8)(vi)
as soon as possible. Until the agency does so, the agency advises that
it is unlikely that it will take enforcement action against foods
regulated under Sec. 101.9 that declare beta-carotene in a manner
consistent withSec. 101.36(b)(3)(iv) as long as they comply with
Sec. 101.9 in all other respects.
Additionally, the provision on type size requirements for the added
statement on beta-carotene in Sec. 101.36(c)(6) is corrected to refer
to paragraph (b)(3)(iv) instead of to (b)(3)(ii). There was an
inadvertent error in this reference in the proposal.
With respect to retinol, the agency concludes that, in accordance
with the guidelines set out above, the declaration of retinol should be
neither mandatory nor voluntary because of the absence of quantitative
intake recommendations and of public health significance. Thus, the
agency is not changing the proposed rule to provide for the inclusion
of retinol in the nutrition label.
22. One comment requested that Sec. 101.36(b)(3)(v) be revised to
``permit common synonyms,'' instead of only the synonyms specified.
This comment stated that allowing all synonyms would provide people
with more information and would ensure that the contents of products
were, in fact, comprehensible to more people. The comment mentioned,
for example, that niacin is known by many as vitamin B3 and vitamin E
by the name alpha-tocopherol. Another comment expressed support for
restricting the use of synonyms to the ones allowed in the proposed
rule.
The agency is not persuaded that the provision on synonyms should
be revised to ``permit common synonyms,'' instead of only the synonyms
specified. The terminology that the agency has recognized is that which
is used in NAS' RDA table (Ref. 2). These include: Vitamin C (ascorbic
acid), thiamin (vitamin B1), riboflavin (vitamin B2), folate (folacin),
and calories (energy). The agency has restricted the use of synonyms to
simplify nutrition labeling and to avoid potential confusion among
consumers. The agency believes that allowing the unrestricted use of
other synonyms will contribute to confusion about the nutrients that
are present in the product. It will also make product comparisons more
difficult because of the absence of consistent terminology. Therefore,
FDA is not making the change requested by the comment.
23. At least one comment requested that the nutrition label of
vitamins with iron, for example, be allowed to highlight the listing of
iron. The comment stated that such highlighting is a useful and
necessary tool to differentiate various product lines.
The agency is not persuaded that the highlighting of iron in the
example described in the comment is necessary for consumers to
differentiate between various product lines because the name, or
statement of identity, of the product must identify the product as a
multivitamin with iron. This identification is sufficient to
differentiate the product from other multivitamin products. As
discussed in the mandatory nutrition labeling final rule (58 FR 2079 at
2138), FDA is not permitting highlighting of this type because it can
be used inconsistently in a way that would be potentially misleading to
consumers. Among products with similar nutrition profiles, some would
highlight certain nutrients and others would not. Consumers could not
depend on the fact that all labels of similar products would look the
same, and the differences in highlighting could undermine the
credibility of the information on the nutrition label and lead to
consumer confusion. Accordingly, the agency is not providing for the
highlighting requested by the comment.
24. A number of comments suggested that the source of a vitamin or
mineral be included in the nutrition label immediately following the
listing of that vitamin or mineral, in a manner similar to the allowed
listing of beta-carotene as a source of vitamin A. One comment stated
that this information should be listed in a separate column entitled
``Source.'' One comment requested that the source information should at
least be optional. The comments stated that if this suggestion is
adopted, it will be unnecessary to repeat source information in the
ingredient statement, and one comment requested that the regulations on
ingredient labeling be revised accordingly. The comments said that this
approach would conserve space and more effectively communicate source
information to consumers.
The agency notes that the parenthetical listing of the source of a
vitamin or mineral in the nutrition label is a common practice by some,
but not all, manufacturers in the dietary supplement industry. The
agency finds, however, that the comments submitted failed to provide
adequate justification and supporting information demonstrating that
adoption, on an industry-wide basis, of this manner of expressing
nutrition and ingredient information would result in a nutrition label
that is readily observable and comprehensible, as required by the act.
Comments have not demonstrated that consumers will be able to
distinguish and understand the meaning of both the nutrition and
ingredient information provided. FDA has no means on which to
determine, for example, whether the name of the source of the nutrient
is indeed that and not the chemical name of the nutrient. The comments
also failed to provide data to demonstrate that this manner of
presentation truly conserves label space, especially if additional
columns are added to the nutrition label. Further, if as suggested by
one comment, source information within the nutrition label were made
optional, the consistency of presentation of information that has been
a guiding principle of the agency throughout the food label reform
efforts would be violated. Accordingly, the agency is not providing for
the parenthetical listing of nutrient source within the nutrition
label.
The agency advises, however, that it would be receptive to a
adequately supported petition on this issue, and that it will act
expeditiously on such petition. Given that, elsewhere in this issue of
the Federal Register, the agency is establishing a date of
applicability of July 1, 1995, for the regulation governing nutrition
labeling of dietary supplements, if a petition is promptly submitted,
that petition could be acted upon before the date of applicability.
Any petition submitted to permit source declaration within the
nutrition label would have to address, in detail, at least the issues
of how the source information is to be consistently and clearly
expressed, and why this manner of expression is advantageous to the
consumer.
Because a primary purpose of the nutrition label is to allow
consumers to compare the nutrition profile of products at the point of
purchase, it is imperative that there be a high degree of consistency
in the presentation of nutrition information for all dietary
supplements. FDA would also need information on precisely how source
information should be expressed within the nutrition label. For
example, how would the source information be expressed if a single
ingredient (e.g., fish liver oil) is a source of a number of nutrients
(e.g., vitamins A and D) within a dietary supplement? If the source is
required to be listed multiple times, how does this conserve label
space? Also, would multiple listing of a source mislead consumers about
the amount of the ingredient in the food? Conversely, if a nutrient in
a supplement is provided from several sources (e.g., iodine from kelp
and potassium iodide), how would this information be clearly and
consistently conveyed? Would the source listed be all sources, or only
the primary source, of the nutrient? If source listing in the nutrition
label were to be limited to the primary source, how would the primary
source be determined? Are safeguards necessary to ensure that consumers
are not misled by inappropriate emphasis on certain sources of
nutrients? For example, how would consumers be fully informed and be
protected from being misled if a nutrient is derived from more than one
source, and only the primary source is listed, particularly if a valued
ingredient provides some, but not all, of the nutrient in question?
Should source information be p
FR Doc. 93-31813 Food Labeling; General Requirements for Nutrition Labeling for Dietary Supplements of Vitamins, Minerals, Herbs, or Other Similar Nutritional Substances
ermitted in the nutrition label only
when there is some significance to the source? For example, because
there are potential safety concerns about high intakes of vitamin A
from some other sources, FDA found that there is was a public health
reason for permitting beta-carotene to be shown as a source of vitamin
A. Should such a finding be a prerequisite for permitting source
labeling? If source labeling is limited to cases in which the source is
significant (e.g., particularly valued sources, concern about other
potential sources), how should such significance be consistently
determined?
Also, any petition on source labeling in the nutrition label should
address the issue of clarity of presentation. Section 2(b)(1)(A) of the
1990 amendments states that the nutrition information should be readily
observable and comprehensible. Would adding information about the
source of nutrients detract from the comprehensibility of the nutrition
label? Given that source information will be available in the
ingredient statement, would source declarations unnecessarily burden
the nutrition label and detract from its primary purpose of providing a
nutrient profile of the product? Would it be more difficult for
consumers to find the listing of the quantitative amounts by weight of
nutrients in the nutrition label when source information is given?
Petitions on this issue would be strengthened by the inclusion of
consumer survey or other similar data showing that consumers readily
observe and comprehend information presented in the manner suggested by
the comments.
As discussed in the mandatory labeling final rule (58 FR 2079 at
2170), dietary supplements of vitamins and minerals, like other foods,
are required to bear a complete list of ingredients. Under section
403(i)(2) of the act, the statement of ingredients must list all
ingredients of these foods, including , for example, lactose and other
fillers, artificial colors, flavors, binders, and excipients, as well
as the source of the vitamins and minerals in the dietary supplement.
This section of the act provides FDA with authority to grant exemptions
from the ingredient listing requirements, but such exemptions have not
been sought by the dietary supplement industry. The agency advises that
the fact that the name of an ingredient appears elsewhere on the label
is not, in and of itself, sufficient justification to grant such
exemptions. Therefore, any petition on this subject must address the
issue of how this manner of presentation of the source of nutrients
continues to fulfill the primary purpose of the ingredient label to
adequately inform consumers about all ingredients used to make a food,
including those that might be of concern because of personal health
reasons (e.g., lactose).
The agency advises that its current policy, as stated in the
Federal Register of August 2, 1973 (38 FR 20730) and March 16, 1979 (44
FR 16005), and in subsequent correspondence with industry (Refs. 6 and
7), is that the label for dietary supplements of vitamins and minerals
must contain a list of nutrients and a separate full statement of
ingredients, except those exempted by section 403(i)(2) of the act,
declared by their common or usual name. This policy is consistent with
the ingredient declaration requirements for other types of products.
Therefore, for all the reasons cited above, FDA has decided not to
take the action requested by these comments, pending receipt and review
of petitions on this issue.
2. Listing of Percent Daily Value
25. The agency received a number of comments that opposed the use
of the term ``Percent Daily Value'' and that stated that they preferred
to continue to use the term ``percent U.S. RDA.''
The agency disagrees with these comments. As explained in the final
rule on RDI's that published in the Federal Register of January 6, 1993
(58 FR 2206 at 2207 and 2208), the agency has established two sets of
label references values (i.e., RDI's, which were previously the U.S.
RDA's, and DRV's). Because the agency believed the use of the two terms
on food labels could be confusing to consumers, it established a single
term, ``Daily Value'' to refer to both the RDI's and DRV's (58 FR 2079
at 2124). The comments did not provide any new arguments or data that
were not considered in that rulemaking. Furthermore, the agency advises
that it knows of no reason why dietary supplements of vitamins and
minerals should not use the terminology prescribed for foods in
general. Consistency in terminology will assist consumers in
maintaining healthy dietary practices by facilitating their use of the
nutrition label to construct a healthy diet that includes both dietary
supplements and foods in conventional food form. Therefore, the agency
is not making any change in the regulations in response to these
comments.
26. One comment requested that the agency eliminate the use of the
term ``RDI'' and use the term ``DRV'' for both macronutrients and
micronutrients. The comment stated that it is confusing to have more
the one term.
The comment appears to be requesting new terms not only for the
nutrition label of dietary supplements of vitamins and minerals but
also for the nutrition label of foods in conventional food form. The
terms ``RDI'' and ``DRV'' were established in the final rule on RDI's
(58 FR 2206).As discussed in the proposed rule of July 19, 1990 (55 FR
29476 at 29479), the distinction between the RDI's and DRV's is
necessary for several reasons. First, the RDI's are based on the RDA's,
which are considered intake levels to be achieved. However, while some
DRV's are based on recommendations to increase or maintain intake of
the particular food component, other DRV's reflect levels that are
limitations on intake. Furthermore, many of the DRV's must be based on
a specific caloric intake, and, unlike the RDI's, the DRV's are not
relevant for infants and young children. Finally, the RDI's serve as
criteria for use in several regulatory functions, such as the
application of the agency's food fortification policy and the
assessment of the nutritional equivalency of imitation foods. The DRV's
do not have such uses. Therefore, FDA believes that it is appropriate
to treat RDI's and DRV's as two different sets of reference values.
However, the agency notes that both terms are referred to as ``Daily
Values'' on the nutrition label. The agency believes that the use of a
single term on the label will limit consumer confusion. Thus, the
concern articulated by the comment is fully addressed by FDA's current
regulatory scheme. Accordingly, the agency is not making the requested
change.
27. One comment requested that products containing 5 to 17 mg of
potassium should be allowed to state, ``Contains less than 1 percent of
the Daily Value of this nutrient.'' The comment explained that 17 mg of
potassium expressed to the nearest whole percent comes to ``0 percent
Daily Value'' (3,500 mg divided by 17, which rounds to zero), yet
Sec. 101.9(c)(5) only allows amounts less than 5 mg to be considered as
zero. As a result, the nutrition label of such a product would state 15
mg potassium and 0 percent Daily Value. The comment expressed concern
that such apparently contradictory statements would be confusing to
consumers.
The comment identifies a concern applicable to dietary supplements
and foods in conventional food form, namely that consumers may find it
confusing when there is a quantitative amount by weight for a nutrient,
and yet the percent Daily Value states 0 percent. This seeming conflict
can occur with sodium, potassium, and total carbohydrate on labels of
both supplements and foods in conventional food form, and with some
vitamins and minerals in dietary supplements, when both quantitative
amounts by weight and percent Daily Values are given. To avoid any
possible confusion that these apparently inconsistent declarations may
cause, the agency is modifying Sec. 101.36(b)(4)(ii) to provide for the
declaration of ``less than 1%'' in the percent of Daily Value column
when the declaration of the quantitative amount by weight is greater
than zero, and the calculation of percent Daily Value yields a value
that is less than 1 percent. The agency believes that a parallel change
in Sec. 101.9(d)(7)(ii) for foods in conventional food form is
appropriate. The agency intends to propose this change in the near
future.
Additionally, the agency notes that, consistent with
Sec. 101.9(d)(7)(ii), as modified in the technical amendments (58 FR
44063 at 44077, August 18, 1993), it is modifying Sec. 101.36(b)(4)(i)
to specify that the percent of Daily Value shall be calculated by
dividing either the amount declared on the label for each nutrient or
the actual amount of each nutrient (i.e., before rounding) by the RDI
or DRV for the specified nutrient and multiplying by 100. The agency is
making this change to provide for consistency on the food label between
the percent Daily Value and the quantitative amount by weight. The
agency had previously provided only that the amount declared be used in
the calculation.
28. One comment requested clarification of Sec. 101.36(b)(4)(iii),
which provides that when a product is represented or purports to be for
use by a group other than adults and children older than 4 years of
age, the percent Daily Value for each group must be presented in
separate columns. The comment asked if the label of a product
represented for use ``for the family'' would have to include
information for all of the groups for which FDA has established RDI's.
The agency believes that it is appropriate for the label of a
product represented for use ``for the family'' to include information
for adults and children older than 4 years of age and for children
younger than 4 years of age because families often include children in
this age group. Inasmuch as there generally would be safety concerns in
feeding infants supplements intended for use by adults, FDA also
advises that the statement ``for the family'' should be modified to
specifically exclude infants if a firm wants to include only a single
list of RDI values. The agency does not believe that this comment
requires any change in the language of the proposed rule. However, the
agency advises that for clarity, it has changed the word ``additional''
in Sec. 101.36(b)(4)(iii) to ``separate.''
D. Format
29. One comment requested that the first sentence in
Sec. 101.36(c)(1), ``The title of 'Nutrition Facts' shall be set in
type size larger than all other print size in the nutrition label and,
unless impractical, shall be set full width of the nutrition label,''
be revised to use the term ``nutrition panel'' instead of ``nutrition
label.'' The comment stated that the ``nutrition label'' could be
interpreted to mean the whole label, in which case the phrase
``Nutrition Facts'' would have to be the biggest print on the label.
The agency is not persuaded that this revision is needed. In
proposed Sec. 101.36 and in Sec. 101.9, the agency has consistently
used the term ``nutrition label'' to refer to the nutrition information
set off in a box presented under the heading of ``Nutrition Facts.''
Extensive changes would be required in both regulations to make
consistent changes wherever the term ``nutrition label'' is used.
Because no other comments indicated a similar concern, the agency is
not making the requested change.
30. One comment requested that Sec. 101.36 be revised to clarify
that selective reverse printing may not be used as a form of
highlighting, consistent with Sec. 101.9(d)(1)(iv).
The agency agrees with this comment. It unintentionally failed to
address reverse printing in Sec. 101.36. In the nutrition labeling
final rule, FDA decided not to permit reverse printing as a form of
highlighting because it would interfere with the ``consistent'' look of
the label (56 FR 2079 at 2138). For the same reason, the agency is not
permitting reverse printing on the nutrition labels of dietary
supplements of vitamins or minerals. Accordingly, the agency has
revised the second sentence of Sec. 101.36(c)(1) to read ``The title
and all headings shall be highlighted (reverse printing is not
permitted as a form of highlighting) to distinguish them from other
information.''
31. One comment stated that labels of multivitamin supplements and
multivitamin/multimineral supplements that have a total surface area
available to bear labeling of 10 or less square inches should be exempt
from the requirement in Sec. 101.36(c)(4) that all information within
the nutrition label shall have at least one point leading (i.e., space
between two lines of text). Other comments stated that this provision
of the proposed rule is appropriate.
The agency is not persuaded that the nutrition label on small
labels should be exempt from the requirement of at least one point
leading. This requirement is much less than that required for foods in
conventional food form (e.g., four point is required between nutrients
in Sec. 101.9(d)(1)(ii)(C) and does little more than insure that lines
of text do not touch). As discussed in the nutrition labeling proposal
for dietary supplements (58 FR 33715 at 33721), the agency proposed at
least one point leading because of concerns about legibility. To
maintain a consistent and distinctive format that is legible, some
leading is necessary. Accordingly, FDA is providing for the minimal
leading of one point in the nutrition labeling of dietary supplement of
vitamins and minerals and encourages manufacturers to use more leading
whenever possible. FDA is not making a similar change for dietary
supplements of herbs and of other similar nutritional substances
because comments did not demonstrate space concerns with those products
that would justify such a change.
Many of the changes in this document will help reduce space
requirements (e.g., type size changes). If a manufacturer finds that it
is still technologically infeasible or impracticable to fit the
nutrition label on a particular package, it may write to the Office of
Food Labeling as provided in Sec. 101.36(d)(2).
32. One comment requested that the kerning requirements be deleted,
and that instead, the regulation state that ``letters should never
touch,'' consistent with the technical amendments to Sec. 101.9
published on August 18, 1993 (58 FR 44063 at 44065). Another comment
requested that labels that are less than 10 square inches should be
exempt from the requirement in proposed Sec. 101.36(c)(5) that all
information within the nutrition label shall have type that is kerned
(i.e., has proximity of placement) no tighter than -4 setting. At least
one comment supported this provision of the proposed rule.
The agency agrees that the kerning requirements should be made
consistent with that for the nutrition labels on packages of foods in
conventional food form. As pointed out in a similar comment with
respect to the labeling of foods in conventional food form (58 FR 44063
at 44065), a numeric kerning value (which in effect limits the
proximity of one letter to another) has meaning only for a particular
type setting system. Each such system has a unique numeric scale, and,
as a result, a setting of -4 is meaningless for systems other than the
one that FDA used in designing its sample labels. The agency
acknowledges its error in including a single kerning limit that would
be required for all type setting systems. Accordingly, FDA is revising
Sec. 101.36(c)(5), consistent with Sec. 101.9(d)(1)(ii)(D), to delete
the requirement for a -4 setting and to state that letters should never
touch.
33. A couple of comments supported the provision in proposed
Sec. 101.36(c)(6) regarding type size, but more than ten comments
strongly opposed the provision. The agency proposed to require type
size no smaller than 8 point for nutrient information within the
nutrition label and to allow no smaller than 6 point type for column
headings and footnotes. In addition, the agency proposed to allow no
smaller than 6 point type for all of the information within the
nutrition label of packages having a total surface area available to
bear labeling of 40 or less square inches. The comments said that the
total surface area available for labeling for most dietary supplements
is well under 40 square inches. They stated that the proposed 6 point
minimum type size is far too large for many labels to include all of
the required nutrition information and to still allow space for the
ingredient statement, necessary product codes, lot number, expiration
dates, Universal Product Code (UPC) symbols, front panel copy, and
other information commonly provided on dietary supplement labels. To
alleviate this space problem, a number of comments requested that FDA
allow smaller type size. One comment requested a minimum type size of
3.0 point and another 4.0 point. However, most of the comments
suggested a minimum type size of 4.5 point, which they said is
consistent with the Nonprescription Drug Manufacturers Association
(NDMA) Label Readability Guidelines used for over-the-counter (OTC)
drugs.
The comments were divided about when FDA should allow smaller print
size. A few comments believed that smaller type is needed on labels
having up to 40 square inches of total surface area. Other comments
suggested that such type is necessary on various-sized labels, such as
those with surface areas of less than 25, 15, 12, and 10 square inches.
Finally, a few comments suggested that the regulation should state that
type size should be ``as large as possible,'' or that it should permit
manufacturers to decide for themselves.
After reviewing many dietary supplement labels, the agency is
persuaded that the 6 point minimum type size proposed for nutrition
labeling information is too large for many multivitamin and
multimineral supplement labels. The agency acknowledges that these
products often have many nutrients to declare in the nutrition label,
are often sold in relatively small packages/jars, and include on the
label other information not required for foods in conventional food
form. Therefore, FDA is accepting the recommendation, supported by the
NDMA Label Readability Guidelines, that 4.5 point minimum type size be
allowed on smaller labels. Throughout rulemaking to implement the 1990
amendments, FDA has responded to consumer concerns that the required
nutrition information be presented in a manner that will improve
legibility, particularly to help older and vision-impaired consumers
who otherwise would be effectively denied access to the nutrition
information. Because type size is a major determinant of legibility,
FDA does not believe type sizes less than 4.5 points should be allowed
on package labels and encourages manufacturers to use larger type size
when label space allows.
The agency finds that this minimum type size of 4.5 points is
appropriate on packages having less than 12 square inches of surface
area available to bear labeling. The agency selected less than of 12
square inches of area available to bear labeling as a result of its
review of the comments and because it promotes consistency within food
labeling regulations inasmuch as Sec. 101.2(c)(3)(i) uses this package
size as the standard for exempting small packages of foods from type
size requirements, and Sec. 101.9(j)(13)(i) uses it to differentiate
which food packages may use a telephone number or address for consumers
to use in obtaining nutrition information as the functional equivalent
of a nutrition label if no nutrient content or health claims are made
on the label. The agency also finds that this decision is reasonable
considering the practical need for smaller packages containing
supplements composed of many vitamins and minerals to have smaller
print, and the need for all labels to be as legible as possible.
Therefore, the agency is modifying Sec. 101.36(c)(6) to allow for
packages that have a total surface area available to bear labeling of
less than 12 square inches to use 4.5 point type size. FDA is not
making a similar change for dietary supplements of herbs and of other
similar nutritional substances because comments did not demonstrate the
same space concerns for those products. Additionally, the agency is
correcting Sec. 101.36(c)(6) to refer to paragraph (b)(3) instead of to
(b)(4) and to refer to paragraph (b)(4) instead of to (b)(4)(ii). There
were inadvertent errors in these references in the proposal.
FDA advises that under Sec. 101.36(g), dietary supplements of
vitamins and minerals may also use all provisions allowed in
Sec. 101.9(j)(13) to help accommodate the nutrition label on small and
intermediate-sized packages.
If, despite these provisions, there are still packages for which
there is insufficient area available to print all required information,
the agency advises manufacturers to write to the Office of Food
Labeling, FDA (HFS-150), on a case-by-case basis requesting alternative
means of compliance (e.g., reduced type size or leading) in accordance
with Sec. 101.36(d)(2).
34. One comment requested that all upper case lettering be allowed
for multivitamin and multimineral labels that are less than 25 square
inches in total available surface area to facilitate readability. Other
comments agreed with proposed Sec. 101.36(c)(3), which requires that
all information within the nutrition label utilize upper and lower case
letters.
In the technical amendments published in the Federal Register of
August 18, 1993, the agency modified Sec. 101.9(j)(13)(i)(B) to allow
all upper case lettering to be used on packages of food in conventional
food form that have less than 12 square inches of surface area
available to bear labeling (58 FR 44063 at 44072). To be consistent,
the agency has modified Sec. 101.36(c)(3) to allow packages of dietary
supplements of vitamins and minerals that have less than 12 square
inches of surface area available to bear labeling to use all upper case
lettering. To maximize legibility and to preserve the readily
identifiable image of the nutrition label, FDA is limiting this special
provision to small packages (i.e., those with less than 12 square
inches of surface area) rather than the 25 square inches requested in
the comment.
35. A few comments suggested ways to alleviate space problems other
than by using a smaller type size. One comment wanted to be able to
present the nutrition label on any package panel, to use the tabular or
linear method of listing nutrients, and to use the abbreviations
specified in Sec. 101.9(j)(13)(ii). Another comment requested that the
entire labeling, not just the label on the primary container, be
allowed to be used to relate nutrition information. One comment
requested that all supplements with less than 40 square inches of label
space be exempt from having a large heading entitled ``Nutrition
Facts,'' a box that surrounds the nutrition panel, and the lines that
separate each individual nutrient and the headings. Other comments
requested that the nonfunctional slack-fill regulations be revised to
allow containers to be bigger.
The agency notes that Sec. 101.36(g) provides, in part, that
dietary supplements of vitamins and minerals are subject to, among
other provisions, the special labeling conditions set out in
Sec. 101.9(j)(13) for foods in small and intermediate-sized packages.
Section 101.9(j)(13)(i) defines a small package as one that has a total
surface area available to bear labeling of less than 12 square inches
and allows for the use of an address or telephone number that a
consumer can use to obtain the required information (e.g., ``For
nutrition information, call 1-800-123-4567'') as the functional
equivalent of a nutrition label if no nutrient content or health claims
are made on the label. When foods in small packages either voluntarily
or because of nutrition claims bear nutrition labeling,
Sec. 101.9(j)(13)(i)(B) also allows the use of smaller type size than
that required on larger packages.
Section 101.9(j)(13)(ii) defines an intermediate-sized package as
one that has a total surface area available to bear labeling of 40 or
less square inches. This section of the regulations provides several
additional special labeling provisions to assist manufacturers in
fitting the required information on both small and intermediate-sized
packages. These provisions, which can apply to dietary supplements of
vitamins and minerals in small or intermediate-sized packages, include
using specified abbreviations and presenting the required nutrition
information on any label panel. Additionally, this section provides for
presenting the required information in a tabular (i.e., horizontal)
display or linear (i.e., string) fashion: (1) If the product has a
total surface available to bear labeling of less than 12 square inches,
or (2) if the product has a total surface area available to bear
labeling of 40 or less square inches, and the package shape or size
cannot accommodate a column display on any panel. Nutrition information
may be given in a linear fashion only if the label will not accommodate
a vertical or tabular display.
In response to the comment requesting use of labeling, not just the
label on the primary container, to convey nutrition information, the
agency advises that it has traditionally required that all required
information (e.g., the statement of identity, net weight statement,
ingredient list, name and place of manufacture, and nutrition
information) appear on the label of packaged foods. Labeling, which
includes materials not affixed to the package (such as posters,
notebooks, leaflets, and brochures available at the point of purchase),
may become separated from the packaged food and are inappropriate for
the delivery of required information. Therefore, FDA concludes that it
would not be appropriate to grant the request in this comment.
However, FDA considers outer packaging that securely encloses a
primary container and that is not intended to be separated from the
primary container under conditions of retail sale to be the equivalent
of the product label. Therefore, when a bottle containing a dietary
supplement in tablet, granular, or liquid form is placed within a
sealed box, the required information must be present on the outer
container where it is available to the consumer at the point of
purchase. While FDA regulations do not require that the information be
repeated on the primary container inside the box, the agency encourages
manufacturers to do so, so that consumers will have easy access to the
information once the container is removed from the outer box. Likewise,
if supplements are sold in sealed packaging that provides a cardboard
display around the primary container, the full display seen by the
consumer becomes the product label. In these situations, the required
information shall be placed on appropriate panels as directed in
Secs. 101.1 and 101.2, pertaining to the principal display panel and
the information panel, respectively.
It would not be consistent with section 2(b)(1)(A) of the 1990
amendments to allow packaging with less than 40 square inches of label
space to be exempt from graphic requirements such as having the title
``Nutrition Facts'' in the largest print within the nutrition label,
having the required information enclosed within a box, and using
hairlines to separate nutrients and headings. As stated above, the
agency concluded in the mandatory nutrition labeling final rule (58 FR
2079 at 2136) that if the nutrition label was to be readily observable
and comprehensible, it must be presented in as consistent a manner as
possible from label to label. Thus, in establishing the requirements
for the nutrition label, the agency went to great lengths to give the
format a distinctive look (e.g., through the use of a prominent
heading, highlighting of key nutrient information, and enclosure of the
information in a box) to facilitate consumer recognition of the label
and to encourage use of the information. Consistency of appearance
begins to be lost if these graphic elements are omitted on certain
packages. Such action would make it likely that some consumers would
fail to recognize the nutrition information and to understand the
significance of the information that it presented. For this reason, FDA
is not providing the flexibility requested.
However, the agency has reviewed the format requirements in
response to these comments concerned about space problems. To help
alleviate space problems, the agency has concluded that it can provide
for flexibility in the placement of the heading,``% Daily Value.'' When
a dietary supplement contains less than 5 calories per serving,
``Calories'' need not be declared. In this situation, shown in the
sample labels in Sec. 101.36(c)(8) of the proposal (58 FR 33715 at
33728 through 33730), the heading ``% Daily Value'' is placed to the
right and under the bar beneath the heading ``Amount Per Serving.''
Because there is sufficient space on one line for both headings, the
agency is modifying Sec. 101.36(b)(4) to provide that the heading ``%
Daily Value'' may be placed on the same line as the heading ``Amount
Per Serving,'' when calorie information is not required to be declared.
Also, consistent with provisions in Sec. 101.9(d)(11)(i) and (ii)
that allow lower portions of the vertical format to be split and moved
to the contiguous right, FDA is providing in Sec. 101.36(c)(10) that,
if space is not adequate to list the required information in one
vertical list (as shown in the sample labels in Sec. 101.36(c)(9)), the
list may be split and the lower information moved to the right as long
as the headings are repeated. The list to the right should be set off
by a line that distinguishes it and sets it apart from the nutrients
and the percent Daily Value information given to the left. A sample of
this split format is included in Sec. 101.36(c)(10).
The agency is not convinced by the comment that the nonfunctional
slack-fill regulations should be revised to allow containers of dietary
supplements to be larger than otherwise necessary to accommodate the
labeling requirements. As discussed in the final rule on nonfunctional
slack-fill (58 FR 64123 at 64134, December 6, 1993), the agency knows
of no reason for treating dietary supplements differently from foods in
conventional food form. In response to this and the other comments
suggesting ways to alleviate space constraints, the agency advises that
many of the changes that FDA has made from the proposal will help to
reduce space requirements (e.g., reduced type size requirements on
packages of dietary supplements of vitamins and minerals). If
manufacturers find that it is still technologically infeasible or
impracticable to fit the nutrition label on a particular package, they
may write to the Office of Food Labeling as directed in
Secs. 101.9(g)(9) and 101.36(d)(2). The agency points out that any
information, other than the net quantity of contents and statement of
identity, may be printed parallel to the base of a package. Thus, the
nutrition label may be printed parallel to the base of a package, which
may provide more space for this information. However, FDA urges
manufacturers to strive for consistency of presentation of nutrition
information in the market.
36. One comment requested that hairlines be required to separate
lines of nutrient declarations, and that these hairlines be centered
between the lines of text. This comment also requested clarification
that Appendix B to part 101, which is referenced in Sec. 101.36(c)(8),
contains several nonrequired elements, such as Helvetica typeface, at
least 13 point type for ``Nutrition Facts,'' and a specific thickness
for the separating bars on the nutrition label.
As discussed in the nutrition labeling proposal for dietary
supplements (58 FR 33715 at 33716), the agency intends that the
nutrition labeling on vitamin or mineral supplements be presented in a
manner that is as similar as possible to the nutrition labeling of
foods in conventional food form. Hairlines are required in the
nutrition labeling of foods in conventional food form as specified in
Sec. 101.9(d)(1)(v). The agency intended that Sec. 101.36 contain a
similar provision. However, it inadvertently failed to specifically
provide for hairlines in the proposed rule, although it included
hairlines in the samples labels presented in proposed Sec. 101.36(c)(9)
and urged that the graphic specifications set forth in Appendix B to
part 101 be followed. These graphic specifications describe the use of
hairlines under C-2. Accordingly, the agency concludes that it is
appropriate to modify Sec. 101.36(c) to require hairlines in
Sec. 101.36(c)(7) and to redesignate paragraphs (c)(7) and (c)(8) as
paragraphs (c)(8) and (c)(9), respectively, to reflect this
modification. New Sec. 101.36(c)(7) states: ``A hairline rule that is
centered between the lines of text shall separate each nutrient and its
corresponding percent Daily Value required in paragraph (b)(4) of this
section from the nutrient and percent Daily Value above and below it,
as shown in paragraph (c)(9) of this section, and shall separate
'Amount Per Serving' from the calorie statement, when the listing of
calories is required.''
With respect to Appendix B, the comment is correct in stating that
Appendix B contains several nonrequired elements, such as Helvetica
typeface, a specified type size for the title ``Nutrition Facts,'' and
a specific thickness for the separating bars on the nutrition label.
The required graphic elements are specified in Sec. 101.36(b) and (c).
37. A couple of comments objected to the bar at the bottom of the
nutrition label and requested that this requirement be deleted. They
stated that it is unnecessary and may interfere with the scanning of
the UPC symbol. Another comment requested that Sec. 101.36(c) be
revised to require a bar following the final vitamin or mineral listed.
Other comments supported the proposal.
In Sec. 101.36(b)(3)(ii), FDA proposed to require a bar at the
bottom of the nutrition label of dietary supplements of vitamins and
minerals to help ensure that the nutrition label on these types of
foods has the same readily identifiable image, or ``look,'' as the
nutrition label on foods in conventional food form (58 FR 33715 at
33719). Comments to the agency's proposed rule on the format for
nutrition labeling (57 FR 32058, July 20, 1992) had argued that a
consistent look to the required nutrition information on food packages
will help consumers find the information on the package and to
recognize it for what it is--a profile of the nutrient content of the
food. These comments convinced FDA that the specific format elements
mandated provide a visually integrated image that will give the
nutrition label a uniform appearance across the various types of
packages in the market and will enhance consumer use of the
information. Nothing in the comments on proposed Sec. 101.36 provide
the basis for a different conclusion. FDA finds that contrary to the
comments' assertion, this bar contributes directly to the consistent
look of the nutrition label. To avoid any possible interference of the
bar at the bottom of the nutrition label with the scanning of the UPC
symbol, manufacturers may design the package layout so that the UPC
symbol is not adjacent to the nutrition label. Accordingly, the agency
is not modifying Sec. 101.36(b)(3)(ii) in response to these comments.
38. One comment requested that bars be required after ``Serving
Size'' and ``Amount Per Serving.''
The agency points out that Sec. 101.36(b)(3) requires that the
heading ``Amount Per Serving'' be separated from other information on
the label by a bar above and beneath it. Thus, the upper bar will be
beneath the declaration of ``Servings Per Container'' or, when
``Servings Per Container'' is not required, of ``Serving Size.'' The
lower bar would separate the declaration ``Amount Per Serving'' from
the heading ``Percent Daily Value.'' The agency notes that this bar
should follow information on calories, when that information is
declared (i.e., when the dietary supplement of vitamins and minerals
contains 5 or more calories), to be consistent with the labeling of
foods in conventional food form (Sec. 101.9(d)(6)). However, the agency
inadvertently failed to specify in the proposed rule where this bar
should be placed. As discussed in the nutrition labeling proposal for
dietary supplements (58 FR 33715 at 33716), the agency intended that
the nutrition labeling on vitamin and mineral supplements be presented
in a manner as similar as possible to the nutrition labeling of foods
in conventional food form. Therefore, FDA finds that it is the logical
outgrowth of the proposal to specify in this final rule where the bar
following ``Amount Per Serving'' should be placed when information on
calories is declared in a nutrition label for a dietary supplement of
vitamins or minerals. Accordingly, the agency is modifying
Sec. 101.36(b)(3) to state: ``The heading 'Amount Per Serving' shall be
separated from other information on the label by a bar above and
beneath it, except when calories are listed, the bar shall be placed
beneath the calorie declaration.''
E. Compliance and Exemption Issues
39. At least three comments requested that dietary supplements be
able to indicate compliance with United States Pharmacopeia (USP)
requirements. One of these comments requested that a new paragraph,
Sec. 101.36(d)(3), be added that would provide that the label could
bear a box entitled ``Nutrition Facts'' that would contain nutrition
information for USP recognized substances that are the source of
vitamins and minerals. Immediately below that box, the label would bear
another section entitled, ``Other Ingredients'' that would list all
additional ingredients present in more than insignificant amounts,
followed by a listing of all other added substances incorporated in the
product as excipients. The comment stated that by listing all other
ingredients present, consistency with section 411(b)(2)(A)(i) of the
act would be achieved. Alternatively, this comment requested that the
following sentence be added after the first sentence of
Sec. 101.36(d)(2): ``Such allowances will also be considered where a
firm produces an article that purports to comply with the requirements
of the official USP and seeks to label it in accordance with the
requirements of the Pharmacopeia.'' The comment stated that this new
sentence would allow firms to comply with USP labeling requirements
with FDA's permission. Additionally, this comment requested that the
name of products that meet USP quality standards be followed by the
letters ``USP.''
Both of the comment's suggested changes in Sec. 101.36(d) would
allow for two very different forms of nutrition labeling on dietary
supplements of vitamins and minerals, depending upon whether a
manufacturer chose to follow FDA's requirements, which are generally
consistent with Sec. 101.9, or USP's, which would list only USP
recognized nutrients in the top box. A manufacturer's decision to
follow the USP approach would result in a nutrition label that was
inconsistent with labels of other dietary supplements of vitamins and
minerals, with dietary supplements of herbs and other similar
nutritional substances, and with foods in conventional food form. The
comment also appears to request that the determination of whether or
not a nutrient should be listed in the nutrition label should be based
upon its USP status.
FDA finds that it would not be consistent with section 2(b)(1)(A)
of the 1990 amendments to provide the flexibility sought by these
comments. As discussed in response to earlier comments, the agency
decided in the mandatory nutrition labeling final rule that if the
nutrition label was to be readily observable and comprehensible, it
must be presented in as consistent a manner as possible from label to
label. Thus, it was the agency's determination that, whenever possible,
nutrition labeling requirements should ensure a distinctive look and
order of nutrients to facilitate consumer recognition and understanding
of the label and to encourage use of the information. Allowing two
different nutrition labeling schemes would make it likely that some
consumers would fail to recognize the nutrition information or would be
too confused to be able to use it fully. FDA has made the same decision
with respect to dietary supplements and thus is not providing the
flexibility requested.
However, in regard to the request that the name of ingredients of
USP quality be allowed to indicate USP status, the agency advises that
although statements appearing outside of the nutrition label are beyond
the scope of this final rule, it would not object to the use of
truthful and nonmisleading statements regarding USP status elsewhere on
product labels. Further, FDA would not object to the use of the USP
symbol in the ingredient list to identify those ingredients that are
USP grade. The agency advises that it will not consider the USP symbol,
when used in this way, to constitute intervening material in the
ingredient list.
40. One comment requested that FDA recognize USP methodology. This
comment stated that Sec. 101.36(d)(1) requires that dietary supplements
comply with Sec. 101.9(g)(2), which specifies Association of Official
Analytical Chemists (AOAC) test methodology for nutrient analysis.
The agency wishes to clarify that Sec. 101.9(g)(2) states that when
FDA determines compliance, it will analyze composite samples by
appropriate methods as given in the ``Official Methods of Analysis of
the AOAC International,'' 15th edition, or, if no AOAC method is
available or appropriate, by other reliable and appropriate analytical
procedures. Manufacturers, however, are free to use whatever
methodology they believe will give results consistent with methods used
by FDA. Therefore, the requested change is unnecessary.
41. One comment requested that the compliance criteria be revised
to allow the actual content of any vitamin or mineral in a dietary
supplement to be 90 percent, instead of at least 100 percent, of the
declared value. This comment stated that the proposed rule (i.e.,
Sec. 101.36(d)(1), which refers to Sec. 101.9(g)(1) through (g)(2))
requires that products that contain added vitamins and minerals provide
at least the amount declared for each nutrient. The comment stated that
consideration should be given to the fact that many dietary
supplements, while formulated to contain at least 100 percent of the
declared amount, are designed to retain only at least 90 percent of
their declared amount over the shelf life declared on these products.
The comment attributed this practice to the fact that USP monographs
for several nutritional products require a minimum nutrient content of
90 percent of the label declaration.
The agency is not persuaded by this comment. As previously
discussed in response to a similar comment in the mandatory nutrition
labeling final rule (58 FR 2079 at 2171), dietary supplements of
vitamins and minerals are fabricated products. The comments provided no
convincing reason for why they should not be held to the same standards
as foods in conventional food form that are fortified or enriched. The
agency has informed USP that anything less than 100 percent of the
value declared on the label for vitamin and mineral products is not
acceptable to FDA, and that the only permissible deviation from this
requirement would be a deviation that is attributable to the
variability of the analytical method (Ref. 8).
The agency notes that, contrary to the statement in the comments,
the General Notices of the USP state that a dosage should be formulated
to provide 100 percent of the labeled amount (Ref. 9). The limits in
the USP monographs allow for overages of ingredients known to decrease
with time, for analytical error, for manufacturing and compounding
variations, and for deterioration to an extent considered insignificant
under practical conditions (Ref. 9).
42. One comment pertained to small businesses. The comment stated
that ``burdening the manufacturer with the cost of the nutrition
labeling requirements (listing that a vitamin supplement contains no
fat, no protein, no carbohydrate, etc.) would be a useless exercise,
especially in the case of the marketing of a single ingredient
substance.'' The comment requested that Sec. 101.36(f)(1) of the
proposed rule be revised to either delete the nutrition labeling
requirement for small businesses or to allow the nutrition label to
declare only those nutrients actually present in the supplement.
The agency believes that this comment misunderstood the proposed
rule. As the comment requested, the agency requires nutrition labeling
``only with respect to those substances actually contained in the
supplement.'' Manufacturers are not burdened with the cost of declaring
that a vitamin supplement contains no fat, no protein, or no
carbohydrate if they do not. Only nutrients present in significant
amounts are required to be declared under Sec. 101.36(b)(3). Therefore,
the agency is not changing the regulation in response to this comment.
FDA notes that Congress recently passed, and the President signed
on August 13, 1993, the Nutrition Labeling and Education Act Amendments
of 1993 (Pub. L. 103-80) that modified the treatment of small
businesses. As a result of this change, the exemption from nutrition
labeling requirements for small businesses that are food manufacturers
will be based on the number of employees in a firm and the number of
units of each product sold. FDA expects to publish a proposal to amend
Secs. 101.9 and 101.36 to reflect the new law.
F. Misbranding
43. One comment stated that Sec. 101.9(k)(1) through (k)(6) should
not apply to dietary supplements. The comment stated that
Sec. 101.9(k)(1) is overbroad such that it suppresses truthful,
nonmisleading speech about the beneficial properties of a nutrient
supplement product that may, by virtue of the supplement's inherent
properties, not only be a food but also aid in the prevention, cure,
mitigation, or treatment of any disease. This comment did not focus on
why Sec. 101.9(k)(2) through (k)(6) should not apply to dietary
supplements. Other comments specifically mentioned that the first
sentence of Sec. 101.9(k)(5) is vague, confusing, and contradictory.
This sentence provides that a food shall be deemed to be misbranded if
its label or labeling represents, suggests, or implies that the food
has dietary properties when such properties are of no significant value
or need in human nutrition. These comments suggested that this sentence
be revised to read: ``A food shall be deemed to be misbranded if its
label claims or represents that the food has a significant value or
need in human nutrition when the scientific evidence for the claim does
not exist.'' These comments argued that this change is necessary
because ``significant value or need in human nutrition'' is a matter of
consumer perception. They said that to a small child, the need for
eating spinach is very low, but to the mother the need for spinach is
very high. Other comments specifically agreed that Sec. 101.9(k) should
apply to dietary supplements of vitamins and minerals.
The agency does not agree with the comment that Sec. 101.9(k)(1)
through (k)(6) should not apply to dietary supplements, or that
Sec. 101.9(k)(1) suppresses truthful, nonmisleading speech. The comment
did not provide any basis for the agency to conclude that this
provision is not applicable to dietary supplements, or that it
suppresses truthful, nonmisleading speech.
In the final rule on nutrition labeling of January 6, 1993 (58 FR
2079 at 2167), the agency pointed out that the provisions of
Sec. 101.9(i) (redesignated as (k)) had long been in effect at the time
Congress drafted the 1990 amendments. While Congress did enact
provisions under the 1990 amendments that allow for health claims on
foods, nothing in the act or in the legislative history of the act
suggest that Congress intended that Sec. 101.9(i) should be changed.
Nor did the comments present any persuasive arguments that
Sec. 101.9(k)(5) of the proposed rule should be amended. The agency
does not agree that whether or not a significant value or need in human
nutrition has been established is a matter of consumer perception. The
agency notes that the phrase ``significant value or need in human
nutrition'' was promulgated and published in the Federal Register of
January 19, 1973 (38 FR 2125). In that final rule (38 FR 2125 at 2128),
the agency explained that over the years there have been a number of
ingredients of products marketed as nutrients and nutritional
supplements that have not been shown to be essential in human
nutrition, such as rutin, other bioflavonoids, para-aminobenzoic acid,
and inositol. The agency stated that calling attention to these
ingredients in a manner that implies some nutritional benefit is
misleading. The agency concludes that the language of Sec. 101.9(k)(5)
remains clear and does not need clarification.
Therefore, the agency is making no change in Sec. 101.9(b) in
response to these comments.
IV. Other Provisions
FDA did not receive any comments that dealt specifically with the
other provisions of the proposal. In the absence of any basis for doing
otherwise, FDA is adopting those provisions as proposed.
V. Economic Impact
In its dietary supplement labeling proposals of June 18, 1993, FDA
stated that the proposed rules on the labeling of dietary supplements,
taken as a whole, would have associated costs of approximately $20
million. Thus, the agency concluded that the proposed rules do not
constitute a major rule as defined by Executive Order 12291. In
accordance with the Regulatory Flexibility Act (Pub. L. 96-354), FDA
explored whether the proposed rules may have a significant impact on
small businesses and tentatively concluded that they do not.
FDA has evaluated the many comments that it received in response to
its economic impact analysis. Because the issues raised in the comments
relate to all three proposals, FDA has combined its discussion of these
comments and presented them in the final rule regarding a delay in the
date of application, which is published elsewhere in this issue of the
Federal Register.
FDA has examined the economic implications of the final rules
amending 21 CFR as required by Executive Order 12866 and the Regulatory
Flexibility Act. 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 effects; distributive impacts; and equity). The
Regulatory Flexibility Act requires that the agency analyze options for
regulatory relief for small businesses. FDA has concluded, based on its
review of the available data and comments, that these final rules are
not significant as defined by Executive Order 12866. Further, in
accordance with the Regulatory Flexibility Act, the agency certifies
that these final rules will not have a significant impact on a
substantial number of small businesses.
VI. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(11) that this
action is of a type 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.
VII. References
The following references have been placed on file in the Dockets
Management Branch (address above) and may be seen by interested persons
between 9 a.m. and 4 p.m., Monday through Friday.
1. Food and Nutrition Board, Division of Biology and
Agriculture, National Research Council, ``Recommended Dietary
Allowances, 7th ed., 1968,'' publication 1694, Printing and
Publishing Office, NAS, Washington, DC, 1968.
2. Subcommittee on the 10th edition of the Recommended Dietary
Allowances, Food and Nutrition Board, Commission on Life Sciences,
National Research Council, ``Recommended Dietary Allowances, 10th
edition,'' NAS, Washington, DC, National Academy Press, 1989.
3. Levy, A., S. B. Fein, and R. E. Schucker, ``More Effective
Nutrition Label Formats Are Not Necessarily More Preferred,''
Journal of the American Dietetic Association, 92:1230-1234, 1992.
4. Gardner, T. S., and E. T. Guarino, Grocery Manufacturers of
America, Inc., Letters to Dockets Management Branch, June 3, 1992.
5. Levy, A. S., S. B. Fein, and R. E. Schucker, ``Evaluation of
Nutrition Label Formats: FDA Study 2,'' Center for Food Safety and
Applied Nutrition, FDA, Washington, DC, March, 1992.
6. FDA opinion letter, Taylor M. Quinn, Office of Compliance,
Bureau of Foods, to Stanley Skelskie, March 30, 1979.
7. FDA opinion letter, Taylor M. Quinn, Office of Compliance,
Bureau of Foods, to Stanley Skelskie, January 25, 1980.
8. Tanner, J. T., Letter to V. Srinivasan, U.S. Pharmacopeial
Convention, Inc., May 7, 1991.
9. U.S. Pharmacopeial Convention, Inc., ``USP XXII, NF XVII, The
United States Pharmacopeia,'' The National Formulary, General
Notices and Requirements Applying to Standards, Tests, Assays, and
Other Specifications of the United States Pharmacopeia, pp. 1-3,
January 1, 1990.
10. Committee on Dietary Allowances, Food and Nutrition Board,
Assembly of Life Sciences, National Research Council, ``Recommended
Dietary Allowances, 9th revised ed., 1980,'' Washington, DC,
National Academy Press, 1980.
List of Subjects in 21 CFR Part 101
Food labeling, Reporting and recordkeeping requirements,
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
101 is amended as follows:
PART 101--FOOD LABELING
1. The authority citation for 21 CFR part 101 continues to read as
follows:
Authority: Secs. 4, 5, 6 of the Fair Packaging and Labeling Act
(15 U.S.C. 1453, 1454, 1455); secs. 201, 301, 402, 403, 409, 701 of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 331, 342,
343, 348, 371).
2. Section 101.9, effective May 8, 1994, is amended by revising
paragraphs (d)(3)(ii), (h)(2), and (j)(6) to read as follows:
Sec. 101.9 Nutrition labeling of food.
* * * * *
(d) * * *
(3) * * *
(ii) ``Servings Per Container'': The number of servings per
container, except that this statement is not required on single serving
containers as defined in paragraph (b)(6) of this section or on other
food containers when this information is stated in the net quantity of
contents declaration.
* * * * *
(h) * * *
(2) If a product consists of two or more separately packaged foods
that are intended to be eaten individually and that are enclosed in an
outer container (e.g., variety packs of cereals or snack foods), the
nutrition information shall:
(i) Be specified per serving for each food in a location that is
clearly visible to the consumer at the point of purchase; and
(ii) Be presented in separate nutrition labels or in one aggregate
nutrition label with separate columns for the quantitative amount by
weight and the percent Daily Value for each food.
* * * * *
(j) * * *
(6) Dietary supplements of vitamins or minerals that have an RDI as
established in paragraph (c)(8)(iv) of this section or a DRV as
established in paragraph (c)(9) of this section shall be labeled in
compliance with Sec. 101.36, except that dietary supplements of
vitamins or minerals in food in conventional form (e.g., breakfast
cereals), of herbs, and of other similar nutritional substances shall
conform to the labeling of this section.
* * * * *
3. Section 101.12, effective May 8, 1994, is amended in paragraph
(b), Table 2, by alphabetically adding a new entry under the subheading
``Miscellaneous category'' to read as follows:
Sec. 101.12 Reference amounts customarily consumed per eating
occasion.
* * * * *
(b) * * *
Table 2.--Reference Amounts Customarily Consumed Per Eating Occasion: General Food Supply1,2,3,4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product category Reference amount Label statement5
--------------------------------------------------------------------------------------------------------------------------------------------------------
*******
Miscellaneous category:
*******
Dietary supplements not in conventional food
form.......................................... The maximum amount recommended, as appropriate, on the
label for consumption per eating occasion or, in the
absence of recommendations, 1 unit, e.g., tablet,
capsule, packet, teaspoonful, etc. ------ tablet(s), ------ capsule(s), ------
packet(s), ------ tsp(s) (------ g), etc.
*******
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\These values represent the amount (edible portion) of food customarily consumed per eating occasion and were primarily derived from the 1977-1978 and
the 1987-1988 Nationwide Food Consumption Surveys conducted by the U.S. Department of Agriculture.
\2\Unless otherwise noted in the Reference Amount column, the reference amounts are for the ready-to-serve or almost ready-to-serve form of the product
(i.e., heat and serve, brown and serve). If not listed separately, the reference amount for the unprepared form (e.g., dry mixes; concentrates; dough;
batter; dry, fresh, and frozen pasta) is the amount required to make the reference amount of the prepared form. Prepared means prepared for
consumption (e.g., cooked).
\3\Manufacturers are required to convert the reference amount to the label serving size in a household measure most appropriate to their specific
product using the procedures in 21 CFR 101.9(b).
\4\Copies of the list of products for each product category are available from the Office of Food Labeling (HFS-150), Center for Food Safety and Applied
Nutrition, Food and Drug Administration, 200 C St. SW., Washington, DC 20204.
\5\The label statements are meant to provide guidance to manufacturers on the presentation of serving size information on the label, but they are not
required. The term ``piece'' is used as a generic description of a discrete unit. Manufacturers should use the description of a unit that is most
appropriate for the specific product (e.g., sandwich for sandwiches, cookie for cookies, and bar for ice cream bars). The guidance provided is for the
label statement of products in ready-to-serve or almost ready-to-serve form. The guidance does not apply to the products which require further
preparation for consumption (e.g., dry mixes, concentrates) unless specifically stated in the product category, reference amount, or label statement
column that it is for these forms of the product. For products that require further preparation, manufacturers must determine the label statement
following the rules in Sec. 101.9(b) using the reference amount determined according to Sec. 101.12(c).
4. Section 101.36 is added to subpart C to read as follows:
Sec. 101.36 Nutrition labeling of dietary supplements of vitamins and
minerals.
(a) The label of a dietary supplement of a vitamin or mineral that
has a Reference Daily Intake (RDI) as established in
Sec. 101.9(c)(8)(iv) or a Daily Reference Value (DRV) as established in
Sec. 101.9(c)(9), shall bear nutrition labeling in accordance with this
regulation, as illustrated in paragraph (c)(9) of this section, unless
an exemption is provided for the product in paragraph (f) of this
section. Dietary supplements of herbs or other similar nutritional
substances shall bear nutrition labeling in accordance with Sec. 101.9.
(b) The declaration of nutrition information on the label and in
labeling shall contain the following information, using the headings
and format specified, under the heading of ``Nutrition Facts''. The
nutrition information shall be enclosed in a box by use of lines, shall
be all black or one color type, and shall be printed on a white or
other neutral contrasting background whenever practical.
(1) The subheading ``Serving Size'' shall be placed under the
heading and aligned on the left side of the nutrition label. The
serving size shall be determined in accordance with Sec. 101.9(b) and
Sec. 101.12(b), Table 2. Serving size shall be expressed using a term
that is appropriate for the form of the supplement, such as
``tablets,'' ``capsules,'' ``packets,'' or ``teaspoonfuls.''
(2) The subheading ``Servings Per Container'' shall be placed under
the subheading ``Serving Size'' and aligned on the left side of the
nutrition label, except that this information need not be provided when
it is stated in the net quantity of contents declaration.
(3) A listing of all nutrients required in Sec. 101.9(c) that are
present in the dietary supplement in quantitative amounts by weight
that exceed the amount that can be declared as zero in Sec. 101.9(c).
Those nutrients that are not present, or that are present in amounts
that would be declared as zero, shall not be declared. In addition,
potassium, vitamin K, chloride, chromium, fluoride, manganese,
molybdenum, and selenium shall be declared, except when present in
quantitative amounts by weight that allow a declaration of zero. The
name of each nutrient listed shall be immediately followed by the
quantitative amount by weight of the nutrient. Nutrient names and
quantitative amounts shall be presented in a column under the heading
of ``Amount Per Serving'' and aligned on the left side of the nutrition
label. The heading ``Amount Per Serving'' shall be separated from other
information on the label by a bar above and beneath it, except that
when calories are listed, the bar shall be placed beneath the calorie
declaration. When the serving size of the product is one unit (e.g.,
one tablet), a heading consistent with the declaration of the serving
size, such as ``Amount Per Tablet'' or ``Each Tablet Contains,'' may be
used in place of the heading ``Amount Per Serving.'' Other appropriate
terms, such as capsule, packet, or teaspoonful, may be used in place of
the term ``Serving.''
(i) These amounts shall be expressed in the increments specified in
Sec. 101.9(c), except that the amounts of vitamins and minerals,
excluding sodium and potassium, declared on the nutrition label shall
be the actual amount of the vitamin or mineral included in the dietary
supplement, using the units of measure and the levels of significance
given in Sec. 101.9(c). In declaring the amounts of vitamins and
minerals, zeros following decimal points may be dropped, and additional
levels of significance may be used when the number of decimal places
indicated is not sufficient to express lower amounts (e.g., the RDI for
copper is given in whole milligrams (mg), but the quantitative amount
may be declared in tenths of a mg). Amounts for chloride, fluoride, and
manganese shall be expressed in mg, and, amounts for chromium,
molybdenum, selenium, and vitamin K shall be expressed in micrograms.
These values shall be expressed in whole numbers, except that tenths
may be used for fluoride.
(ii) Nutrients that are present shall be listed in the order
specified in Sec. 101.9(c); except that, when present, vitamin K shall
follow vitamin E; calcium and iron shall follow pantothenic acid;
selenium shall follow zinc; and manganese, fluoride, chromium,
molybdenum, chloride, sodium, and potassium shall follow copper. This
results in the following order for vitamins and minerals: Vitamin A,
vitamin C, vitamin D, vitamin E, vitamin K, thiamin, riboflavin,
niacin, vitamin B6, folate, vitamin B12, biotin, pantothenic acid,
calcium, iron, phosphorus, iodine, magnesium, zinc, selenium, copper,
manganese, fluoride, chromium, molybdenum, chloride, sodium, and
potassium. A bar shall separate the last nutrient to be listed from the
bottom of the nutrition label, as shown in the sample labels in
paragraph (c)(9) of this section.
(iii) If the product contains two or more separately packaged
dietary supplements of vitamins and minerals (e.g., the product has a
packet of supplements to be taken in the morning and a different packet
to be taken in the afternoon), the quantitative amounts may be
presented as specified in this paragraph in individual nutrition labels
or in one aggregate nutrition label with separate columns declaring the
quantitative amounts for each package as illustrated in paragraph
(c)(9)(iii) of this section.
(iv) The percent of vitamin A that is present as beta-carotene may
be declared, to the nearest whole percent, immediately adjacent to or
beneath the nutrient name (e.g., ``Vitamin A 5000 IU (90 percent as
beta-carotene)''), except that the declaration is required when a claim
is made about beta-carotene. The amount of beta-carotene in terms of
international units (IU) may be included in parentheses following the
percent statement (e.g., ``Vitamin A 5000 IU (90 percent (4500 IU) as
beta-carotene)'').
(v) The following synonyms may be added in parenthesis immediately
following the name of these nutrients: Vitamin C (ascorbic acid),
thiamin (vitamin B1), riboflavin (vitamin B2), folate (folacin), and
calories (energy). Energy content per serving may be expressed in
kilojoules units, added in parentheses immediately following the
statement of caloric content.
(vi) All nutrients shall be displayed with uniform type size,
style, color, and prominence.
(4) A listing of the percent of the Daily Value (i.e., the percent
of the RDI as established in Sec. 101.9(c)(8)(iv) or DRV as established
in Sec. 101.9(c)(9)), where appropriate, of all nutrients listed in the
nutrition label, except that the percent for protein may be omitted as
provided in Sec. 101.9(c)(7) and no percent shall be given for sugars,
vitamin K, chloride, chromium, fluoride, manganese, molybdenum,
selenium. This information shall be presented in one column aligned
under the heading of``% Daily Value'' and to the right of the column of
nutrient names and amounts. The headings ``% Daily Value (DV),'' ``%
DV,'' ``Percent Daily Value,'' or ``Percent DV'' may be substituted for
``% Daily Value.'' The heading ``% Daily Value'' shall be placed on the
same line as the heading ``Amount Per Serving'' or placed beneath this
heading and the bar underneath it, except that ``% Daily Value'' shall
be placed beneath this bar when calorie information is required to be
declared. Calorie information shall be placed beneath ``Amount Per
Serving'' and above the bar.
(i) The percent of Daily Value shall be calculated by dividing
either the amount declared on the label for each nutrient or the actual
amount of each nutrient (i.e., before rounding) by the RDI or DRV for
the specified nutrient and multiplying by 100, except that the percent
for protein shall be calculated as specified in Sec. 101.9(c)(7)(ii).
The numerical value shall be followed by the symbol for percent (i.e.,
%).
(ii) The percentages based on RDI's and on DRV's shall be expressed
to the nearest whole percent, except that ``Less than 1%'' may be used
in place of ``0%'' when the declaration of the quantitative amount by
weight is a value greater than zero.
(iii) The percent of Daily Value for vitamins and minerals shall be
based on RDI values for adults and children 4 or more years of age
unless the product is represented or purported to be for use by
infants, children less than 4 years of age, pregnant women, or
lactating women, in which case the column heading shall clearly state
the intended group. If the product is for persons within more than one
group, the percent of daily value for each group shall be presented in
separate columns as shown in paragraph (c)(9)(ii) of this section.
(iv) If the product contains two or more separately packaged
dietary supplements of vitamins and minerals (e.g., the product has a
packet of supplements to be taken in the morning and a different packet
to be taken in the afternoon), the percent of Daily Value may be
presented as specified in paragraph (b)(4) of this section in
individual nutrition labels or in one aggregate nutrition label with
separate columns declaring the percent of Daily Value for each package
as illustrated in paragraph (c)(9)(iii) of this section.
(v) If the percent of Daily Value is declared for total fat,
saturated fat, total carbohydrate, dietary fiber, or protein, the value
shall be followed by an asterisk that refers to another asterisk at the
bottom of the nutrition label that states ``Percent Daily Values are
based on a 2,000 calorie diet.''
(vi) When no percent is given for sugars, vitamin K, chloride,
chromium, fluoride, manganese, molybdenum, or selenium, an asterisk
shall be placed in the ``% Daily Value'' column that shall refer to
another asterisk that is placed at the bottom of the nutrition label
that is followed by the statement ``Daily Value not established.''
(c) Nutrition information specified in this section shall be
presented as follows:
(1) The title of ``Nutrition Facts'' shall be set in a type size
larger than all other print size in the nutrition label and, unless
impractical, shall be set full width of the nutrition label. The title
and all headings shall be highlighted (reverse printing is not
permitted as a form of highlighting) to distinguish them from other
information.
(2) All information within the nutrition label shall utilize a
single easy-to-read type style.
(3) All information within the nutrition label shall utilize upper
and lower case letters, except that all uppercase lettering may be
utilized for packages that have a total surface area available to bear
labeling of less than 12 square inches.
(4) All information within the nutrition label shall have at least
one point leading (i.e., space between two lines of text).
(5) Letters should never touch.
(6) All information within the nutrition label on packages that
have a total surface area available to bear labeling of less than 12
square inches shall have type size no smaller than 4.5 point; packages
that have from 12 to 40 square inches of surface area available to bear
labeling shall have type size no smaller than 6 point; and packages
with more than 40 square inches of surface area available to bear
labeling shall have type size no smaller than 8 point, except that on
packages with more than 40 square inches of available surface area,
type size no smaller than 6 point may be used for the listing of
information on beta-carotene, as specified in paragraph (b)(3)(iv) of
this section, for the headings required by paragraphs (b)(3) and (b)(4)
of this section (i.e., ``Amount Per Serving'' and ``% Daily Value''),
and for the footnote required by paragraph (b)(4)(v) of this section.
(7) A hairline rule that is centered between the lines of text
shall separate each nutrient and its corresponding percent Daily Value
required in paragraph (b)(4) of this section from the nutrient and
percent Daily Value above and beneath it, as shown in paragraph (c)(9)
of this section, and shall separate ``Amount Per Serving'' from the
calorie statement, when the listing of calories is required.
(8) In the interest of uniformity of presentation, FDA urges that
the information be presented using the graphic specifications set forth
in Appendix B to Part 101, as applicable.
(9) The following sample labels are presented for the purpose of
illustration:
(i) Multiple vitamin.
TR04JA94.000
(ii) Multiple vitamin for children and adults.
TR04JA94.001
(iii) Multiple vitamins in packets.
TR04JA94.002
(10) If space is not adequate to list the required information as
shown in the sample labels in paragraph (c)(9) of this section, the
list may be split and continued to the right, as long as the headings
are repeated. The list to the right shall be set off by a line that
distinguishes it and sets it apart from the nutrients and percent of
Daily Value information given to the left. The following sample label
illustrates this display:
TR04JA94.003
(d)(1) Compliance with this section shall be determined in
accordance with Sec. 101.9(g)(1) through (g)(8).
(2) When it is not technologically feasible, or some other
circumstance makes it impracticable, for firms to comply with the
requirements of this section, FDA may permit alternative means of
compliance or additional exemptions to deal with the situation in
accordance with Sec. 101.9(g)(9). Firms in need of such special
allowances shall make their request in writing to the Office of Food
Labeling (HFS-150), Food and Drug Administration, 200 C St. SW.,
Washington, DC 20204.
(e) Except as provided in paragraph (g) of this section, the
location of nutrition information on a label shall be in compliance
with Sec. 101.2.
(f)(1) Dietary supplements of vitamins or minerals are exempt from
this section when they are offered for sale by a manufacturer, packer,
or distributor who has annual gross sales made or business done in
sales to consumers that is not more than $500,000 or has annual gross
sales made or business done in sales of food to consumers of not more
than $50,000, Provided, That the food bears no nutrition claims or
other nutrition information on a label or labeling or in advertising.
(2) For purposes of the paragraph, calculation of the amount of
sales shall be based on the most recent 2-year average of business
activity. Where firms have been in business less than 2 years,
reasonable estimates must indicate that annual sales will not exceed
the amounts specified. For foreign firms that ship foods into the
United States, the business activities to be included shall be the
total amount of food sales, as well as other sales to consumers, by the
firm in the United States.
(g) Dietary supplements of vitamins and mineral shall be subject to
the special labeling conditions specified in Sec. 101.9(j)(5)(i) and
(j)(5)(ii) for food, other than infant formula, represented or
purported to be specifically for infants and children less than 2 years
of age and 4 years of age, respectively; in Sec. 101.9(j)(9) for food
products shipped in bulk form that are not for distribution to
consumers; in Sec. 101.9(j)(13) for foods in small or intermediate-
sized packages; in Sec. 101.9(j)(15) for foods in multiunit food
containers; and, in Sec. 101.9(j)(16) for foods sold in bulk
containers.
(h) Dietary supplements of vitamins and minerals shall be subject
to the misbranding provisions of Sec. 101.9(k).
Dated: December 23, 1993.
David A. Kessler,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 93-31813 Filed 12-29-93; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 93-31812 Dietary Supplements; Establishment of Date of Application
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 350-354]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-31812]
[[Page Unknown]]
[Federal Register: January 4, 1994]
_______________________________________________________________________
Part II
Department of Health and Human Services
_______________________________________________________________________
Food and Drug Administration
_______________________________________________________________________
21 CFR Parts 20 and 101
Food Labeling; General Requirements; Final Rules and Proposed Rule
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 101
[Docket No. 93N-0478]
RIN O905-ADO8 and O905-AB68
Dietary Supplements; Establishment of Date of Application
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is publishing this
final rule to establish July 1, 1995, as the date on which it will
apply the mandatory nutrition labeling and nutrient content claims
provisions of the Federal Food, Drug, and Cosmetic Act (the act) to
dietary supplements of vitamins, minerals, herbs, and other similar
nutritional substances (hereinafter referred to as dietary
supplements). This action is in accordance with the Dietary Supplement
Act of 1992 (the DS act) and the Nutrition Labeling and Education Act
of 1990 (the 1990 amendments), which allows the Secretary of Health and
Human Services (the Secretary) (and, by delegation, FDA) to delay, for
up to 1 year, the date on which FDA applies those provisions to foods
(including dietary supplements) if the agency finds that compliance
with them would cause ``undue economic hardship.''
EFFECTIVE DATE: July 1, 1995.
FOR FURTHER INFORMATION CONTACT: Laina M. Bush, Center for Food Safety
and Applied Nutrition (HFS-726), Food and Drug Administration, 200 C
St. SW., Washington, DC 20204, 202-205-5271.
SUPPLEMENTARY INFORMATION:
I. Background
On November 8, 1990, President Bush signed into law the 1990
amendments (Pub. L. 101-535). This statute adds to the Federal Food,
Drug, and Cosmetic Act (the act) among other sections, section 403(q)
(21 U.S.C. 343(q)), which makes nutrition labeling mandatory for most
foods, and section 403(r)(2) (21 U.S.C. 343(r)(2)), which gives FDA
authority to define nutrient content claims.
In accordance with the 1990 amendments, FDA published proposed
rules on November 27, 1991 (56 FR 60366 et seq.), and final rules on
January 6, 1993 (58 FR 2066 et seq.) implementing, among other things,
the sections of the act on mandatory nutrition labeling and nutrient
content claims, among other things, for foods in conventional food
form. Because of the DS act, the final regulations did not include
provisions on the nutrition labeling of, or nutrient content claims
for, dietary supplements.
The DS act (Pub. L. 102-571) was signed into law on October 6,
1992. In section 202(a)(1), the DS act established a moratorium until
December 15, 1993, on the implementation of the 1990 amendments with
respect to dietary supplements that are not in the form of conventional
food. Section 202(a)(2) of the DS act required the Secretary (and, by
delegation, FDA) to issue new proposed regulations that are applicable
to dietary supplements no later than June 15, 1993, and final
regulations by December 31, 1993. On June 18, 1993, FDA issued proposed
regulations in response to this provision of the DS act (58 FR 33700 et
seq.). Elsewhere in this issue of the Federal Register, FDA is issuing
the final rules.
Under section 10(a)(1)(A) and (B) of the 1990 amendments (21 U.S.C.
343 note), section 403(q) and (r)(2) of the act are effective 6 months
after the promulgation of final regulations or after the date that
proposed regulations are considered to be final regulations. Thus,
because the final regulations on the nutrition labeling of, and
nutrient content claims for, dietary supplements are being issued on
January 4, 1994, section 403(q) and 403(r)(2) will be effective with
respect to dietary supplements July 5, 1994. However, section
10(a)(3)(B) of the 1990 amendments provides that if the Secretary and,
by delegation, FDA `` * * * finds that compliance with sections
403(q) and 403(r)(2) of such Act would cause an undue economic
hardship, the Secretary may delay the application of such sections for
no more than one year.''
FDA found such ``undue economic hardship'' existed for the
conventional food industry in a final rule published on January 6, 1993
(58 FR 2070), entitled ``Food Labeling: Establishment of Date of
Application'' (hereinafter called the date of application final rule).
In that document, FDA delayed the application of section 403(q) and
(r)(2) for 1 year, until May 8, 1994.
In the proposed rules on nutrition labeling (58 FR 33715 at 33725)
and nutrient content claims (58 FR 33731 at 33748) for dietary
supplements, FDA asked for comment on whether a similar delay in
application of section 403(q) and (r)(2) would be appropriate for
dietary supplements. The agency gave interested persons until August
17, 1993, to comment on whether the 6-month proposed compliance date
would cause ``undue economic hardship.'' FDA received approximately
2,000 letters of which approximately one-third contain one or more
comments concerning either the date of application or other economic
issues from consumers, consumer advocacy organizations, health care
professionals, professional societies, universities, manufacturers,
distributors, retailers, trade associations, and State governments. A
discussion of the agency's decision, and a summary of the comments,
concerning the delay of the date of application and other economic
issues and the agency responses follow.
II. Undue Economic Hardship
A. Comments
Several comments requested that FDA extend the date that the
nutrition labeling and nutrient content claim provisions of the act
will be applied to dietary supplements. Most comments requested an
additional year, for a total compliance period of 18 months. One
comment proposed a delay of at least 9 months. The comments reported
many examples of the difficulties in meeting a 6-month compliance
period. Several comments stated that the amount of time needed to
redesign labels would far exceed the resources available. One comment
reported that the insufficient time allowed to revise labels would
result in some products being removed from the market temporarily while
new labels are being prepared. An additional comment requested the
extension because of the difficulties in the logistics of revising
existing labels, printing, packaging, and exhausting existing label
supplies with a short compliance period.
Other comments that requested a delay cited the savings that could
be gained with insignificant loss of benefits. One comment reported
that inventory disposal could be reduced by 85 percent with an 18-month
compliance period. Another comment stated that FDA's cost estimate of
$20 million represents 1 percent of industry sales but a much larger
percentage of industry profits. The comment explained that extending
the compliance period would reduce the costs of compliance and,
therefore, minimize any reduction in profits.
One comment requested a delay because there will be additional
costs for compliance with the upcoming United States Pharmacopoeia
(USP) standards. The comment stated that resources could be better
spent if these compliance efforts were completed concurrently rather
than consecutively.
One comment requested a delay because of the overlap with the final
months of the extended period that was allowed for foods in
conventional food form. The comment reported that many conventional
food manufacturers and their label suppliers are rushing to produce
final labels for such foods. The comment said that supplement
manufacturers will not be able to secure revised labels for their
products from label manufacturers in time to meet a 6-month deadline
because of the competition for label manufacturers' resources.
The agency agrees that it will be difficult for dietary supplement
manufacturers to comply within 6 months, especially in light of the
fact that label suppliers are currently stressed with label orders from
manufacturers of food in conventional food form who are attempting to
meet the May 1994 deadline for complying with the 1990 amendments. The
agency also agrees that an extension of the date of application would
result in significant savings for the industry. Administrative costs,
printing costs, and label inventory disposal costs are all dependent on
the length of the compliance period. The agency has determined that the
costs of the regulations could be reduced with an extension.
The agency made a determination in the date of application final
rule that the 1990 amendments will result in an undue economic hardship
on manufacturers of food products in conventional food form (58 FR 2070
at 2075). The agency notes that the costs of compliance for
manufacturers of foods in conventional food form represent less than 1
percent of sales. The costs of compliance with a 6-month compliance
period for dietary supplements is approximately 2 percent of sales.
Therefore, if the agency does not extend the date of application for
dietary supplement manufacturers, that segment of the food industry
will be asked to bear higher relative costs than the agency determined
were reasonable for foods in conventional food form.
For all these reasons, the agency determines that the
congressionally mandated date of application will result in an undue
economic hardship for dietary supplement manufacturers.
B. The Agency's Determination of a Date of Application of Section
403(q) and (r)(2) of the Act as Applied to Dietary Supplements
The agency has determined that undue economic hardship will result
if the dietary supplement industry is required to comply with section
403(q) and (r) of the act within 6 months. As will be shown in the
following discussion on the economic impact, a 6-month delay (total of
12 months to comply) in the application of section 403(q) and (r)(2) to
dietary supplements would result in over 40 percent savings of
compliance cost, and a 12-month delay (total of 18 months to comply)
would result in over 50 percent savings. Given the large disparity in
costs of compliance for manufacturers of dietary supplements if they
are required to comply in 6 months, as compared to those that are being
borne by manufacturers of food in conventional form, FDA finds that it
should tailor the delay to reduce the costs for dietary supplement
manufacturers and thus to minimize the disparity. Therefore, the agency
concludes that it is appropriate to delay the application date for
dietary supplements for 12 months, as it did for foods in conventional
food form. Thus, the agency intends to apply section 403(q) and (r)(2)
to foods labeled after July 1, 1995. The agency fully expects that some
dietary supplement firms will be able to comply before this date once
the pressure on printing labels for foods in conventional food form is
eased after May 8, 1994. Therefore, consumers can expect to begin
enjoying the health benefits of the label changes prior to July 1,
1995.
III. Economic Impact
Some comments agreed with the agency's estimates of the costs of
relabeling. Many comments were directed at issues covered by the
advance notice of proposed rulemaking (ANPRM), which addressed the safe
use of dietary supplements (58 FR 33690, June 18, 1993). Several
comments stated that the three proposals that the agency issued (there
was a proposed rule on health claims (58 FR 33700 in addition to the
proposals on nutrition labeling and nutrient content claims)) and the
ANPRM should be considered one proposal. These comments stated that the
economic impact of the four documents would exceed $100 million and
would be considered a major rule under Executive Order 12291.
The agency disagrees. Executive Order 12291 did not apply to
advance notices. Therefore, no analysis of that document was required
by that Executive Order. (FDA has not taken any action with respect to
the ANPRM that would make it subject to Executive Order 12866). The
three proposals are concerned with the labeling of dietary supplements,
while the ANPRM is concerned with other issues. Thus, the costs and
benefits associated with regulatory alternatives described in the ANPRM
can be separated from those resulting from the three proposals on
labeling actions. The agency has evaluated the labeling actions
together, however, because it is not possible to separate the impacts
of the various labeling actions. Finally, FDA is taking no further
action with respect to the ANPRM at this time.
A. Scope
1. Several comments objected to the agency's estimate of the number
of products that will be affected by the nutrition labeling and
nutrient content claims rulemakings. Two comments stated that there are
25,000 products that are potentially affected by the rules, rather than
the agency's estimate of 5,000 products. Another comment stated that
there are approximately 25,000 herbal products alone that would be
required to be tested and relabeled. Another comment objected to the
agency's estimate because the agency failed to include amino acids,
herbal products, and other dietary supplements that have no
recognizable food function.
In its analysis of the proposals, FDA stated that there could be as
many as 25,000 products that could be considered to be dietary
supplements. The agency reduced that number to 5,000, an estimate of
the number of vitamin and mineral supplement products, because: (1)
Many products that contain herbs or other similar nutritional
substances would not be subject to the nutrition label requirements
because they do not contain the nutrients that must be declared, and
(2) some products marketed as dietary supplements would be unaffected
by the 1990 amendments because they bear drug claims that make them
subject to the drug provisions of the act. For these reasons, it is
clear that not all 25,000 products would be required to be tested or
relabeled in response to the regulations implementing the 1990
amendments.
However, FDA is convinced by the comments that some herbal products
and other dietary supplements might need to be tested and relabeled as
a result of these regulations. FDA is unable to determine exactly how
many of those products would be covered by the food provisions of the
act rather than by the drug provisions. Therefore, the agency's final
analysis of the rules is based on a range of products between 5,000 and
25,000.
2. Several comments objected to the agency's estimate that
approximately 150 firms will be affected by the regulations. Some
comments stated that approximately 500 firms would be affected by the
proposed rules if made final. Another comment stated that 250 herb
manufacturers and 150 manufacturers of dietary supplements of vitamins
and minerals would be affected. Another comment objected to the
agency's source for the number of firms. The comment explained that
Dunn and Bradstreet's Electronic Yellow Pages is primarily a listing
for public companies, and the majority of supplement manufacturers are
privately-held corporations. The comment suggested that conservative
estimates suggest that there are a minimum of 150 herb companies alone.
The agency has confirmed that the Electronic Yellow Pages covers
both public and private organizations of all types and sizes. The
agency admits that the Electronic Yellow Pages is not a perfect source
for the number of firms, but FDA believes that it is not entirely
inadequate. The major difference between the agency's estimate and
those of the comments is the inclusion or exclusion of manufacturers
herbal products and products containing other similar nutritional
substances. As stated in the response to the previous comment, the
agency has determined that at least some of these types of dietary
supplement products may be subject to the nutrition labeling
provisions. However, because many of these products do not contain
significant amounts of nutrients, many manufacturers will not be faced
with the necessity of relabeling their products. For these reasons, the
agency believes that its estimate of the number of firms may be low,
but that to include all herbal products manufacturers and manufacturers
of other similar nutritional substances would inflate the estimate.
However, the agency has no basis on which to arrive at the actual
number of firms. Therefore, in its final analysis, the agency is
estimating the total number of firms affected to be between 150 and
300.
B. Costs
3. Several comments disagreed with the agency's estimate of
administrative costs. The comments stated that actual administrative
expenses would be at least $1,000 per label. Administrative expenses,
according to the comments, are associated with the creation or
redesign, proofreading, legal review, pricing, bid review, and
retraining of customer service and sales staff. One comment estimates
that administrative costs to one firm would be 80 to 120 hours of
executive time, or approximately $2,500 to $3,750.
FDA recognizes that the factors that determine administrative costs
are very complicated. The agency's estimates of administrative costs
are based on a compliance cost model for food labeling created for FDA
by Research Triangle Institute (RTI) (Ref. 1). According to RTI, many
firms estimate that administrative effort would be twice as high for a
6-month compliance period as for a 12-month compliance period. In the
dietary supplement proposals, FDA estimated that for a 6-month
compliance period, manufacturers of dietary supplements will incur
administrative costs of $850 per firm. The range of administrative cost
estimates submitted in the comments was broad and there were no
identifiable patterns to the estimates given. Although FDA acknowledges
that its assumptions may have resulted in underestimates, the comments
did not provide enough detailed information to permit FDA to evaluate
the administrative cost estimates that they submitted. Therefore, the
agency is not altering its original estimates based on these comments.
The agency has determined that total administrative costs for a 6-
month compliance period are between $130,000 and $250,000, depending on
the exact number of firms affected by the regulations. As determined by
the contractor's study (Ref. 1), administrative costs are lower with
longer compliance periods. A 1-year compliance period results in
administrative costs of between $65,000 and $125,000. An 18-month
compliance period results in administrative costs of between $50,000
and $94,000.
4. One comment stated that the requirement that herbal dietary
supplements be required to bear nutrition labeling would mandate that
all herbal products be assayed for their nutrient content. The comment
further explained that testing for 12 nutrients would cost $588 per
product for a total of $15 million for 25,000 products.
The agency agrees that to the extent that herbal product
manufacturers will provide nutrition labeling, herbal products will
need to be assayed for their nutrient content. The agency notes,
however, that many herbs do not contain significant amounts of the
nutrients that must be listed in the nutrition label, and that this
fact is determinable from reference works without testing. Thus, these
herbs will not need to be tested. Many comments admitted that, in
general, herbal products do not contain significant amounts of
nutrients and are not consumed for their nutrient content. However,
some herbal products and combination products will require nutrient
testing.
In the proposals, the agency assumed that dietary supplements of
vitamins and minerals will not undergo any additional testing as a
result of the nutrition labeling requirements. Comments did not object
to this assumption.Therefore, in its final analysis, the agency is
estimating that as many as 20,000 products may undergo testing once
every 5 years for a total discounted analytical cost over the next 20
years of $33 million (7 percent discount rate).
5. One comment agreed, and several comments disagreed, with the
agency's estimate of label printing and redesign costs. The comments
that disagreed stated that printing and redesign costs would be at
least $800 to $1,200 per label. One comment stated that the cost of
redesigning and printing each label would be 2 hours of desktop
redesign, $20 for linotronic service, and $600 for new plates, for a
total of $750 per label.
One comment objected to FDA's assumption that label revisions for
supplements are less comprehensive than revisions for foods in
conventional food form. The comment states that incorporating the
``Nutrition Facts'' section plus the ingredient list will necessitate
complete redistribution of information on many labels.
In the analysis of the proposed rules, the agency estimated that,
for a 6-month compliance period, printing and redesign costs would be
approximately $1,000 per label. The comments do not suggest that the
agency's estimate is incorrect. Therefore, the agency's final analysis
of printing costs is based on a per label cost of $1,000 for each of
between 15,000 and 75,000 labels, or between $15 million and $75
million. According to the RTI study, the length of the compliance
period determines a firm's ability to combine planned label changes
with mandated changes. Therefore, incremental labeling and redesign
activities are less costly with lengthier compliance periods. If the
agency extended the compliance period by only 6 months, printing and
redesign costs would be between $7.5 million and $37.5 million. The 1-
year extension that the agency is providing will reduce printing and
redesign costs to between $6 million and $28 million.
6. Several comments provided data on label inventories that would
be subject to disposal. These comments stated that a 4- to 6-month
supply of product labels is common, resulting in $3.4 million to $5.1
million of label inventory that will be discarded. Another comment
suggested that its dietary supplement label and box inventory disposal
costs would be $325,000 with a 6-month compliance period, $200,000 with
a 1-year compliance period, and $50,000 with an 18-month compliance
period. One comment estimated the cost of discarding noncompliant
labels would be approximately $30,000 for one firm.
The estimates provided by the comments are in line with the
agency's preliminary estimate of label inventory disposal costs.
Therefore, the agency is not changing its estimate based on the
comments. The cost of label inventory disposal for a 6-month compliance
period is between $5 million and $25 million, depending on the number
of products affected. According to the RTI study and comments,
lengthier compliance periods allow firms to use up more existing label
supplies, thus reducing inventory disposal costs. According to data
submitted in response to the Regulatory Impact Analysis document that
was published in the Federal Register of November 27, 1991 (56 FR
60366), and adjusted to reflect the range of products affected, if the
agency had extended the compliance period for an additional 6 months,
inventory disposal costs would be between $3 million and $13 million.
The 18-month compliance period that the agency is providing will result
in costs of between $2 million and $9 million.
7. Several comments disagreed with the agency's estimate of the
cost of inventory disposal. The comments argued that firms would
dispose of finished product in addition to labels. The comments stated
that typical product costs for dietary supplements would result in an
inventory value for the disposal of 5,000 products of between $48
million and $73 million. One firm estimated its own cost of discarding
noncompliant inventory would be approximately 30 percent of finished
goods inventory, or about $45,000.
Because these proposals cover only the labeling of dietary
supplements, the agency does not agree that there would be any reason
for firms to dispose of any product inventory. Nor did the comments
provide an explanation as to why it would be necessary to do so.
Moreover, any product packaged and labeled in accordance with law
before the date that FDA begins to apply the section 403(q) and (r) of
the act will not need to be relabeled. Therefore, the agency is not
changing its estimate based on this comment.
8. Several comments argued that the agency failed to consider the
cost of discarding and redesigning catalogs, product literature, and
advertising. The comments suggested that these costs would be at least
$40,000 per firm, or $20 million for all firms.
The comments did not provide an explanation as to why it would be
necessary to discard and redesign catalogs and product literature. The
agency does agree that, to the extent that these materials are
labeling, they must comply with the nutrient content and health claims
provisions of the act.
However, the agency believes that many of the claims made in these
types of materials are drug claims or structure-function claims, not
health claims, and therefore are not subject to these rules. The
comments did not present evidence to support a different finding.
Consequently, the agency has no basis on which to conclude that
extensive catalog and product literature redesign will be required by
these final rules. Therefore, the agency is not changing its estimate
based on these comments.
9. Several comments argued that the agency failed to consider the
cost of relabeling of product returned from the retailer. The comments
stated that it is common practice in the supplement industry to accept
returns from retailers in the event of a label change. Industry firms
would be faced with a number of products returned from retailers
unwilling to carry products with older labels. The comments estimated
the cost of processing returns, disposing of product, and applying for
full credit at $48 million.
Any product labeled before the applicability date will not need to
comply with the new nutrition labeling and nutrient content claim
provisions. Therefore, no product that is labeled in accordance with
law before July 1, 1995, need be returned, relabeled, or destroyed as a
result of these new provisions. However, FDA agrees that to the extent
that product is returned, the cost of disposing of product returned
from retailers because of ``old'' labeling should be considered a cost
of these regulations. However, the agency is unpersuaded of the
magnitude of the cost and is unsure of the extent to which ``old''
product will be returned. The comments provided insufficient
information with which the agency could estimate these costs.
Therefore, the agency is not changing its estimates based on this
comment.
10. Several comments expressed concern that the rules may cause the
loss of many thousands of jobs, the closing of many firms, and the loss
of products from the marketplace. According to one comment, the
proposed rules would cause the loss of more than $10 million in sales
and as many as 100 jobs in one company. Another comment stated a belief
that 2 million Americans will lose their jobs as a result of the
regulations. The comments did not provide any specific information as
to how the regulations would cause the loss of jobs and products.
The agency agrees that the inability to make certain nutrient
content or health claims may reduce the marketability of certain
products and perhaps lead to a company's decision to remove a product
from the marketplace. However, these rules affect only labeling; they
do not require any supplement to be removed from the market. Moreover,
the agency does not believe that many products are currently making
health claims, as distinguished from drug claims or structure-function
claims. Therefore, the agency has no basis to find that these
regulations will cause the problems described in these comments. The
agency believes that there is every reason to expect that the continued
marketing of the vast majority of dietary supplement products will be
unaffected by these regulations.
11. In the analysis of the proposed rules, the agency recognized
that the rules could have an adverse impact on small businesses. Most
of the costs associated with labeling regulations are fixed costs,
which are typically more burdensome for small firms than for large
firms because of the smaller sales base on which to spread costs.
One comment stated that the small business exemption was inadequate
because small firms would not be able to avoid complying with the
regulations because of competitive pressure. Another comment stated
that the proposals would be catastrophic to small business owners and
workers.
FDA notes that the Nutrition Labeling and Education Act Amendments
of 1993, which were enacted on August 13, 1993, provide relief for
small businesses from the requirements of section 403(q) of the act.
The agency believes that the new exemption for small businesses will
significantly mitigate any negative impact on small firms.
12. One comment stated that the proposed rule regarding health
claims will cause pain, suffering, and death that would not occur were
labeling and advertising allowed to include health claims. The comment
was unspecific as to why these results would occur.
If the absence of health claims causes pain, suffering, or death,
these regulations provide any party with a vehicle for submitting data
to support a particular health claim for agency review. Therefore, the
agency does not agree with this comment.
C. Benefits
13. One comment stated that the regulations will provide benefits
by preventing consumers from wasting money on unnecessary and
ineffective dietary supplements. Another comment stated that if someone
wanted to waste a little money taking too many vitamins or supplements
in the hope of avoiding serious illness and the need for harsh drugs,
they should be allowed to do so.
Because there are sources other than labeling that provide
information about the potential uses of dietary supplements, the agency
believes that limiting the use of claims on labels or labeling will be
of limited effect in preventing consumers from purchasing supplements
that they erroneously believe will prevent serious illness. However,
these regulations will ensure that the labels of dietary supplements
will provide full nutrition labeling to help consumers to maintain
healthy dietary practices, and they will help to ensure that any
nutrient content or health claims made in the labeling of these
products are scientifically valid, truthful, and not misleading. For
these reasons, these regulations will provide a significant benefit.
14. Some comments stated that the cost of providing nutrition
information on the labels of dietary supplements of herbs would greatly
outweigh any clear public benefit. The comments explained that herbs do
not contain significant amounts of the core nutrients and are not
normally consumed for their nutritional value. Therefore, the value to
consumers of including nutrition labeling on herb products is
insignificant.
The agency agrees with this comment. However, the agency notes that
those products that do not contain significant amounts of the 14
mandatory nutrients will generally not be required to bear nutrition
labeling. Therefore, although there will be no clear public benefit,
there will also be no cost.
D. Summary of the Economic Impact
FDA has examined the economic implications of the final rules
amending on nutrition labeling, nutrient content claims, and health
claims for dietary supplements as required by Executive Order 12866 and
the Regulatory Flexibility Act (Pub. L. 96-354). 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 effects; distributive
impacts; and equity). The Regulatory Flexibility Act requires analyzing
options for regulatory relief for small businesses. FDA finds that
these final rules on dietary supplements, taken together, are not
significant as defined by Executive Order 12866. In accordance with the
Regulatory Flexibility Act, the agency certifies that the final rules
will not have a significant impact on a substantial number of small
businesses.
The agency has reviewed the comments and has determined that the
costs of compliance associated with the 18-month compliance period
provided by the agency include administrative costs of between $50,000
and $100,000, analytical costs of between $0 and $33 million, printing
and redesign costs of between $6 and $28 million, and label inventory
disposal costs of between $2 and $9 million. Total discounted costs of
the final regulations, taken together are between $8 and $60 million (7
percent discount rate). If the agency did not extend the application of
the rules, total discounted costs would be between $20 and $133 million
for a 6-month compliance period, or between $11 and $84 million for a
1-year compliance period.
IV. Environmental Impact
The agency has determined under 21 CFR 25.24 (a)(11) that this
action is of a type that does not individually or cumulatively have a
significant impact on the human environment. Therefore, neither an
environmental impact statement is required.
V. Reference
The following reference has been placed on display in the Dockets
Management Branch (address above) and may be seen by interested persons
between 9 a.m. and 4 p.m., Monday through Friday.
1. RTI, ``Compliance Costs of Food Labeling Regulations,'' FDA
Contract No. 223-87-2097, Project Officer--Richard A. Williams, Jr.,
Research Triangle Park, NC, December 1990.
VI. Conclusion
For the reasons stated above, FDA hereby establishes July 1, 1995,
as the date on which it will apply the mandatory nutrition labeling and
nutrient content claims provisions of the act to dietary supplements.
Dated: December 23, 1993.
David A. Kessler,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 93-31812 Filed 12-29-93; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 93-31089 Endangered and Threatened Species; Status of Sacramento River Winter- run Chinook Salmon
[Federal Register Volume 59, Number 2 (Tuesday, January 4, 1994)]
[Rules and Regulations]
[Pages 440-450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-31089]
[[Page Unknown]]
[Federal Register: January 4, 1994]
_______________________________________________________________________
Part III
Department of Commerce
_______________________________________________________________________
National Oceanic and Atmospheric Administration
_______________________________________________________________________
50 CFR Parts 222 and 227
Endangered and Threatened Species; Status of Sacramento River Winter-
run Chinook Salmon; Final Rule
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Parts 222 and 227
[Docket No. 930779-3330; I.D. 051192B]
Endangered and Threatened Species; Status of Sacramento River
Winter-run Chinook Salmon
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: NMFS has determined that the Sacramento River winter-run
chinook salmon should be reclassified from threatened to endangered
under the Endangered Species Act of 1973 (ESA). NMFS has determined
that the current biological status of the species is endangered based
on the continued decline and increased variability of run sizes since
its first listing as a threatened species in 1989, the expectation of
weak returns in certain years as the result of two small year classes
(1991 and 1993), and continuing threats to the population. Although
measures implemented through consultations conducted under section 7 of
the ESA and State and Federal regulatory actions are designed to reduce
adverse impacts on the species, quantifiable improvements in population
levels are not likely to be evident for several years. NMFS will
continue to closely monitor the status of this population, and evaluate
the protective measures to determine whether there is evidence that
these measures have reduced or eliminated threats to the species and
whether a change in status may be warranted.
EFFECTIVE DATES: February 3, 1994.
FOR FURTHER INFORMATION CONTACT: James H. Lecky, NMFS, Southwest
Region, Protected Species Management Division, 501 W. Ocean Blvd.,
suite 4200, Long Beach, CA, 90802-4213, (310) 980-4015, or Margaret
Lorenz, NMFS, Office of Protected Resources, 1335 East-West Highway,
Silver Spring, MD 20910, (301) 713-2322.
SUPPLEMENTARY INFORMATION:
Background
Under the ESA and its implementing regulations (50 CFR part 424),
an ``endangered species'' is any species that is in danger of
extinction throughout all or a significant portion of its range. A
``threatened species'' is any species that is likely to become an
endangered species within the foreseeable future throughout all or a
significant portion of its range. Based on a review of the status of
the Sacramento River winter-run chinook salmon and the factors
affecting the species, NMFS has determined that it is endangered.
The Sacramento River winter-run chinook salmon is a unique
population that is distinguishable from other chinook salmon runs in
the Sacramento River based on the timing of its upstream migration and
spawning period. For the most part, the winter-run chinook salmon
population is comprised of three year classes, each of which primarily
returns to spawn as 3-year old fish.
The best available data on winter-run chinook salmon abundance are
the annual estimates of the spawning run size made by the California
Department of Fish and Game (CDFG) based on counts of fish passing the
Red Bluff Diversion Dam. The CDFG began estimating the annual run size
for winter-run chinook salmon in 1967 after the Dam was placed in
operation. This time series of annual run size estimates has documented
a precipitous decline in the winter-run chinook salmon to its present
low level (Table 1).
Table 1.--Annual Estimated Run Size at Red Bluff Diversion Dam
------------------------------------------------------------------------
Year Number of Fish
------------------------------------------------------------------------
1967.................................................... 57,306
1968.................................................... 84,414
1969.................................................... 117,808
1970.................................................... 40,409
1971.................................................... 53,089
1972.................................................... 37,133
1973.................................................... 24,079
1974.................................................... 21,897
1975.................................................... 23,430
1976.................................................... 35,096
1977.................................................... 17,214
1978.................................................... 24,862
1979.................................................... 2,364
1980.................................................... 1,156
1981.................................................... 20,041
1982.................................................... 1,242
1983.................................................... 1,831
1984.................................................... 2,663
1985.................................................... 3,962
1986.................................................... 2,422
1987.................................................... 2,236
1988.................................................... 2,085
1989.................................................... 547
1990.................................................... 441
1991.................................................... 191
1992.................................................... 1,180
1993.................................................... 341
------------------------------------------------------------------------
In 1989, the CDFG estimated that the winter-run chinook salmon run
size was only 547 fish. This unexpectedly small return represented
nearly a 75 percent decline from the consistent, but low, run size of
2,000 to 3,000 fish that had occurred since 1982. As a result of this
unexpected decline, NMFS issued an emergency interim rule listing the
winter-run chinook salmon as threatened under the ESA on August 4, 1989
(54 FR 32085). During the period the emergency interim rule was in
effect, NMFS published a proposed rule to list winter-run chinook
salmon as threatened under the formal listing procedures of the ESA on
March 20, 1990 (55 FR 10260). To avoid a hiatus in protection of the
species until the formal listing process was completed, NMFS published
a second emergency interim rule listing winter-run chinook salmon as
threatened on April 2, 1990 (55 FR 12191). On November 5, 1990, NMFS
completed the formal listing process and published a final rule (55 FR
46515) listing the species as threatened under the ESA.
On June 5, 1991, the American Fisheries Society petitioned NMFS to
reclassify winter-run chinook salmon as an endangered species. At the
time the petition was submitted, the best preliminary data available
indicated that the 1991 run would consist of a return of only 88 to 200
adults from the progeny of the 1988 run of 2,085 fish. The final run
size estimate made by the CDFG for 1991 was 191 fish (Table 1). NMFS
reviewed the petition and determined that it contained substantial
information indicating that the petitioned action might be warranted.
On November 7, 1991, NMFS announced (56 FR 58986) its intention to
review the status of the species to determine whether reclassification
was appropriate. After conducting a status review, NMFS published a
proposed rule (57 FR 27416) on June 19, 1992, to reclassify winter-run
chinook salmon as endangered.
NMFS published a subsequent Federal Register notice (58 FR 31688)
on June 4, 1993, delaying the issuance of a final determination on the
reclassification for up to six months pursuant to section 4(b)(6)(B) of
the ESA. On September 10, 1993, NMFS published another Federal Register
notice that provided information on the 1993 run size estimate (341
fish) and reopened the public comment period on the proposed rule.
This determination does not change any of the prohibitions against
taking Sacramento River winter-run chinook salmon. Section 9 of the ESA
prohibits taking endangered species. The regulations issued when this
species was listed as threatened in November 1990 also prohibit taking.
In a separate rulemaking, the U.S. Fish and Wildlife Service (FWS),
which is responsible for the List of Endangered and Threatened
Wildlife, will revise the list to reflect the reclassification of this
species from threatened to endangered.
Current Status
Conservation measures were implemented by the Bureau of Reclamation
(Bureau) beginning in 1986-1987 in an effort to improve adult passage
conditions for winter-run chinook salmon at Red Bluff Diversion Dam and
to provide suitable spawning and egg incubation conditions for the
species in the upper Sacramento River below Keswick Dam. Despite the
implementation of measures in 1986-1987 and 1987-1988, the winter-run
chinook salmon run size declined to 441 fish in 1990 and to 191 fish in
1991. The estimated 1991 run size of 191 fish was primarily the result
of surviving progeny from the 1988 spawning population of 2,085 fish.
Thus, the 1991 spawning escapement represented nearly a 90 percent
decline in a single generation, and suggested that the 1988 year class
was nearly a total failure (57 FR 27416).
In 1992, the CDFG estimated that the winter-run chinook salmon run
size increased to 1,180 fish. This run size was substantially higher
than the runs estimated in 1989 (547 fish), 1990 (441 fish), and 1991
(191 fish), and it represented more than a 100 percent increase in the
spawning population in a single successive generation since the 1992
run was comprised primarily of the surviving progeny from the 1989 run.
In 1989, the Bureau implemented conservation measures to manage upper
Sacramento River water temperatures and provide improved fish passage
at the Red Bluff. As a result of these actions, temperature conditions
were much improved with favorable water temperatures occurring from
Keswick Dam to Bend Bridge (44 miles downstream) during almost the
entire spawning and egg incubation period. Spawning ground surveys in
1989 also indicated that nearly 100 percent of the estimated run
spawned in this 44-mile river reach where water temperature was
favorable. As a result of these factors, temperature-related mortality
was minimal in 1989. The substantial increase in the 1992 run size
suggests that the measures implemented to protect winter-run chinook
salmon in 1989 were effective, and that similar or more protective
measures may be successful in the future.
In 1993, the CDFG estimated the winter-run chinook salmon run size
to be 341 fish. This represented nearly a 30 percent decline of the run
size in one generation. NMFS had anticipated that the run size would
likely decline in 1993 because the 1990 spawning population (441 fish)
experienced less favorable water temperature conditions during spawning
and egg incubation, and more of the run spawned downstream from the
river reach where temperatures could be suitably managed by the Bureau.
In 1990, as a result of continued drought conditions and high ambient
temperatures, favorable water temperatures for spawning and egg
incubation were present only from Keswick Dam to the Balls Ferry Bridge
(26 miles downstream) during a portion of the egg incubation period. In
addition, spawning distribution surveys indicated that nearly 10
percent of the run spawned downstream from Balls Ferry where
temperatures were not favorable. Therefore, temperature-related
mortality was substantially higher in 1990 than in 1989. In addition to
less favorable temperature conditions, it is possible that conditions
for outmigrants were less than favorable, and that ocean survival of
the 1990 year class was reduced by the El Nino event that began in
1991-92.
Since the winter-run chinook salmon was formally listed as
threatened in November 1990 (55 FR 46515), the species run size has
continued to decline, with the exception of 1992, and exhibit
considerable variability (Table 1). Although some protective measures
were implemented beginning in 1987, this decline was exacerbated by the
6-year drought in California (1987-1992). Based on the run size
estimates for the last 3 years (1991-1993), the population now has two
weak year classes (1991 and 1993). NMFS expects that the 1994 run will
also be weak because of the weak 1991 year class (191 fish) and the
less than favorable conditions for spawning, egg incubation, and
juvenile outmigration that occurred in 1991-92. Because of the small
run in 1991 and the weak return expected in 1994, this year class is
likely to remain weakened for some time.
As part of the status review, extinction probabilities were
estimated for the winter-run chinook salmon population using
modifications of the model described by Dennis, Munholland, and Scott
(1991), and the 3-year geometric moving average of the annual estimated
run size for the periods of 1967-1993 and 1979 1993, respectively.
Results of the analysis indicate that if past trends continue, the
population faces a high probability of dropping below 100 spawners per
year at least once over the next 10 years, and to even lower levels
over the 50 and 100 year time horizons.
The extinction modeling results suggest that the risk of the
winter-run chinook salmon population dropping to unacceptably low
levels is high. However, this type of analysis is based only on
historical trends in the population (1967-1993) and assumes that past
conditions will continue in the future. Although the 1994 run is
expected to be weak, NMFS believes that conditions for winter-run
chinook salmon were substantially improved in 1992 and 1993 because of
long-term protective measures implemented to reduce impacts of Central
Valley and State Water Project operations and improve conditions for
successful egg incubation, rearing, and outmigration, and the end of
the drought. In addition to these protective measures, the FWS has been
supplementing the natural production of juveniles with substantial
numbers of hatchery produced fish. If these protective measures and
supplementation efforts prove to be effective, run sizes in 1995 and
1996 will likely increase. For these reasons, the probability of the
population declining to low levels is probably less than suggested by
the extinction modeling analysis. However, because the effectiveness of
these recently implemented protective measures and supplementation
efforts is unknown and cannot be assessed until future runs return,
there remains substantial risk that the population is in danger of
extinction.
Summary of Comments
The World Wildlife Fund supported the reclassification and also
encouraged NMFS to develop and implement a recovery plan for the
conservation of Sacramento River winter-run chinook salmon. The
Department of the Interior (Interior) also supported the
reclassification of winter-run chinook salmon, and said the population
remained at depressed levels and may be in danger of extinction after
the next two runs. However, Interior noted that the 1989 year class
survived particularly well and that the resulting 1992 run size of
1,180 adults represented more than a 100 percent increase in size in a
single successive generation. Interior also acknowledged that the 1992
increase in run size may indicate that measures taken to protect the
population in recent years may be effective. Interior also provided
technical comments to clarify and update facts contained in the
proposed rule.
The Westlands Water District, the Family Water Alliance, and the
Glenn County Board of Supervisors all opposed reclassifying winter-run
chinook salmon because of protective measures that have been recently
implemented. They said that the threatened status should be retained
until the effectiveness of these measures has been assessed.
Response to Comments
NMFS agrees with the World Wildlife Fund that development and
implementation of a recovery plan is essential for the conservation and
recovery of winter-run chinook salmon. For this reason, NMFS has
appointed a National Sacramento River winter-run chinook salmon
recovery team, comprised of fishery resource mangers, experts on
winter-run chinook salmon biology, and conservation biology
specialists, to develop a recovery plan. The recovery team has been
meeting since September 1992 and will submit a draft recovery plan to
NMFS in 1994. Interior's technical comments were incorporated where
appropriate.
NMFS disagrees with the comments of the Westlands Water District,
the Family Water Alliance, and the Glenn County Board of Supervisors
that current protective measures should be allowed to be in place for a
certain amount of time and their effectiveness evaluated before NMFS
determines whether reclassification is necessary. Although measures
have been implemented to reduce adverse impacts on winter-run chinook
salmon, and NMFS believes they are likely to be effective, their
effectiveness is currently unknown and cannot be evaluated until data
on future returns are available.
One of the factors to be considered in listing, delisting and
reclassifying a species is ``the inadequacy of existing regulatory
mechanisms.'' Judicial interpretation of this language allows NMFS to
also consider the ``adequacy'' of regulatory mechanisms in its listing
decisions. It is premature to determine the adequacy of these measures
for purposes of this reclassification. Most measures will not
demonstrate positive results until the 1996 return of adult winter-run
chinook salmon. NMFS must determine whether reclassification is
justified on the basis of the current status of the population and the
factors affecting its continued existence.
Summary of Factors Affecting the Species
Section 4(a)(1) of the ESA specifies five criteria to be evaluated
in reviewing the status of a species or population proposed for listing
or reclassification. The following discussion is in addition to the
evaluation of these factors in the proposed rulemaking to reclassify
winter-run chinook salmon as an endangered species (57 FR 27416, June
19, 1992), the first Notice of Determination (52 FR 6041, February 27,
1987), a subsequent Notice of Determination (53 FR 49722, December 19,
1987), two emergency rules (54 FR 32088, August 4, 1989 and 55 FR
12193, April 2, 1990), the proposed rule to list winter-run chinook
salmon as threatened (55 FR 10260, March 20, 1990), and the final rule
listing the species as threatened (55 FR 46515, November 5, 1990).
1. The Present or Threatened Destruction, Modification, or Curtailment
of its Habitat or Range
Modification and loss of spawning and rearing habitat have been
major factors contributing to the decline of the winter-run chinook
salmon.
Shasta and Keswick Dams
On February 12, 1993, NMFS issued a biological opinion and
incidental take statement to the Bureau of Reclamation which concluded
that long-term operations of the Federal Central Valley Project and the
State Water Project would jeopardize the continued existence of winter-
run chinook salmon. The opinion identifies a reasonable and prudent
alternative with measures designed to protect winter-run chinook salmon
from the long-term operations of Shasta and Keswick Dams, as well as
other facilities of the Central Valley Project. Implementation of these
measures is expected to substantially improve water temperature and
flow conditions in the upper Sacramento River for winter-run chinook
salmon spawning, incubation, and rearing. The specific measures
contained in the reasonable and prudent alternative that relate to
Shasta and Keswick Dams require the Bureau to (1) use a more
conservative forecasting approach to determine the annual allocation of
deliverable water stored in Shasta Reservoir, (2) maintain a minimum
end-of-water-year carryover storage in Shasta Reservoir (1.9 million
acre-feet) for most water year types, (3) maintain daily average water
temperatures in the winter-run chinook salmon spawning grounds below
Keswick Dam at no more than 56 degrees Fahrenheit from April 15 through
August 31 and at no more than 60 degrees Fahrenheit from October 1
through October 31, (4) maintain a minimum flow of 3,250 cubic feet per
second (cfs) from Keswick Dam from October 1 through March 31, and (5)
reduce releases from Keswick Dam according to specific criteria from
July 1 through March 31. The reasonable and prudent alternative
identified specific temperature control points in the upper Sacramento
River for various operating scenarios based on the water year type and
reservoir storage conditions at the start of the water year.
Based on forecasted water supplies and reservoir storage conditions
in February and March 1993, the Bureau met the reasonable and prudent
alternative requirement to maintain water temperatures at or below 56
degrees Fahrenheit throughout the entire winter-run chinook salmon
spawning and incubation season from Keswick Dam to Bend Bridge. The
CDFG conducted numerous aerial surveys of redd (nests) counts during
the winter-run chinook spawning period and observed an unusually large
number of redds (in proportion to the estimated run size) due to
excellent viewing conditions in the river. Based on these surveys,
virtually all redds were observed in the vicinity of Redding well
upstream from Ball's Ferry. Two redds were observed between Ball's
Ferry and the Bend Bridge temperature control point, and only a single
redd was observed below Bend Bridge (immediately downstream from the
Red Bluff Diversion Dam). As a result of the temperature control
maintained by the Bureau and the distribution of spawners in the river,
the incremental impact of temperature on winter-run chinook salmon egg
and juvenile survival was minimal in 1993. In addition to providing
temperature control during the 1993 spawning, incubation, and rearing
season, the Bureau's operations in 1993 resulted in an end-of-water-
year Shasta Reservoir storage (in excess of 3.0 million acre-feet) that
far exceeded the requirements of the reasonable and prudent
alternative.
The incidental take statement issued with the February 1993, long-
term CVP biological opinion also contains specific measures that must
be implemented to minimize the effects of Shasta and Keswick Dam
operations on winter-run chinook salmon incidental take. These measures
include (1) the continuation and expansion of temperature monitoring in
the upper Sacramento River to ensure compliance with the temperature
criteria, (2) NMFS review of the Bureau's proposed water allocation
plans before delivery commitments are made each year to determine their
potential effects on upper river water temperatures, and (3) monitoring
in the upper river when Keswick Dam releases are reduced to prevent the
stranding of juvenile winter-run chinook salmon. These measures were
implemented by the Bureau as required by the incidental take statement.
Spawning habitat utilized by winter-run chinook salmon in the
Sacramento River has also been degraded by decreases in the rate of
replenishment for gravel suitable for spawning (NMFS 1992c). In 1990,
the California Department of Water Resources placed 100,000 cubic yards
of spawning gravel in the upper Sacramento River between Salt Creek and
Clear Creek to restore degraded spawning riffles in areas of the river
used by winter-run chinook salmon. The FWS has been evaluating these
gravel restoration efforts and issued progress reports in 1992 and
1993. Thus far, the majority of the gravel remains where it was
originally placed because flows have not reached rates great enough to
disperse it in the upper river. Studies by the FWS are expected to
continue through at least 1993 with a final report on the program
expected in 1994.
Adult winter-run chinook salmon can also be adversely impacted by
operation of the Keswick Dam stilling basin. Overflow of water from the
stilling basin during operation of the spillway attracts upstream
migrating adult salmon into the basin at the base of the Dam where they
become trapped. The CDFG and FWS have conducted fish rescue operations
at the stilling basin and removed hundreds of trapped salmon. Until the
facility is structurally modified to allow fish free passage back to
the river, it is likely that some adult winter-run chinook salmon will
be lost. To remedy this long-standing problem, the incidental take
statement issued with NMFS' February 12, 1993, biological opinion
requires the Bureau to structurally modify the stilling basin by no
later than December 31, 1993, so that adult winter-run chinook salmon
will be able to freely pass from the basin back into the Sacramento
River. NMFS and the Bureau have been meeting to discuss and evaluate
alternative methods of correcting the problems with the stilling basin.
Red Bluff Diversion Dam
Another serious habitat concern for winter-run chinook salmon is
the impediment to adult upstream migration caused by the Bureau's
operation of this dam on the Sacramento River. Operation of the dam and
the associated Tehama-Colusa Canal also adversely impacts juvenile
winter-run chinook salmon migrating downstream past the facility.
Impacts of the dam and its operations are discussed in the February 12,
1993, biological opinion addressing long-term operations of the Central
Valley and State Water Projects.
The 1993 biological opinion also includes specific measures to
minimize the impact of gate operations at Red Bluff Diversion Dam on
both the upstream passage of adult winter-run chinook salmon and the
downstream passage of juveniles. These measures require the Bureau to
maintain the dam gates in the raised position at least through April
30, 1993, and from November 1, 1993, through at least April 30, 1994.
After the Bureau's proposed pilot pumping project is operational in
1994, the Bureau must raise the dam gates from September 15 through at
least May 14 in all subsequent years. Operation of dam gates in
accordance with this schedule is expected to provide unimpeded access
to upper river spawning habitat for most migrating adults and
substantially reduce losses of downstream migrating juveniles due to
predation. The Bureau maintained the dam gates in the raised position
through April 30, 1993. In a effort to provide additional protection
for outmigrating juveniles in 1993, the Bureau raised the dam gates in
mid-October rather than on November 1 as required by the reasonable and
prudent alternative.
Operation of the Tehama-Colusa Canal water diversion facilities
associated with Red Bluff Diversion Dam before 1990 also adversely
affected juvenile winter-run chinook salmon during their outmigration.
To improve operation of the dam and canal and to reduce impacts to
juvenile salmonids, including winter-run chinook salmon, the Bureau
installed ``state-of-the-art'' drum screens and a bypass system at the
canal headworks in 1990. Studies conducted to date indicate that the
entrainment problem has been greatly diminished by the new screens. FWS
is expected to publish a report in 1993 summarizing the results of
monitoring and evaluation studies conducted in 1992. Additional
studies, including monitoring of entrainment and an evaluation of
mortality associated with the bypass system is anticipated in 1993. The
February 1993 biological opinion for long-term CVP operations requires
the Bureau to develop and implement a program to evaluate the fish
bypass facilities, and correct any identified problems. This evaluation
has not been completed.
The Bureau, in conjunction with Federal and state fishery agencies,
has been evaluating various alternatives to the existing facilities at
Red Bluff Diversion Dam. The Bureau published an appraisal report in
1992 that identified and analyzed several alternatives for improving
fish passage at the dam. Among the four most reasonable alternatives
identified in the appraisal report, two involve installation of a new
pumping plant based on the Archimedes screw design. The Bureau has
postponed final selection of a preferred alternative until experimental
data are collected and analyzed from a pilot pumping plant that will be
constructed downstream from the dam in 1994.
The pilot pumping plant that the Bureau has proposed to install at
the dam will consist of three large pumps to be located on the west
bank of the Sacramento River immediately downstream from the dam. Two
of the pumps will be closed Archimedes pumps and the third will be a
helical style pump, with each having approximately a 100 cfs capacity.
This pilot program is intended to evaluate the pump design and
operation, and to allow the Bureau to meet irrigation demands in the
Tehama-Colusa Canal service area while maintaining the dam gates in the
raised position. NMFS conducted an ESA section 7 consultation with the
Bureau on the pilot pumping project and issued a biological opinion and
incidental take statement in February 1993 which requires the Bureau to
conduct an extensive monitoring program to evaluate the effects of fish
passage by the pumps and assess the level of taking. Consultation was
reinitiated in June 1993 to address modifications in the design,
construction, and operations of the pumping facility that would delay
eventual operation from October 1993 to December 1994.
Pollution
Pollution in the Sacramento River has also degraded winter-run
chinook salmon spawning and rearing habitat. In particular, NMFS is
concerned about the effects on adult and juvenile winter-run chinook
salmon from runoff entering the upper Sacramento River that is
contaminated by heavy metals leached from inactive mining sites at Iron
Mountain Mine (IMM). Heavy metal concentrations from this runoff can
reach levels that are lethal to winter-run chinook salmon eggs and
juveniles. Metal-laden runoff that flows from IMM into the Spring Creek
drainage is impounded behind the Spring Creek Debris Dam operated by
the Bureau. The Bureau generally operates this dam to control the
release of contaminated Spring Creek flow in conjunction with dilution
releases from Shasta and Whiskeytown Reservoirs. The Bureau is expected
to continue controlling releases from Spring Creek Debris Dam in this
manner until source control and/or cleanup can be achieved.
The Environmental Protection Agency (EPA) has placed IMM on the
Superfund Priority List, and the State of California and EPA are
continuing to evaluate options for the long-term control of
contaminants originating from the IMM complex. Based on an memorandum
of Agreement between the Bureau and EPA, the Bureau will develop a plan
to enlarge Spring Creek Debris Dam to provide additional storage for
IMM effluent. EPA also issued a Record of Decision on September 30,
1992, identifying an interim remedial action plan to clean up hazardous
substances in the Boulder Creek Operable Unit at the IMM site. The
remedial action involves the collection and treatment of acid mine
drainage discharges from the Richmond and Lawson portals at IMM, and
the excavation and capping of existing waste piles that are eroding and
discharging into Boulder Creek and subsequently Spring Creek and the
upper Sacramento River. The Richmond and Lawson portals are the two
largest sources of hazardous materials at the IMM site and represent
the sources for nearly 40 percent of the copper and 80 percent of the
cadmium and zinc leached from IMM and discharged into tributaries
leading to the Sacramento River. In addition to these activities, the
EPA is moving forward with plans to study several remaining sources of
contamination at IMM and identify appropriate remedial actions.
The 1993 biological opinion to the Bureau also addressed
contamination from IMM. The opinion's incidental take statement
requires the Bureau to operate Spring Creek Debris Dam and Shasta Dam
so as to minimize the chronic exposure of adult and juvenile winter-run
chinook salmon to heavy metal concentrations and eliminate the
potential scouring of metal laden sediments from Keswick Reservoir.
NMFS has previously expressed concern that outmigrating juvenile
winter-run chinook salmon may be adversely impacted by the disposal of
contaminated dredge sediments at disposal sites located in the San
Francisco Bay area. The residence time for outmigrating winter-run
chinook salmon through the Bay is thought to range from 1 week to more
than 2 months depending on the water year type. Prey organisms utilized
by juvenile winter-run chinook salmon may bioaccumulate contaminants
originating from in-bay disposal of contaminated dredge sediments,
thereby exposing juveniles to these contaminants as they forage and
migrate through the Bay.
Although NMFS continues to be concerned about the potential effects
of in-bay disposal, the Corps has taken recent action to ensure that
in-bay disposal of contaminated materials does not occur. In June 1992,
the Corps, EPA, the Regional Water Quality Control Board, and the San
Francisco Bay Conservation and Development Commission published
proposed interim testing guidelines for dredged sediments that would be
disposed of at in-bay sites. On February 1, 1993, the Corps formally
adopted these guidelines in Public Notice 93-2. These interim testing
guidelines are designed to ensure that sufficient information is
available to characterize sediments to be dredged for all projects so
that disposal does not result in chemical or biological degradation of
the disposal site. These guidelines are intended to apply to all open
water disposal projects until a long-term plan for managing dredged
sediments in the San Francisco Bay area is developed and implemented.
Although the interim testing guidelines adopted by the Corps
represent an important short-term action aimed at preventing the in-bay
disposal of contaminated sediments, NMFS believes it is essential that
a long-term strategy be developed and implemented for San Francisco Bay
area dredging and disposal activities. To meet this need, the Corps and
several other Federal, state and local agencies, including NMFS, are
developing a Long-Term Management Strategy (LTMS) for managing dredging
and disposal activities. The LTMS is designed to provide appropriate
dredged material disposal alternatives for a 50-year planning horizon
through the designation of ocean, in-bay, and upland disposal sites and
the identification of beneficial reuse options. Implementation of the
LTMS management programs is anticipated to begin in August 1994.
Bank Stabilization
Bank stabilization projects in the Sacramento River are believed to
adversely affect winter-run chinook salmon rearing habitat. The Corp of
Engineers has developed the Sacramento River Bank Protection Project as
a long-range program for construction of bank erosion control works. On
October 28, 1991, NMFS issued a biological opinion to the Corps that
concluded Phase II of the project was not likely to jeopardize the
continued existence of winter-run chinook salmon. However, the
incidental take statement issued with the opinion requires the Corps to
select the least damaging bank stabilization methods available and to
provide NMFS with detailed mitigation plans for each bank protection
project in Phase II that would adversely affect winter-run chinook
salmon habitat. Based on recent information developed by the FWS
concerning bank protection methods that minimize impacts and the
importance of protecting shaded riverine aquatic habitat, NMFS
requested the Corps to reinitiate consultation on Phase II of the
project in late 1992. The Corps is currently developing additional
environmental documentation for the remaining Phase II bank protection
projects, and NMFS anticipates that further consultation will be
initiated when that documentation is completed.
2. Overutilization for Commercial, Recreational, Scientific or
Educational Purposes
Commercial and Recreational Fishing
In 1991, NMFS consulted with the Pacific Fishery Management Council
(PFMC) pursuant to section 7 of the ESA to evaluate the potential
effects of the proposed Pacific Ocean Salmon Fishery Management Plan
(FMP) on winter-run chinook salmon. A biological opinion was issued to
the PFMC on March 1, 1991, that concluded management of the salmon
fishery under the Pacific Ocean Salmon FMP was not likely to jeopardize
the continued existence of winter-run chinook salmon. An incidental
take statement was also issued with the opinion that authorized a
limited incidental take of winter-run chinook salmon by the ocean
fishery (NMFS 1991b). NMFS has also consulted with the Council
concerning implementation of Amendment 4 to the Pacific Coast
Groundfish FMP. The opinion issued by NMFS concluded that
implementation of the FMP would not jeopardize the continued existence
of winter-run chinook salmon as a result of incidental bycatch of
salmon in the fishery. NMFS will continue to consult internally and
with the PFMC, as appropriate, to ensure that ocean salmon and other
fishery management actions do not jeopardize the continued existence of
winter-run chinook salmon.
Since 1987, the CDFG has implemented seasonal fishing closures in
the upper Sacramento River and monitored the recreational salmon catch.
In 1990, the California Fish and Game Commission adopted regulations
that prohibited the retention of salmon in the Sacramento River when
adult winter-run chinook salmon are present. This closure has virtually
eliminated the taking of winter-run chinook salmon by recreational
fishermen. NMFS will continue to coordinate with CDFG concerning in-
river fishing restrictions.
Scientific Studies
In 1991, NMFS issued an ESA section 10 scientific research permit
to the FWS to conduct several scientific research studies on Sacramento
River winter-run chinook salmon. The FWS's Northern Central Valley
Fishery Resource Office published a report in early 1993 summarizing
their 1992 activities under the permit. The results from the juvenile
monitoring program, the hatchery propagation program, and the
temperature tolerance experiments are expected to significantly
contribute to NMFS efforts to protect and recover winter-run chinook
salmon.
CDFG and FWS also conduct annual spawning distribution surveys of
winter-run chinook salmon in the upper Sacramento River and develop
estimates of the annual spawning run size based on counts of fish
passing the dam. CDFG conducts aerial surveys each year to count
winter-run chinook spawning redds and determine their distribution in
the upper River. The FWS also counts winter-run chinook salmon redds in
an index area in the vicinity of Redding.
In March 1993, NMFS modified the FWS's scientific research to
authorize the directed take and sacrifice of coded-wire tagged winter-
run chinook juveniles produced at Coleman National Fish Hatchery and
collected during monitoring studies in the Sacramento River, the Delta,
and at the State and Federal water export facilities in the southern
Delta. The purpose of the study was to determine growth rates of
juvenile winter-run chinook salmon produced at the hatchery and
released into the wild, and to help verify the size criteria developed
by CDFG to separate and identify juvenile chinook salmon by race.
Under the terms of the May 1988 Ten Point Restoration Plan for
winter-run chinook salmon, the FWS agreed to fund and implement a
winter-run chinook salmon propagation program at the hatchery. Prior to
1991, this program was unsuccessful. However, in 1991 the FWS was able
to successfully hold and spawn six female winter-run chinook salmon
despite the low numbers of fish available (only 22), and produce and
release about 11,000 juveniles into the Sacramento River near Redding,
California. In 1992, the winter-run chinook salmon spawning run size
was substantially higher (1,180 fish), more adults were collected for
broodstock use, and a total of approximately 28,000 juvenile winter-run
chinook salmon with tags were released into the upper Sacramento River
in late January 1993. The FWS continued this program in 1993 using
approximately 17 wild adults and is currently rearing in excess of
20,000 juveniles at the hatchery. The surviving juveniles will
eventually be tagged and released into the upper Sacramento. This
marking program is expected to provide information on the timing of
winter-run chinook salmon outmigration and growth. In addition, marked
fish that return to the upper Sacramento River to spawn in the future
will be easily distinguishable from wild fish, thereby allowing the FWS
to assess the effectiveness of this supplementation program and ensure
that hatchery produced adults are not mated with each other. The
marking program may also provide additional information concerning the
ocean harvest of winter-run chinook salmon. NMFS is currently
conducting a section 7 consultation with the FWS to address the long-
term effects of this propagation program, as well as a proposed captive
broodstock program, and other existing propagation programs at the
hatchery, on the wild winter-run chinook salmon population. NMFS
expects to conclude consultation and issue a biological opinion to the
FWS before the end of 1993.
In April 1992, FWS applied for a modification to its scientific
research permit in order to initiate a captive breeding program using
about 1,000 juveniles that remained from the hatchery propagation
effort in 1991. A primary objective of this program was to provide
insurance against extinction or loss of unique genetic variability
until the wild winter-run chinook salmon population began to recover.
The goal of the program is to produce about 200 mature broodstock for
each of three consecutive years beginning in 1994.
The FWS transferred approximately 750 of the juveniles produced
from adults captured during the 1991 spawning run to the University of
California's Bodega Marine Laboratory in September 1992 for extended
captive rearing. A small number of these juveniles (approximately 50)
were subsequently transferred to Steinhart Aquarium in San Francisco
during March 1993 for further rearing and display. Additional juveniles
produced from adults collected and spawned in 1992 were transferred
from the hatchery to Bodega Marine Laboratory for extended rearing in
February 1993. As of September 1993, the Bodega Marine Lab was rearing
approximately 425 fish from the 1991 broodyear and approximately 640
fish from the 1992 broodyear. A portion of the surviving adults
produced from the 1991 and 1992 broodyears may eventually be returned
to the hatchery for use as broodstock. However, these captively reared
adults will not be used in any matings nor can their progeny be
released into the wild until after NMFS and FWS have concluded the
ongoing section 7 consultation that is addressing the potential adverse
effects of the captive broodstock program on wild fish, and NMFS has
amended the FWS's existing ESA section 10 research and propagation
permit.
3. Disease or Predation
The magnitude and extent of predation on winter-run chinook salmon
in the Sacramento River and Sacramento-San Joaquin Delta are poorly
known. However, studies by the FWS have found that predation at Red
Bluff Diversion Dam, primarily by squawfish, significantly contributes
to the mortality of downstream winter-run chinook salmon migrants. The
FWS has undertaken periodic electrofishing below the dam which may be
useful in developing a relative squawfish abundance index. All of the
fisheries agencies believe that before squawfish control is possible,
more must be learned about their life history. In 1992, the FWS
conducted limited studies of predation at the fish bypass outfall as
part of its continuing evaluation of the dam and the new screens that
were installed in 1990.
NMFS has addressed this problem, in part, by requiring the Bureau,
through the 1993 biological opinion on long-term operations of the
Central Valley Project, to maintain the Red Bluff Diversion Dam gates
in the raised position during most of the outmigration period. This
action is expected to reduce substantially the adverse effects of
predation at the dam on juvenile winter-run chinook salmon.
The potential for high levels of predation on juvenile winter-run
chinook salmon also exist at the Glen-Colusa Irrigation District (GCID)
diversion facility and other manmade structures such as the California
Department of Water Resource's Suisun Marsh Salinity Control Structure
and Clifton Court Forebay in the southern Delta. Predation studies
conducted by the CDFG in forebay indicate that the pre-screening
mortality of marked salmonids, primarily due to predation by striped
bass, is approximately 75 percent. Squawfish and striped bass predation
has also been observed on juvenile salmonids released back into the
Sacramento River from salvage operations conducted by the CDFG at State
and Federal fish protection facilities in the lower Sacramento-San
Joaquin Delta.
The CDFG is conducting an extensive ongoing program to assess the
abundance of predators in the forebay, remove predators by means of
gill nets and other fishing gear, and investigate and evaluate all
factors that are thought to contribute to pre-screening losses of
juvenile salmonids. The February 1993 opinion on long-term operation of
the CVP indirectly address predation in the forebay by limiting the
combined incidental take of juvenile winter-run chinook salmon at the
State and Federal facilities to 1 percent of the annual estimated
juvenile production. In addition, implementation of specific measures
contained in the opinion's reasonable and prudent alternative, such as
closure of the Delta Cross Channel and reverse flow criteria in the
western Delta, is expected to limit the diversion of juvenile winter-
run chinook salmon from the Sacramento River and their subsequent
exposure to predation in the Delta and possibly Clifton Court Forebay.
The CDFG began a large-scale program of stocking hatchery-reared
striped bass in 1981 through the Striped Bass Stamp Program authorized
that year. Approximately 60,000 yearling bass were stocked that year,
and the program increased substantially in subsequent years. Beginning
in 1984, the program expanded to include several private hatcheries and
two state facilities. Between 1982 and 1990, the program raised and
planted nearly 3.0 million juvenile striped bass. Additionally,
privately reared yearling bass have purchased and stocked by the
State's Department of Water Resources and the Pacific Gas and Electric
Company as mitigation for fish losses at their facilities in the Delta.
Since 1984, the company has purchased and stocked over 2.5 million
juvenile bass, and the State has stocked almost 5.0 million juvenile
bass since 1988.
Several groups raised concerns in 1992 about the possible effects
of CDFG's striped bass enhancement and management program on winter-run
chinook salmon. NMFS reviewed CDFG's proposed enhancement program for
1992 and recommended several changes, as well as the implementation of
studies designed to assess the magnitude of striped bass predation on
winter-run chinook salmon. As a result of these and other concerns,
CDFG eventually decided to suspend the planting of hatchery-reared
striped bass in Delta waters in 1992. In June 1993, NMFS requested that
CDFG delay further release of hatchery fish as part of its striped bass
management program, and apply for an ESA section 10 incidental take
permit.
4. The Inadequacy of Existing Regulatory Mechanisms
In the final rule listing winter-run chinook salmon as threatened
(55 FR 46515, November 5, 1990), NMFS concluded that the existing
regulatory mechanisms at that time were not adequate to recover the
Sacramento River winter-run chinook salmon. In the proposed rule
reclassifying the species as endangered (57 FR 27416, June 19, 1992),
NMFS concluded that regulatory mechanisms might not have been
sufficient or applied effectively. NMFS believes that measures
currently being taken by Federal agencies pursuant to their ESA section
7 obligations will reduce adverse impacts on the species. However,
these measures do not necessarily provide for the recovery of the
species, but that the continued existence of the species is not likely
to be jeopardized. Further, the adequacy or inadequacy of these
measures cannot be determined until at least the 1996 return of adult
salmon.
In addition, NMFS believes that Title XXXIV of Public Law 102-575--
Central Valley Project Improvement Act--which was enacted by Congress
in late 1992 will also contribute to the restoration and recovery of
the winter-run chinook salmon. Although that Act is intended to
protect, restore, and enhance all fishery resources and habitats in the
Central Valley and Trinity River basins of California, the
implementation of several provisions will directly benefit winter-run
chinook salmon and aid in its recovery. Several of the provisions are
also expected to help implement actions that NMFS has identified as
necessary to avoid jeopardizing the continued existence of winter-run
chinook salmon and ensure its eventual recovery.
Provisions of the Act that have the most direct beneficial effect
on winter-run chinook salmon are those requiring:
(1) Dedication of 800,000 acre-feet of CVP water for fish,
wildlife, and habitat restoration purposes annually,
(2) Installation and operation of a temperature control device at
Shasta Dam and modifications of CVP operations to control water
temperatures in the upper Sacramento River,
(3) Development and implementation of measures at the Red Bluff
Diversion Dam to minimize fish passage problems,
(4) Expansion of the FWS's existing hatchery facility,
(5) Modification of the Keswick Dam fish trap and spillway to
prevent trapping of fish,
(6) Development and implementation of a continuing program to
restore and replenish lost spawning gravel in the upper Sacramento
River,
(7) Development and implementation of a program that provides for
modified operations or new and improved control structures at the Delta
Cross Channel and Georgiana Slough,
(8) Development and implementation of a program to resolve fish
passage and stranding problems associated with operation of the ACID
dam,
(9) Maintenance of minimum carryover storage in Sacramento and
Trinity River reservoirs,
(10) Design and construction, in conjunction with the State of
California and other Federal agencies, of a new fish protection
structure at the GCID pumping facility near Hamilton City, and
(11) Development and implementation, with the State of California,
of measures to avoid losses of juvenile fish resulting from unscreened
or poorly screened diversions.
EPA is expected to propose, in December 1993, regulations that
would set water quality standards for the San Francisco Bay/Sacramento-
San Joaquin Bay/Delta estuary. This is in response to EPA disapproving
many elements of a water quality control plan for salinity adopted in
May 1991 by the California State Water Resources Control Board. The
plan was disapproved because it failed to adequately protect the
estuarine habitat and its resources. NMFS is presently consulting with
EPA concerning the effects of the standards to be proposed on winter-
run chinook salmon and its critical habitat.
5. Other Natural or Manmade Factors Affecting the Continued Existence
of the Species
Unscreened Diversions and Entrainment
Juvenile winter-run chinook salmon are subject to entrainment by
large numbers of unscreened or inadequately screened diversions during
their outmigration to the Pacific Ocean. These diversions range from
small siphons diverting 20 cfs to the large export facilities operated
by the Bureau and Department of Water Resources in the southern Delta
that have the combined capacity of pumping approximately 12,000 cfs of
water daily. The magnitude of this impact is currently unknown.
Because of the potential impact from unscreened diversions, NMFS
published an Advanced Notice of Proposed Rulemaking (ANPR) on October
18, 1993, that stated NMFS is considering development of regulations
that would establish screening requirements for water diversions from
the Sacramento River and the Delta to protect juvenile winter-run
chinook salmon. The ANPR also requested specific information and
comments concerning the numbers, types, and sizes of diversions, the
magnitude of juvenile salmon losses at unscreened diversions, the
feasibility of installing positive-barrier fish screens to reduce
losses, the estimated costs of screening and available funding
mechanisms, and the availability of alternative management options for
reducing fish losses due to entrainment. NMFS will evaluate all
information and comments on the ANPR to determine whether to proceed
with the development of screening regulations.
In addition, the CDFG has begun an inventory of all existing water
diversions on the Sacramento River and in the Sacramento-San Joaquin
Delta to determine the number and size of unscreened diversions and
identify high priority facilities requiring screening. The Bureau, in
conjunction with the State, has also established a demonstration
screening program that is expected to be implemented in 1994. This
program was included as a measure to reduce taking of winter-run
chinook salmon in the incidental take statement that NMFS issued to the
Bureau with the February 12, 1993, biological opinion covering long-
term CVP operations. The program is intended to promote the advancement
of state-of-the-art positive barrier screening technology at small
(less than 40 cfs) unscreened diversions along the Sacramento River and
within Delta waterways.
Anderson Cottonwood Irrigation District
The Anderson Cottonwood Irrigation District (ACID) operates a
diversion dam and two diversion facilities on the upper Sacramento
River near Redding, California. The larger of the two diversions is
protected by a screen operated and maintained by the CDFG. Until July
1992, the smaller Bonneyview water diversion facility (65 cfs capacity)
was unscreened.
In May 1992 the ACID applied for a Corps of Engineers (Corps)
permit to install a screening structure at the Bonneyview facility, and
NMFS initiated section 7 consultation with the Corps to evaluate the
effects of installing and operating the structure on winter-run chinook
salmon. The ACID obtained a Corps permit and installed an impervious
barrier with screens that was operational by early July 1992.
Monitoring by CDFG in the irrigation canal behind the screening
structure in July and August 1992 demonstrated that the structure
effectively eliminated the entrainment of juvenile winter-run chinook
salmon and other species. Subsequent dive inspections of the screening
facility by the NMFS found that the cleaning mechanism was working
improperly. As a result, ACID personnel are now cleaning the screens
manually and are expected to work with NMFS and the screen manufacturer
to develop an alternative cleaning mechanism.
Glenn-Colusa Irrigation District
The GCID diversion facility located near Hamilton City, California,
is the single largest diverter of water on the Sacramento River with
the capacity to take up to 3,000 cfs daily. Inadequate fish screens at
the facility result in the entrainment and impingement of juvenile
salmon, including winter-run chinook salmon, that are dispersing in the
river system during the peak of the irrigation season. Since 1990, NMFS
has used the section 7 and section 10 provisions of ESA, together with
direct legal action, in an effort to remedy the adverse effects of GCID
water diversion operations on winter-run chinook salmon.
On August 16, 1991, the U.S. District Court in Sacramento,
California issued a temporary restraining order that required GCID not
to exceed a pumping rate of 1,100 cfs from August 19 to August 29,
1991. On January 9, 1992, the Court issued a permanent injunction that
completely enjoined GCID from diverting any water at the facility from
July 15 through November 30. The Court modified the permanent
injunction in April 1992 to allow GCID to operate under the terms and
conditions of a joint stipulation that was agreed to by GCID, the
Department of Justice, and the State of California. Under the terms and
conditions of the modified injunction, GCID was allowed to pump water
on a restricted basis in 1992 in exchange for its commitment to
implement a long-term solution to correct existing fish passage
problems at the facility.
Following completion of an ESA section 7 consultation and the
issuance of a biological opinion from NMFS on June 5, 1992, the Corps
issued a 1-year permit to GCID that authorized dredging and other
construction activities that were identified as terms and conditions in
the modified the permanent injunction. GCID completed construction of a
training wall, reconfiguration of the lower oxbow leading back into the
Sacramento River, and additional maintenance dredging near the screens
by mid-July 1992.
In September 1992, the Corps initiated consultation with NMFS
concerning a new GCID permit application to conduct maintenance
dredging and other activities at its facility over a 3-year period
(1993-95). On April 22, 1993, NMFS concluded consultation and issued a
jeopardy biological opinion and incidental take statement that limited
dredging in the upper oxbow, required maintenance of the training wall
and pilot cut through the lower oxbow, limited the permit duration to a
period of 1 year, and required GCID to pursue a long-term solution for
protecting winter-run chinook salmon and correcting passage problems at
the facility. Following issuance of the Corps permit, GCID conducted
maintenance dredging and other maintenance activities in accordance
with the requirements of the biological opinion, and subsequently began
pumping water on a restricted basis beginning on August 1, 1993.
The Department of Justice and GCID signed a new stipulated
agreement in June 1993 that allowed operations to continue in 1993.
This new agreement, in conjunction with the biological opinion that was
issued to the Corps, restricted pumping activities at the Hamilton City
facility, required various types of monitoring, and committed GCID to
ensure the implementation of long-term protective and conservation
measures for winter-run chinook salmon at its Hamilton City facility.
In 1992, GCID, the State of California, and the Corps began a joint
Federal and state environmental review process to evaluate several
long-term alternatives for correcting fish entrainment, impingement,
and passage problems at the GCID facility. The Bureau is now the lead
Federal agency responsible for preparing the environmental
documentation and constructing the selected long-term protective and
conservation measures due to the passage of the Central Valley
Improvement Act. The environmental review process has been delayed, but
is expected to be completed by mid-1994. NMFS will consult with the
Bureau to evaluate the effects of constructing and operating the
selected long-term protection alternative on winter-run chinook salmon.
Delta Export Facilities of the Central Valley Project and the State
Water Project
The Bureau and the California Department of Water Resources operate
facilities in the Sacramento-San Joaquin Delta to convey Sacramento
River water into and through the Delta and to export water out of the
Delta. These facilities include the Delta Cross Channel operated by the
Bureau, and water export and fish protection facilities operated by the
Bureau (Tracy Pumping Plant) and California Department of Water
Resources (Byron Pumping Plant). The operations of these and other
Central Valley and State water facilities, which are coordinated
through the Coordinated Operations Agreement between the Bureau and the
State, can adversely impact winter-run chinook salmon.
To address the potential adverse effects of gate operations on
juvenile winter-run chinook salmon survival in 1992, NMFS included a
reasonable and prudent alternative measure in the February 14, 1992,
biological opinion for 1992 CVP operations requiring the Bureau to
close the Delta Cross Channel from February 1 through May 1, 1992. This
action was expected to substantially reduce the diversion of juvenile
winter-run chinook salmon into the Delta from the Sacramento River,
especially with the extremely critical water supply and low export
pumping rates that were anticipated to occur in 1992. Operation of the
Federal and State export facilities in 1992 was not expected to
incidentally take more than a small percentage of the 1991 winter-run
chinook salmon outmigrant population.
However, based on monitoring at these facilities during February
and March 1992, NMFS determined that the taking of juveniles exceeded
the amount identified in the incidental take statement, and requested
consultation be reinitiated. After further consultation with the Bureau
and the State was completed, NMFS amended the incidental take statement
to restrict the combined daily water export rate from both facilities
to 1,200 cfs during the remainder of April 1992. The amended take
statement also required that consultation be reinitiated if the
incidental take of juveniles exceeded 400 fish during this period or
there was evidence to indicate that winter-run outmigration would
substantially continue beyond April 30, 1992, and required both the
Bureau and the State to support efforts to develop a more refined and
accurate method for determining the level of taking incidental to
pumping operations at the water export facilities.
Because the losses of juvenile fish at these facilities were higher
than expected in the spring of 1992, NMFS and the CDFG established a
Delta Salvage and Loss Working Group consisting of representatives from
NMFS, FWS, the California Departments of Fish and Game and Water
Resources, and the Bureau. The objectives of this group were to (1)
review and refine the juvenile winter-run chinook salmon loss estimates
at the water export facilities during the 1992 outmigration period, and
(2) evaluate the loss estimation and reporting procedures used in 1992
and make recommendations for improving the procedures for 1993 and
future years. The group met frequently to discuss these issues and
issued a summary report in September 1992 that included a revised
estimate of juvenile winter-run chinook salmon losses in 1992 and a
series of recommendations for loss estimation and reporting. The loss
estimation and reporting procedures developed by this group were
eventually incorporated into the February 12, 1993, biological opinion
and incidental take statement that NMFS issued to the Bureau on the
long-term operations of the Federal and State water projects.
The biological opinion also includes protective measures designed
to reduce the impact of Delta operations on winter-run chinook salmon.
The reasonable and prudent alternative in the opinion contains the
following measures to avoid jeopardizing the continued existence of
winter-run chinook salmon: (1) Closure of the Delta Cross Channel each
year from February 1 through April 30; (2) operation of the cross
channel gate each year from October 1 through January 31 to minimize
the diversion of juveniles into the Delta based on the use of a real-
time monitoring program; (3) operation of the delta water export
facilities each year to ensure that no reverse flow conditions occur in
the western Delta from February 1 through April 30; (4) operation of
the delta export facilities each year to ensure that reverse flow
conditions are minimized from November 1 through January 31; and (5)
monitoring of winter-run chinook incidental take at the Federal and
State export facilities. The incidental take statement included with
the opinion also contains measures designed to minimize the taking of
juvenile winter-run chinook salmon incidental to the operation of the
water export facilities. This take statement identifies the level of
incidental taking by the Bureau and State export facilities to be no
more than 1 percent of the estimated number of outmigrant juvenile
winter-run chinook salmon entering the Delta in any year, and requires
the Bureau and the State to submit daily, weekly, and annual reports
based on an extensive monitoring program to ensure the incidental take
authorization is not exceeded.
Based on the 1992 run size estimate (1,180 fish), NMFS determined
that the allowable take of outmigrating juvenile winter-run chinook
salmon incidental to operation of the export facilities in 1992-93 was
2,700 fish. Monitoring of winter-run chinook salmon incidental take
during the 1993 outmigration season indicated that the level of taking
was substantially higher at the State export facility than at the
Federal export facility. The monitoring program also indicated that the
rate of taking by mid-February 1993 was higher than anticipated, and
that continued high pumping rates could result in exceeding the annual
take level authorized by NMFS. As a result, the State voluntarily
curtailed pumping at its Delta pumping facility in late February to
reduce the loss rate and cumulative loss of juvenile winter-run chinook
salmon at its facility. Although pumping rates were gradually increased
during March and April 1993 at the State facility, the cumulative loss
of juveniles was less than 1 percent of the estimated outmigrant
population in 1993. As a result of these and other actions taken by the
State and Bureau in accordance with the February 12, 1993, biological
opinion and incidental take statement, NMFS believes that the survival
of outmigrating juveniles in 1993 was significantly improved over
previous years. Continued implementation of these protective measures
in future years is expected to improve outmigration success of juvenile
winter-run chinook salmon and aid in recovery.
Suisun Marsh
Operation of the Suisun Marsh salinity control gate structure by
the State can potentially affect winter-run chinook adversely by
diverting outmigrating juveniles from the Sacramento River into
Montezuma Slough where conditions for survival are poorer because
diverted fish have a longer migration route, and are exposed to
increased water temperatures, increased predation, and numerous
unscreened water diversions. Upstream migrant adult winter-run chinook
that enter the downstream end of Montezuma Slough may also be blocked
or delayed by operation of the gates as they attempt to migrate into
the Sacramento River.
In order to minimize impacts on winter-run chinook salmon
juveniles, NMFS required (in the 1992 CVP opinion) that salinity
control gates to either close from March 1 through April 15, or that
unscreened diversions in the Slough not operate during this period. The
California Departments of Water Resources and Fish and Game conducted
monitoring during this period and provided documentation to NMFS that
these diversions were not operated. However, sampling by FWS during
April 1992 also indicated that only a small percentage of marked
juvenile salmonids (0.2-1.5 percent) were diverted into Montezuma
Slough.
Since the potential impacts of operating the salinity control gates
on winter-run chinook salmon are unclear based on the available
information, NMFS addressed the need for additional studies at the
facility in the incidental take statement included with the 1993 CVP
biological opinion. Specifically, the incidental take statement
requires the Bureau and the State to develop and implement a program to
evaluate the effects of operating the salinity control structure on
winter-run chinook salmon by spring 1994. The program is expected to
assess the diversion rate of chinook salmon juveniles into Montezuma
Slough, predation at the structure, survival of juveniles passing
through the slough, and passage of adults upstream.
Droughts/El Nino
The natural factors of greatest concern to NMFS are drought
conditions and the oceanographic phenomenon known as El Nino. The
effects of the extended 1987-1992 drought on California's water supply
have likely exacerbated the effects of management of State and Federal
water operations and other activities on winter-run chinook salmon over
the past several years. However, the end of the drought in 1993 due to
above normal levels of precipitation throughout the State, and the
implementation of protective measures contained in NMFS February 12,
1993, biological opinion are expected to reduce the adverse effects of
drought in future years by ensuring that minimum carryover storage is
maintained in Shasta Reservoir each year, and that conservative water
supply forecasts are used by the Bureau to make annual water allocation
decisions. In addition to these measures, the Bureau is expected to
construct a temperature control device at Shasta Reservoir that should
improve its ability to provide suitable water temperatures in the upper
Sacramento River.
The El Nino event that began in 1991-1992 may result in reduced
ocean survival of winter-run chinook salmon produced in 1990 and 1991
when the estimated run sizes were very low (441 and 191 fish
respectively) and drought conditions prevailed. For these and other
reasons, NMFS anticipated that the 1993 run size would be low, and also
expects that the run size in 1994 will be weak. The only measure that
may help to mitigate the impact of El Nino events may be the hatchery
supplementation program developed by the FWS to augment natural
juvenile production. If the hatchery supplementation program proves to
be successful, it may provide the necessary juvenile production to
offset any adverse effects of El Nino conditions.
Conclusion
Since the winter-run chinook salmon was formally listed as a
threatened species in November 1990 (55 FR 46515), the annual estimated
run sizes have become more variable and have continued to decline with
the exception of an increase in 1992. Although some protective measures
were implemented beginning in 1987, the decline was exacerbated by a 6-
year drought in California (1987-1992) and threats adversely affecting
the species that were not addressed until recently. Based on the run
size estimates for the last 3 years (1991-1993), the population now has
at least one and possibly two extremely weak year classes (1991 and
1993). NMFS expects that the 1994 run will also be weak because of the
small numbers of adults returning in 1991 (191 fish) and less than
favorable conditions for spawning, egg incubation, and juvenile
outmigration that occurred in 1991-92. This years class is likely to
remain weakened for the foreseeable future.
Although conditions for winter-run chinook salmon began improving
in 1992 and 1993 because of protective measures implemented to reduce
the long-term impacts of operations of the Federal and State water
projects and improve conditions for successful egg incubation, rearing,
and outmigration, the 6-year drought ended, and the natural production
of juveniles is being supplemented with hatchery produced fish, NMFS
believes that quantifiable improvements in population levels are not
likely to be evident for several years. Since the effectiveness of
these recently implemented protective measures and supplementation
efforts is unknown and cannot be assessed until future runs return,
there remains substantial risk that the population is in danger of
extinction.
Based on the continued decline of the population and increased
variability of run sizes since 1991, the expected weak return in 1994,
continuing threats to the population, and uncertainty about whether
recently implemented protective and conservation measures will be
effective, NMFS believes that the Sacramento River winter-run chinook
salmon is in danger of becoming extinct and should be classified as an
endangered species. NMFS will continue to monitor closely the status of
this population as well as evaluate the effectiveness of existing and
future protective and conservation measures to determine whether any
further changes in its status are warranted.
Available Conservation Measures
Conservation measures provided to species that are listed under the
ESA include listing, recovery actions, implementation of certain
protective measures, and designation and protection of critical
habitat. Some of the most useful protective measures are contained in
section 7 of the ESA. Pursuant to section 7, Federal agencies are
required to conduct conservation programs for endangered species and to
consult with NMFS regarding the potential effects of their actions on
winter-run chinook salmon.
Since winter-run chinook salmon was originally listed as a
threatened species on an emergency basis in August 1989, NMFS has
conducted numerous section 7 consultations with Federal agencies whose
actions may affect the species. The most significant consultations have
been with the Bureau and the California Department of Water Resources
concerning the long-term operations of the Central Valley Project and
the State Water Project and the Corps concerning fish passage at the
GCID diversion facility at Hamilton City. NMFS is currently engaged in
consultations with other Federal agencies and will continue this
process to determine whether Federal actions affect winter-run chinook
salmon.
Section 10 of the ESA provides for addressing the effects of
private and state (non-Federal) actions on endangered species. NMFS has
worked with GCID to address the impacts of their major diversion
facility on winter-run chinook salmon through this process. NMFS also
expects to work with the CDFG to address potentially adverse effects of
striped bass and salmon hatchery management on winter-run chinook
salmon. In the future, NMFS will continue to pursue opportunities to
remedy private and non-Federal activities that may affect winter-run
chinook salmon through this process.
In 1992, NMFS established a National Sacramento River Winter-run
Chinook Salmon recovery team to develop a recovery plan for the
species. The team is comprised of fishery resource managers, experts on
winter-run chinook salmon biology and, other conservation specialists.
The recovery team meets frequently and expects to complete development
of a comprehensive draft recovery plan in 1994.
Critical Habitat
Section 4(a)(3)(A) of the ESA requires that, to the extent that it
is prudent and determinable, critical habitat be designated
concurrently with the listing of a species. NMFS published a final rule
designating critical habitat for Sacramento River winter-run chinook
salmon on June 16, 1993. The designated critical habitat includes: the
Sacramento River from Keswick Dam (RM 302) to Chipps Island (RM 0) at
the westward margin of the Sacramento-San Joaquin Delta, all waters
from Chipps Island westward to Carquinez Bridge, all waters of San
Pablo Bay, and all waters in San Francisco Bay north of the San
Francisco/Oakland Bay Bridge. The final rule also identifies those
physical and biological features of the habitat that are essential to
the conservation of winter-run chinook salmon.
List of Subjects
50 CFR Part 222
Administrative practice and procedure, Endangered and threatened
species, Exports, Imports, Reporting and recordkeeping requirements,
Transportation.
50 CFR Part 227
Endangered and threatened species, Exports, Imports, Marine
mammals, Transportation.
Dated: December 14, 1993.
Nancy Foster,
Deputy Assistant Administrator for Fisheries, National Marine Fisheries
Service.
For the reasons set forth in the preamble, 50 CFR parts 222 and 227
are amended as follows:
PART 222--ENDANGERED FISH OR WILDLIFE
1. The authority citation for part 222 continues to read as
follows:
Authority: 16 U.S.C. 1531-1543.
Sec. 222.23 [Amended]
2. In Sec. 222.23, paragraph (a) is amended by adding the phrase
``Sacramento River winter-run chinook salmon (Oncorhynchus
tshawytscha);'' immediately after the phrase ``Snake River sockeye
salmon (Oncorhynchus nerka)'' in the second sentence.
PART 227--THREATENED FISH AND WILDLIFE
3. The authority citation for part 227 continues to read as
follows:
Authority: 16 U.S.C. 1531 et seq.
Sec. 227.4 [Amended]
4. In Sec. 227.4, paragraph (e) is removed and paragraphs (f)
through (h) are redesignated paragraphs (e) through (g) respectively.
Sec. 227.21 [Amended]
5. In Sec. 227.21, paragraphs (a) and (b)(1), the phrase ``(e), (g)
and (h)'' is removed, and the phrase ``(f) and (g)'' is added in its
place; in paragraph (b)(2), the phrase ``(g) and (h)'' is removed and
the phrase ``(f) and (g)'' is added in its place.
[FR Doc. 93-31089 Filed 12-28-93; 4:17 pm]
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