National Bioengineered Food Disclosure Standard

Published date21 December 2018
Record Number2018-27283
CourtAgricultural Marketing Service
Federal Register, Volume 83 Issue 245 (Friday, December 21, 2018)
[Federal Register Volume 83, Number 245 (Friday, December 21, 2018)]
                [Rules and Regulations]
                [Pages 65814-65876]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2018-27283]
                [[Page 65813]]
                Vol. 83
                Friday,
                No. 245
                December 21, 2018
                Part IIDepartment of Agriculture-----------------------------------------------------------------------Agricultural Marketing Service-----------------------------------------------------------------------7 CFR Part 66National Bioengineered Food Disclosure Standard; Rules
                Federal Register / Vol. 83 , No. 245 / Friday, December 21, 2018 /
                Rules and Regulations
                [[Page 65814]]
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                DEPARTMENT OF AGRICULTURE
                Agricultural Marketing Service
                7 CFR Part 66
                [Doc. No. AMS-TM-17-0050]
                RIN 0581-AD54
                National Bioengineered Food Disclosure Standard
                AGENCY: Agricultural Marketing Service, USDA.
                ACTION: Final rule.
                -----------------------------------------------------------------------
                SUMMARY: This rule establishes the new national mandatory bioengineered
                (BE) food disclosure standard (NBFDS or Standard). The new Standard
                requires food manufacturers, importers, and other entities that label
                foods for retail sale to disclose information about BE food and BE food
                ingredients. This rule is intended to provide a mandatory uniform
                national standard for disclosure of information to consumers about the
                BE status of foods. Establishment and implementation of the new
                Standard is required by an amendment to the Agricultural Marketing Act
                of 1946.
                DATES: Effective Date: This rule becomes effective February 19, 2019.
                 Implementation Date: January 1, 2020.
                 Extended Implementation Date (for small food manufacturers):
                January 1, 2021.
                 Voluntary Compliance Date: Ends on December 31, 2021.
                 Mandatory Compliance Date: January 1, 2022.
                FOR FURTHER INFORMATION CONTACT: Arthur L. Neal, Jr, Deputy
                Administrator, Transportation and Marketing Program, AMS, USDA, 1400
                Independence Ave. SW, Room 4543-S, Washington, DC 20250; email:
                Arthur.Neal@usda.gov; telephone: 202-690-1300; or fax: 202-690-0338.
                SUPPLEMENTARY INFORMATION: On July 29, 2016, Public Law 114-216 amended
                the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.), as
                amended (amended Act), by adding Subtitles E and F. Subtitle E of the
                amended Act directs the Secretary of Agriculture (Secretary) to
                establish the NBFDS for disclosing any food that is or may be
                bioengineered. 7 U.S.C. 1639b(a)(1). Subtitle E also directs the
                Secretary to establish requirements and procedures necessary to carry
                out the new Standard. 7 U.S.C. 1639b(a)(2).
                Outline of the Final Rule
                I. Introduction
                II. Applicability
                 A. Definitions
                 B. Food Subject to Disclosure
                 C. Bioengineered Food
                 1. Definition of ``Bioengineering'' and ``Bioengineered Food''
                 2. Conventional Breeding
                 3. Found in Nature
                 D. List of Bioengineered Foods
                 1. List Maintenance and Revision
                 2. Treatment of Technologies
                 E. Factors and Conditions
                 1. Incidental Additives
                 2. Undetectable Modified Genetic Material
                 F. Exemptions
                 1. Food Served in a Restaurant or Similar Retail Food
                Establishment
                 2. Very Small Food Manufacturers
                 3. Threshold
                 4. Animals Fed With Bioengineered Feed and Their Products
                 5. Food Certified Under the National Organic Program
                 G. Severability
                III. Disclosure
                 A. General
                 1. Responsibility for Disclosure
                 2. International Impact
                 3. Appearance of Disclosure
                 4. Placement of Disclosure
                 5. How the List of Bioengineered Foods Relates to Disclosure
                 a. Disclosure Options
                 b. Use of the ``May Be'' Option
                 B. Text Disclosure
                 C. Symbol Disclosure
                 D. Electronic or Digital Link Disclosure
                 E. Study on Electronic Disclosure and a Text Message Disclosure
                Option
                 F. Small Food Manufacturers
                 1. Definition
                 2. Telephone Number
                 3. Internet website
                 G. Small and Very Small Packages
                 H. Food Sold in Bulk Containers
                 I. Voluntary Disclosure
                IV. Administrative Provisions
                 A. Recordkeeping Requirements
                 B. Enforcement
                 C. Effective, Implementation, and Compliance Dates
                 D. Use of Existing Label Inventories
                V. Comments on the NPRM
                VI. Rulemaking Analyses and Notices
                 A. Paperwork Reduction Act
                 1. Comments on Information Collection and Recordkeeping
                 B. E-Gov
                 C. Civil Rights Review
                 D. Executive Orders 12866, 13563, and 113771
                E. Final Regulatory Flexibility Analysis
                 1. Introduction
                 2. Economic Effects on Small Entities
                 3. Definition of Small Business
                 4. Coordination of Definition of Small Food Manufacturers With
                FDA Definition
                 5. Exemptions for Very Small Food Manufacturers
                 6. Costs to Small Entities
                 7. Summary
                 F. Executive Order 113175
                G. Executive Order 112988
                H. Executive Order 13132
                I. Introduction
                 The Secretary delegated authority for establishing and
                administering the NBFDS to the Agricultural Marketing Service (AMS). To
                assist with development of the new Standard, AMS posted 30 questions
                for public consideration and comment on its website (https://www.ams.usda.gov/rules-regulations/public-input-bioengineered-food-disclosure-questions) on June 28, 2017. Contributors from diverse
                backgrounds, including consumers, food manufacturers and retailers,
                farmers and processors, State and foreign governments, and various
                associations and other interested groups representing consumers and
                industry submitted over 112,000 responses. AMS posted the responses on
                its website.
                 AMS considered responses to the 30 questions in the development of
                a proposed rule, which was included in a notice of proposed rulemaking
                (NPRM) published in the Federal Register on May 4, 2018 (83 FR 19860).
                The NPRM outlined AMS's proposed requirements and procedures for the
                new Standard to be codified at 7 CFR part 66 and requested public
                comment on several regulatory alternatives offered for consideration.
                The public comment period closed on July 3, 2018. AMS received
                approximately 14,000 comments by the end of the comment period.
                 Subsequent to publication of the NPRM, AMS published two documents
                in the Federal Register related to this proceeding. The first,
                published on May 23, 2018 (83 FR 23827), announced the availability of
                a recorded webinar about the proposed NBFDS on AMS's website. The
                second, published on June 20, 2018 (83 FR 28547), made a correction to
                the Initial Regulatory Flexibility Analysis contained in the NPRM to
                clarify that the proposed rule was not expected to have a significant
                economic impact on a substantial number of small business entities.
                 AMS also published two supplemental documents related to the NBFDS.
                One, a Regulatory Impact Analysis and its supporting documents, was
                posted on Regulations.gov at https://www.regulations.gov/document?D=AMS-TM-17-0050-2833. The other, a graphic document showing
                alternative proposals for BE food disclosure labels, was posted on
                Regulations.gov at https://www.regulations.gov/document?D=AMS-TM-17-0050-0003, and on AMS's website at https://www.ams.usda.gov/sites/default/files/media/ProposedBioengineeredLabels.pdf.
                 The amended Act directs the Secretary to conduct a study to
                identify potential technological challenges related to electronic or
                digital disclosure
                [[Page 65815]]
                methods. See 7 U.S.C. 1639b(c)(1). AMS sponsored such a study, and the
                results were published on AMS's website (https://www.ams.usda.gov/reports/study-electronic-or-digital-disclosure) in September 2017.
                Public comments on the results of the study were solicited in
                conjunction with the NPRM. The Secretary's determination regarding this
                matter is discussed in Section III of this final rule.
                 Finally, Subtitle F of the amended Act addresses Federal preemption
                of State and local genetic engineering labeling requirements. 7 U.S.C.
                1639i. Subtitle F also specifies that certification of food under the
                U.S. Department of Agriculture's (USDA) National Organic Program (NOP)
                (7 CFR part 205) shall be considered sufficient to make claims about
                the absence of bioengineering in the food. 7 U.S.C. 6524.
                 The purpose of the NBFDS as contained in this final rule is to
                provide a mandatory disclosure standard for BE food, by which uniform
                information is provided to consumers. Nothing in the disclosure
                requirements set out in this final rule conveys information about the
                health, safety, or environmental attributes of BE food as compared to
                non-BE counterparts.
                 In fact, the regulatory oversight by USDA and other Federal
                Government agencies ensures that food produced through bioengineering
                meets all relevant Federal health, safety, and environmental standards.
                The agencies responsible for oversight of the products of biotechnology
                include: USDA's Animal and Plant Health Inspection Service (APHIS), the
                U.S. Environmental Protection Agency (EPA), and the Department of
                Health and Human Services' Food and Drug Administration (FDA). The
                Coordinated Framework for Regulation of Biotechnology (Coordinated
                Framework) is a policy framework that summarizes the roles and
                responsibilities of these three principal regulatory agencies with
                respect to regulating biotechnology products.
                 The final rule is intended to provide for disclosure of foods that
                are or may be bioengineered to consumers, but also seeks to minimize
                implementation and compliance costs for the food industry--costs that
                could be passed on to all consumers. To that end, AMS has tried to
                craft requirements that are clear and straightforward, incorporating
                flexibility where appropriate. Public input has been invaluable to this
                effort; public comments submitted in response to the proposed rule were
                critical to the development of the final rule.
                 The following discussion of the NBFDS is divided into three parts:
                (1) Applicability; (2) disclosure; and (3) administrative provisions.
                II. Applicability
                 The amended Act directs USDA to promulgate regulations regarding
                foods required to bear a disclosure indicating that the food is or may
                be bioengineered. 7 U.S.C. 1639b(b). At the outset, the amended Act
                establishes the scope of the NBFDS by defining ``bioengineering'' and
                ``food,'' and by limiting mandatory disclosure to those foods subject
                to the labeling requirements of the Federal Food, Drug, and Cosmetic
                Act (FDCA) (21 U.S.C. 301 et seq.) and to certain foods subject to
                labeling under the Federal Meat Inspection Act (FMIA)(21 U.S.C. 601 et
                seq.), the Poultry Products Inspection Act (PPIA)(21 U.S.C. 451 et
                seq.), or the Egg Products Inspection Act (EPIA)(21 U.S.C. 1031 et
                seq.) administered by the Food Safety and Inspection Service (FSIS). 7
                U.S.C. 1639 and 1639a. Definitions pertinent to the new part 66,
                descriptions of foods that are subject to disclosure, and explanations
                of applicable exemptions are included in subpart A of the new
                regulatory section.
                 Section 66.3 sets forth the general requirements for disclosure.
                Section 66.3(a) requires that labels for bioengineered food must bear a
                BE disclosure consistent with the requirements of part 66. Section
                66.3(a)(2) prohibits labels for food that is not bioengineered from
                bearing a BE disclosure unless the food may bear a voluntary disclosure
                under Sec. 66.116, based on records maintained under Sec. 66.302.
                A. Definitions
                 Section 66.1 lists the definitions that apply to new part 66. For
                subpart A, the key terms are ``bioengineered food,'' ``bioengineered
                substance,'' ``food,'' ``label,'' ``predominance,'' ``similar retail
                food establishment,'' ``very small food manufacturer,'' and ``List of
                Bioengineered Foods.'' These terms are critical in determining what
                foods require a BE disclosure.
                B. Food Subject to Disclosure
                 Whether a food is subject to the labeling requirements of the
                amended Act, depends as a preliminary matter on whether the product at
                issue is a food. The amended Act codified the definition of ``food'' as
                ``a food (as defined in section 321 of title 21) that is intended for
                human consumption.''\1\ 7 U.S.C. 1639(2). The final rule adopts the
                same definition of ``food'' as used in the amended Act.
                ---------------------------------------------------------------------------
                 \1\ The original text of the amended Act referred to section 201
                of the FDCA, but the reference was changed to section 321 of title
                21 in the codification of the statute.
                ---------------------------------------------------------------------------
                 The FDCA defines ``food'' as ``. . . (1) articles used for food or
                drink for man or other animals, (2) chewing gum, and (3) articles used
                for components of any such article.'' 21 U.S.C. 321(f). Ultimately, FDA
                has jurisdiction over the FDCA and has the authority to determine what
                is considered ``food'' under the FDCA. AMS has deferred to FDA in
                interpreting the definition of ``food.'' However, the amended Act
                limits the definition of food for purposes of the NBFDS to articles
                used for human consumption and does not include articles used for
                animals. Therefore, although pet food and animal feed are ``food''
                under the FDCA, such foods for animals are not covered by this
                regulation, pursuant to the amended Act. Chewing gum is considered to
                be ``intended for human consumption,'' and is therefore considered a
                ``food'' for the purpose of the NBFDS.
                 Under the FDCA, the definition of ``food'' includes both articles
                used for food or drink and articles used for components of any such
                article. For instance, a raw agricultural commodity such as an apple
                constitutes food under FDCA. A processed item like a soup with the
                following ingredients--water, broccoli, vegetable oil, modified food
                starch, and wheat flour--is also a food, as are each of those
                ingredients. Other examples of ``food'' under the FDCA include dietary
                supplements, processing aids, and enzymes.
                 Not all food within the FDCA's definition falls within the scope of
                the NBFDS. The amended Act limits the disclosure to (1) food that is
                subject to the labeling requirements of the FDCA; or (2) food that is
                subject to the requirements of the three FSIS statutes previously
                mentioned, with certain exceptions. See 7 U.S.C. 1639a. As for the
                FDCA, which is under FDA jurisdiction, the NBFDS applies to all foods
                subject to its labeling requirements, including but not limited to raw
                produce, seafood, dietary supplements, and most prepared foods, such as
                breads, cereals, non-meat canned and frozen foods, snacks, desserts,
                and drinks. Distilled spirits, wines, or malt beverages as defined by
                the Federal Alcohol Administration Act (FAA Act) are foods under the
                FDCA but are not subject to the NBFDS because they are subject to the
                labeling provisions of the FAA Act rather than the labeling
                requirements of the FDCA. Alcoholic beverages not subject to the
                labeling provisions of the FAA Act, such as wines with less than seven
                percent alcohol by volume and beers brewed without malted barley and
                hops,
                [[Page 65816]]
                would be subject to the NBFDS. The amended Act also specifies that the
                NBFDS only applies to foods subject to the labeling requirements of the
                three FSIS statutes if the most predominant ingredient of the food
                would independently be subject to the labeling requirements under the
                FDCA; or if the most predominant ingredient of the food is broth,
                stock, water, or a similar solution and the second-most predominant
                ingredient of the food would independently be subject to the labeling
                requirements under the FDCA. See 7 U.S.C. 1639a(c)(2).
                 FDA's method of determining predominance relies on weight of the
                ingredients, as does FSIS's. The NBFDS uses the same methods FDA uses
                to determine predominance at 21 CFR 101.4(a)(1), which provides that
                ingredients required to be declared on the label or labeling of a food,
                including foods that comply with standards of identity, except those
                ingredients exempted by Sec. 101.100, shall be listed by common or
                usual name in descending order of predominance by weight on either the
                principal display panel or the information panel in accordance with the
                provisions of Sec. 101.2. Thus, a multi-ingredient food product that
                contains meat, poultry, or egg product (including beef broth, if
                identified as a composite ingredient), subject to the FMIA, the PPIA,
                or the EPIA, respectively, as the first ingredient of the ingredient
                list on the food label would not be subject to the NBFDS, per the
                amended Act.
                 A multi-ingredient food product that contains broth, stock, water,
                or similar solution as the first ingredient, and a meat, poultry, or
                egg product as the second ingredient on the food label would also not
                be subject to the NBFDS. For example, a canned stew where pork is the
                primary ingredient followed by other ingredients such as sweet corn,
                would not be subject to the NBFDS. The corn may be bioengineered, but
                pork, which is subject to the labeling requirements of the FMIA, is the
                predominant ingredient, so the canned stew product is not subject to
                the NBFDS, per the amended Act. If, however, a meat, poultry, or egg
                product is the third most predominant ingredient or lower, the food
                would be subject to the NBFDS. For example, a soup with the following
                ingredient list--broth, carrots, chicken, etc., would be subject to
                disclosure under the NBFDS, and the analysis as to whether it would be
                considered a ``bioengineered food'' subject to the NBFDS's disclosure
                requirements would continue.
                 Seafood, except Siluriformes (catfishes), and meats such as venison
                and rabbit are subject to the FDCA (but not the Federal Meat Inspection
                Act). Thus, a multi-ingredient food product that contains one of these
                as the first ingredient would be subject to the NBFDS. A multi-
                ingredient product that contained one of these as the second most
                predominant ingredient or lower, could also require disclosure, unless
                the product is otherwise exempt (for example, due to the predominance
                of another ingredient such as chicken or beef, as described above).
                C. Bioengineered Food
                 The amended Act delegates authority to the Secretary to establish
                the NBFDS regarding ``bioengineered food.'' 7 U.S.C. 1639b(a). This
                authority includes the ability to define ``bioengineered food,''
                consistent with the statutory provisions that address this term. The
                amended Act also authorizes the Secretary to determine other terms that
                are similar to ``bioengineering.'' 7 U.S.C. 1639(1).
                1. Definition of ``Bioengineering'' and ``Bioengineered Food''
                 The amended Act defines ``bioengineering'' with respect to a food
                as referring to a food ``(A) that contains genetic material that has
                been modified through in vitro recombinant deoxyribonucleic acid (DNA)
                techniques; and (B) for which the modification could not otherwise be
                obtained through conventional breeding or found in nature.'' 7 U.S.C.
                1639(1). In accordance with its statutory mandate and for purposes of
                consistency, AMS is directly incorporating this statutory definition
                into the definition of ``bioengineered food''.
                 The NPRM invited public comment on two different interpretations of
                the statutory definition of ``bioengineering'' and on the scope of the
                regulatory definition of ``bioengineered food.'' Specifically, comments
                were solicited on whether refined foods and ingredients should be
                subject to disclosure under the NBFDS.
                 The first interpretation, identified as Position 1 in the NPRM,
                stated that refined products do not ``contain genetic material that has
                been modified through in vitro recombinant deoxyribonucleic acid (DNA)
                techniques'' because the refining process rendered genetic material
                undetectable using common testing methods. The second interpretation,
                identified as Position 2 in the NPRM, stated that the scope of the
                definition of ``bioengineering'' applies to all foods produced from
                bioengineering, such as refined products.
                 AMS adopts Position 1 with some modifications. The statutory
                definition of ``bioengineering'' makes clear that food must ``contain[
                ] genetic material that has been modified through in vitro recombinant
                deoxyribonucleic acid (DNA) techniques . . .'' to be labeled as a
                ``bioengineered food.'' AMS believes that the definition of
                ``bioengineering'' sets forth the scope of the mandatory disclosure
                and, therefore, is incorporated into the definition of ``bioengineered
                food.'' A commenter suggested that AMS adopt a definition of ``highly
                refined'' if it adopts Position 1. We did not do so because the final
                rule does not use that term.
                 AMS has chosen to adopt the definition of ``bioengineered food''
                that hews closely to the plain language of the amended Act. This
                definition references Sec. 66.9 to explain how a regulated entity may
                demonstrate that a food, including a refined food ingredient, does not
                contain detectable modified genetic material. AMS has revised the
                proposed definition of ``bioengineered food'' to reflect its
                interpretation of the amended Act that foods with undetectable modified
                genetic material are not bioengineered foods.
                 Whether a food or food ingredient contains modified genetic
                material may vary depending on the refining process used to produce the
                food. For refined foods that are derived from bioengineered crops, no
                disclosure is required if the food does not contain detectable modified
                genetic material.
                 Commenters discussed how testing might be used to detect the
                presence of modified genetic material in a food. Some commenters stated
                that testing for modified genetic material would be difficult to
                enforce, expensive, and present barriers to international trade. These
                commenters stated that regulated entities may choose to make a BE
                disclosure rather than conduct testing, thereby resulting in different
                labels for similar food products.
                 Other commenters supported the use of testing to determine
                detectability and offered ideas regarding testing methods and standards
                to determine the presence or absence of detectable modified genetic
                material. A few commenters asked AMS to establish minimal standards
                regarding the analytical tools used for detecting, identifying, and
                quantifying modified genetic material. Some commenters also urged AMS
                to update the NBFDS as scientific detection methods evolve, and a few
                further recommended that AMS maintain publicly available guidance
                documents or lists of scientifically validated genetic testing methods
                to
                [[Page 65817]]
                ensure testing consistency in the marketplace.
                 AMS acknowledges there are multiple ways to determine whether a
                food or ingredient contains detectable modified genetic material.
                Because the amended Act authorizes examinations, audits, and similar
                activities with respect to records for enforcement of the NBFDS (7
                U.S.C. 1639b(g)(2)-(3)), AMS added provisions in Sec. 66.9 that
                describe how regulated entities can use records to demonstrate that
                modified genetic material is not detectable. Regulated entities are in
                the best position to know about the products they are sourcing and the
                refinement processes they have undergone. An entity's records,
                therefore, can be used to demonstrate that modified genetic material is
                not detectable.
                 First, as provided in Sec. 66.9(a)(1), regulated entities can
                demonstrate that modified genetic material is not detectable with
                records verifying that the food is sourced from a non-bioengineered
                crop or other food source, such as non-bioengineered salmon.
                 Second, as provided in Sec. 66.9(a)(2), regulated entities can
                demonstrate that modified genetic material is not detectable in the
                food with records verifying that the food has been subjected to a
                refinement process ``validated'' to render modified genetic material
                undetectable. Process validation for the purposes of the NBFDS can be
                achieved through laboratory testing, as provided in Sec. 66.9(b).
                Commenters stated that modified genetic material is undetectable when
                bioengineered crops are refined or processed under certain conditions.
                Commenters described the food refining and manufacturing process and
                explained the rigorous quality controls necessary to meet modern
                customer demands. Based on this information, AMS believes that once a
                refiner's process has been validated by testing to render modified
                genetic material undetectable, foods subjected to the same process in a
                defined, controlled, documented, and repeated way will also have no
                detectable modified genetic material. Regulated entities that produce
                or use refined foods may rely on processing records alone to prove the
                absence of detectable modified genetic material. In other words, foods
                subjected to the validated refining process would not require
                additional laboratory testing to prove the lack of modified genetic
                material.
                 To comply with NBFDS requirements, regulated entities can maintain
                records to verify the foods they use have been subjected to refining
                processes that have been validated to render modified genetic material
                undetectable. Such records may include customary processing records
                maintained in the normal course of business, as well as copies of the
                most recent analytical testing results used to validate the refining
                process. Section 66.9(c) provides standards of performance for
                analytical testing to validate that foods subjected to specific
                refining processes contain no detectable modified genetic material.
                 Third, as provided in Sec. 66.9(a)(3), regulated entities can
                demonstrate that modified genetic material is not detectable by
                maintaining certificates of analysis or other testing records
                appropriate to the specific food tested which confirm the absence of
                modified genetic material. As mentioned above and provided in Sec.
                66.9(c), AMS established performance standards related to detectability
                analyses for the purposes of the NBFDS.
                 AMS recognizes that some regulated entities may wish to disclose
                that their processed food is derived from a bioengineered source even
                when modified genetic material is not detectable in the food. In
                addition to the authority to establish the mandatory disclosure
                Standard, the amended Act at 7 U.S.C. 1639b(a)(2) grants the Secretary
                the authority to establish other requirements that are necessary to
                carry out the Standard. AMS has determined, based on numerous comments,
                that it is necessary for the Standard to include the ability for
                regulated entities to disclose voluntarily that their processed food
                was made with ingredients derived from a bioengineered source to
                provide a mechanism for regulated entities to provide information to
                consumers. This provision is discussed in more detail Section III.I.--
                Voluntary Disclosure, below.
                2. Conventional Breeding
                 AMS did not include a proposed definition of ``conventional
                breeding,'' a component term of the definition of ``bioengineering.''
                The NPRM solicited comments on whether such a definition should be
                included in the NBFDS, and if so, what it should be.
                 Many commenters recommended that AMS define ``conventional
                breeding'' within the NBFDS final rule, to better define the scope of
                NBFDS for regulated entities and consumers. Several commenters
                suggested various definitions, including adopting the definition used
                by FDA or from the Codex Alimentarius. Several commenters stated that
                the term ``conventional breeding'' is commonly understood in the
                industry and, therefore, does not need to be defined. Some of those
                commenters who did not support defining the term argued that any such
                attempts would be inherently confusing or misleading to consumers.
                 AMS finds no compelling reason to adopt a definition of
                ``conventional breeding'' at this time and agrees with commenters who
                advised not defining the term. AMS finds that ``conventional breeding''
                is a commonly understood term within industry and does not need to be
                defined. As techniques and technology evolve, any definition today
                could become unworkable or obsolete because it does not and could not
                anticipate those advancements. Foregoing defining the term allows AMS
                to respond to those challenges in real time.
                3. Found in Nature
                 AMS did not include a proposed definition of ``found in nature,''
                another component term of the definition of ``bioengineering.'' The
                NPRM solicited comments on whether such a definition should be included
                in the NBFDS, and if so, what it should be. The NPRM specifically
                requested comments on whether protections under intellectual property
                law might be considered when determining whether a genetic modification
                could be found in nature. Comments were also sought on other possible
                methods for determining whether a genetic modification could be ``found
                in nature.''
                 Commenters generally did not support defining or including the term
                ``found in nature'' within the NBFDS. Many of those in opposition
                believed the term ``found in nature'' itself was nebulous, misleading,
                and not adequately defined by science. Others argued that agriculture
                is inherently separate from nature. Of those that did request the term
                be defined, two common suggestions were ``spontaneously occurs in
                nature, such as natural biological evolution, and does not overcome
                natural physiological reproductive or combination barriers,'' or ``the
                kinds of genetic modifications which can occur in nature within the
                genome of an organism, without human intervention.''
                 One commenter was concerned that if definitions are deemed
                necessary, the definitions avoid setting precedents in other regulatory
                areas, and be kept as simple and as clear as possible. Another group of
                commenters stated that ``this should be done through a supplemental
                proposed rule that provides the public with an additional opportunity
                to provide public comments.''
                 Commenters mostly rejected the idea of using intellectual property
                law as a method of determination. Some of the
                [[Page 65818]]
                objections were that it would add more complexity to the NBFDS without
                any additional clarity; could create unintended disincentives towards
                development of non-BE foods; or is outside the scope of the NBFDS. One
                commenter supported the consideration of intellectual property law
                ``when appropriate, as one non-dispositive factor among others in
                making a determination.'' Another stated that the absence of a patent
                should not be a factor in determining if a modification can be found in
                nature, since it is not required to seek patents on BE food.
                 AMS finds it unnecessary to define the term ``found in nature.''
                AMS received no compelling arguments to define the term and believes
                that attempting to do so may cause confusion in light of the rapid pace
                of innovation. In addition, there was little support for relying on
                intellectual property law to inform decisions about whether specific
                modifications ``could not otherwise be found in nature.'' In order to
                incorporate technological changes in industry into this mandatory
                labeling standard, AMS believes it needs to retain maximum flexibility.
                That will not be accomplished by narrowly defining ``found in nature.''
                D. List of Bioengineered Foods
                 AMS has developed the List of Bioengineered Foods (List) to
                identify the crops or foods that are available in a bioengineered form,
                and to aid regulated entities considering whether they may need to make
                a BE disclosure. The List is provided in Sec. 66.6 of the Standard. As
                will be discussed later in Section III--Disclosure, a regulated
                entity's records will determine whether disclosure for that food is
                required under the NBFDS. The List includes bioengineered foods for
                human consumption that may be produced anywhere in the world. But the
                List should not be considered exhaustive, as new BE products continue
                to be developed. Even if a food is not on the List, regulated entities
                that have actual knowledge that a food they are selling is
                bioengineered, as defined in Sec. 66.1, must make appropriate
                disclosure of that food. The List will be maintained and updated as
                described later in this section.
                 The List of Bioengineered Foods replaces the two lists of
                commercially available bioengineered foods in the United States that
                AMS proposed in the NPRM. AMS proposed in the NPRM maintaining lists of
                ``highly adopted'' and ``non-highly adopted'' BE foods based on U.S.
                planted crop acreage.
                 While some commenters agreed that the lists might simplify
                compliance with the NBFDS, many recommended consolidating the two lists
                into one and expanding the consolidated list to include bioengineered
                foods produced in other countries to provide a more complete picture of
                the variety of foods produced through bioengineering. Commenters argued
                against equating U.S. planted acreage with human food production and
                commercial availability in the United States, explaining that a large
                percentage of highly adopted bioengineered crops are used for animal
                feed, and that U.S. planted acreage does not necessarily reflect the
                prevalence of bioengineered foods available on the market. Commenters
                further argued that commercial availability should not be a basis for
                regulation, because that attribute is not specified in the definition
                of BE food, and because commercial availability can vary from country
                to country, depending on how foods are approved for use.
                 For simplicity, AMS consolidated the two lists into one and
                expanded the consolidated List to include bioengineered crops and foods
                that may be produced in other countries. The List makes no presumptions
                about market share represented by bioengineered versions of those crops
                and foods in the United States. It merely provides information about
                what bioengineered crops and foods (including ingredients made from
                such foods), that meet the definition of ``bioengineered food'', could
                be offered for retail sale in the United States, based on information
                available to AMS. A crop or food may be included on the List, but not
                require disclosure under the NBFDS. For instance, not all apple
                varieties are bioengineered. Non-bioengineered apples would not require
                disclosure. As noted elsewhere, the amended Act requires each person
                subject to mandatory BE food disclosure under the NBFDS to maintain
                records such as the Secretary determines to be customary or reasonable
                in the food industry to establish compliance with the Standard. See 7
                U.S.C. 1639b(g)(2). The List establishes the need for recordkeeping by
                regulated entities who are using or selling the crops and foods on the
                List. Further, the List will aid regulated entities in deciding whether
                they may need to make a BE disclosure. Options for disclosure related
                to a regulated entity's records about foods on the List are described
                in Section III.A.5 and IV.A of this document.
                 To compile the lists that were proposed in the NPRM, AMS considered
                data published by the International Service for the Acquisition of
                Agri-biotech Applications (ISAAA),\2\ FDA's list of Biotechnology
                Consultations on Food from GE Plant Varieties (Consultations), and
                information published by USDA's Economic Research Service (ERS).\3\ AMS
                also considered input from industry stakeholders and consumers about
                which foods should be considered bioengineered and require disclosure
                labeling. Some commenters in response to the NPRM recommended that
                ISAAA be the sole source for information on international BE foods and
                the modifications that have been made to them. Some commenters said
                that foods should be added to the list as soon as any one of FDA's
                consultation processes are completed for that food. Other commenters
                suggested that additional sources of data on BE foods, such as
                Statistics Canada,\4\ should be considered, given the frequent exchange
                of foods between Canada and the U.S.
                ---------------------------------------------------------------------------
                 \2\ ISAAA (2016), Global Status of Commercialized Biotech/GM
                Crops: 2016. ISAAA Brief No. 52. ISAAA: Ithaca, NY. http://www.isaaa.org/resources/publications/briefs/52/default.asp, accessed
                February 5, 2018.
                 \3\ Economic Research Service (2017), Genetically engineered
                varieties of corn, upland cotton, and soybeans, by state and for the
                United States, 2000-17, Adoption of Genetically Engineered Crops in
                the U.S., https://www.ers.usda.gov/data-products/adoption-of-genetically-engineered-crops-in-the-us.aspx, accessed February 5,
                2018.
                 \4\ Statistics Canada, https://www.statcan.gc.ca/eng/start,
                accessed July 26, 2018.
                ---------------------------------------------------------------------------
                 Each of the recommended sources assists in the development and
                maintenance of the List; the List should represent a composite of
                information gathered from many sources. However, to be consistent in
                determining what crops or foods should be on the List, AMS has
                determined that the foods included on the initial List of Bioengineered
                Foods must meet the following criteria: (1) They are authorized for
                commercial production somewhere in the world, and (2) they are reported
                to be in legal commercial production for human food somewhere in the
                world. AMS relied on resources such as USDA reports and databases, and
                ISAAA reports and databases,\5\ to determine what crops and foods
                currently meet those criteria. The List attempts to capture any BE
                crops or foods that meet the statutory definition of
                ``bioengineering,'' based on existing technology, and that could
                potentially be offered for sale in the United States. AMS recognizes
                that there are other bioengineered foods that meet one of the criteria
                for list inclusion, but not both. For example, bioengineered rice has
                been authorized for production and use
                [[Page 65819]]
                as food in several countries, but AMS finds no evidence that it is
                currently in legal commercial production anywhere. Foods such as BE
                rice could be added to the List through the update process described
                below when available information suggests that it would be appropriate
                to do so.
                ---------------------------------------------------------------------------
                 \5\ ISAAA GM Approval Database: http://www.isaaa.org/gmapprovaldatabase/. Accessed August 10, 2018.
                ---------------------------------------------------------------------------
                 The considerations described above and the NBFDS definition for
                ``bioengineered food'' will be used to determine what foods would be
                added to or removed from the List moving forward. (See the Treatment of
                Technologies section, below.)
                 Section 66.1 of the NBFDS defines the List of Bioengineered Foods
                as a list maintained and updated by AMS of foods for which
                bioengineered versions have been developed. In the NPRM, AMS proposed
                to describe the initial List in the preamble to the final rule and to
                update the List by notice in the Federal Register with the opportunity
                for public comment. Given the impact of including foods on the List, we
                have determined that it is appropriate to incorporate the foods on the
                List in the final rule text to provide greater transparency. Further,
                AMS will update the List through rulemaking.
                 Information and data to support inclusion of each crop or food on
                the List come from a variety of reliable sources, including industry
                reports and academic and government sources. In some cases, the listed
                crop or food itself may not typically be considered human food, but it
                may be the source from which human food is made. For example, products
                made from field corn, such as grits, corn chips, corn tortillas, and
                corn cereal are human foods and may be subject to disclosure if they
                meet the definition of bioengineered food. The following foods comprise
                the List of Bioengineered Foods: alfalfa, apple (Arctic\TM\ varieties),
                canola, corn, cotton, eggplant (BARI Bt Begun varieties), papaya
                (ringspot virus-resistant varieties), pineapple (pink flesh), potato,
                salmon (AquAdvantage[supreg]), soybean, squash (summer), and sugarbeet.
                 Where practical, the List includes specific information about
                individual crops and foods, such as descriptions or trade names, to
                help distinguish bioengineered versions of those foods from their non-
                bioengineered counterparts, as requested by commenters. This
                specificity is intended to identify foods for which disclosure may be
                necessary, based on the regulated entities' records. For instance,
                although apples are on the List, most apple varieties are not known to
                be bioengineered. The List is narrowed by identifying the specific
                apples that are known to be bioengineered. As other BE versions of the
                listed foods are authorized and become legally available, AMS will
                revise such listings to be more generic during the annual update
                process.
                 Regulated entities may refer to the AMS website to obtain
                additional information regarding the associated bioengineered events
                for crops or foods they are sourcing and determine whether they need to
                make a disclosure. In some cases, trade names or other information may
                be provided to further simplify the identification and determination
                process for regulated entities. As well, information on the website may
                provide consumers additional details about traits (e.g., non-browning,
                pesticide resistance, virus resistance, enhanced growth, etc.) for
                which the foods have been bioengineered. Providing this detailed
                information is intended to help reduce burdens for regulated entities
                by narrowing the list of varieties of each food that may be
                bioengineered.
                1. List Maintenance and Revision
                 AMS proposed in the NPRM that the List be subject to review and
                update on an annual basis, allowing for public input into the process.
                AMS also proposed an 18-month compliance period following List updates
                to allow for food label revisions in response. Such a schedule was
                proposed to minimize the frequency with which regulated entities would
                be required to update food labels, if, for instance, new BE foods were
                added to the List. Some commenters urged AMS to revise the List more
                frequently to avoid delay providing current information to consumers.
                Others suggested updates should occur less frequently than proposed to
                minimize the impact on small businesses that might have to change
                labels accordingly. Some commenters asked that the compliance period
                for revising labels be shortened, and others asked that it be extended.
                 The NPRM described a process to update the List on an annual basis.
                The final rule adopts that process, except that AMS will also initiate
                rulemaking to amend the List as appropriate. As described in Sec.
                66.7(a), AMS will announce the annual review through the Federal
                Register and on the AMS website. Interested parties may submit
                recommendations about foods that could be added to or deleted from the
                List at any time, including in response to the request for
                recommendations that accompanies the review notice. Recommendations
                should include data or other information to support those
                recommendations. AMS will publish any recommendations, along with
                supporting information, on its website and request comments on the
                recommendations.
                 Following a review of available information, including consultation
                with Federal Government agencies that comprise the Coordinated
                Framework or any successor body, AMS will make a determination on
                whether to initiate rulemaking to amend the List. Section 66.7(b)
                provides an 18-month compliance period from the effective date of any
                revision to the List to allow regulated entities time to revise
                existing food labels if needed.
                 While the List of Bioengineered Foods identifies the foods for
                which regulated entities must maintain records and that may be required
                to bear a BE disclosure, the List and the records kept do not alleviate
                a regulated entity's responsibility for disclosure when the entity has
                actual knowledge that its food is a BE food. Under Sec. 66.109, a
                regulated entity with actual knowledge that it is using BE food is
                responsible for disclosing BE foods, even if the food is not listed on
                the List of Bioengineered Foods. This section does not require
                regulated entities to seek out that information, but they also cannot
                ignore or be willfully blind to information that the food they are
                sourcing is in fact bioengineered.
                2. Treatment of Technologies
                 Technologies continue to evolve, and food produced through a
                specific technology may or may not meet the definition of BE food.
                Respondents to the 30 questions urged AMS to determine whether foods
                developed through certain emerging technologies would be within the
                scope of the definition of BE food. However, AMS proposed in the NPRM
                that the products of technology, rather than solely the technology
                itself, should be evaluated to determine whether a food meets the BE
                food definition and might require disclosure. AMS proposed to provide
                for the consideration of new technologies used to develop foods during
                the process of reviewing and revising the List pursuant to Sec.
                66.7(a). AMS proposed to do so through consultation with the U.S.
                Government agencies responsible for oversight of the products of
                biotechnology--USDA-APHIS, EPA, FDA, and appropriate members of the
                Coordinated Framework for the Regulation of Biotechnology. In that way,
                AMS could understand whether foods resulting from new technologies
                would meet the definition of ``bioengineered food'' and should be added
                to the List. Conversely, foods may be removed from the List if they are
                no
                [[Page 65820]]
                longer produced from a technology that meets the definition of
                ``bioengineered food.'' In other cases, some varieties may meet the
                definition, while others do not.
                 Comments in response to the NPRM ranged from those commenters who
                urged that the scope of the NBFDS should reflect the use of all current
                and emerging technologies to those who argued that some new genetic
                engineering techniques would fall outside the scope of the statutory
                definition. AMS continues to believe that determinations about what
                constitutes BE food for the purposes of the NBFDS should focus
                primarily on the characteristics of foods that have been produced using
                bioengineering as defined in the amended Act, and whether such foods
                meet the definition of ``bioengineered food.'' Thus, as proposed, the
                products of new technologies will be considered during reviews and
                updates of the List of Bioengineered Foods.
                E. Factors and Conditions
                 As described in the proposed rule, in promulgating a regulation to
                carry out the Standard, the amended Act directs the Secretary to
                establish a process for requesting and granting a determination by the
                Secretary regarding other factors and conditions under which a food is
                considered a BE food. 7 U.S.C. 1639b(b)(2)(C). The amended Act does not
                specify the process by which the Secretary will determine other factors
                and conditions under which a food is considered a BE food; rather, it
                provides the Secretary with discretion in setting up such a process.
                 Commenters were generally supportive of the proposed process for
                adopting factors or conditions under which a food is considered a BE
                food, and AMS is adopting the proposed process described in the NPRM.
                Subpart C describes the process by which people can submit a request or
                petition for a determination regarding other factors or conditions. The
                acceptance of a request or petition for determination regarding a
                factor or condition would then culminate in rulemaking to incorporate
                the factor or condition into the ``bioengineered food'' definition.
                Rulemaking allows for transparency and public participation in
                determining whether or not the definition of ``bioengineered food''
                should be amended. Ultimately, the impact of adopting the proposed
                factors or conditions (as follows) would be to limit the scope of the
                definition of ``bioengineered food,'' thus potentially excluding
                certain products from disclosure.
                 Under Sec. 66.200, the determination process begins with the
                submission of a request or petition for determination regarding other
                factors and conditions under which a food is considered a BE food in
                accordance with Sec. 66.204. Section 66.204 describes the process for
                submitting a request or petition, including where to send the
                submission. The submission needs to include a description and analysis
                of the requested new factor or condition and any supporting documents
                or data. Section 66.204 describes how to properly mark confidential
                business information that may be included to support the request, to
                ensure its confidentiality. Finally, Sec. 66.204 instructs that the
                submission must explain how the standards for consideration apply to
                the requested factor or condition.
                 Section 66.202 describes the standards for consideration by which
                the Secretary's designee, the AMS Administrator, would evaluate the
                request or petition. Given the existing statutory definition of
                ``bioengineering,'' the first standard, in paragraph (a), requires the
                requested factor or condition to be within the scope of the definition
                of ``bioengineering'' in 7 U.S.C. 1639(1). The second standard, in
                paragraph (b), requires the Administrator to evaluate the cost of
                implementation and compliance. In applying this second standard, the
                Administrator will evaluate the cost related to the factor or
                condition, the difficulty for affected regulated entities to implement
                the factor or condition, especially small businesses, and the
                difficulty AMS would have in monitoring compliance with the factor or
                condition. Paragraph (c) allows the Administrator to consider other
                relevant information as part of the evaluation. Relevant information
                for a particular proposed factor or condition will include its
                compatibility with the food labeling requirements of other Federal
                agencies or foreign governments. In determining compatibility with
                other requirements, AMS will consult with the U.S. Government agencies
                responsible for oversight of the products of biotechnology: USDA-APHIS,
                EPA, and FDA. Such information may allow AMS to align the NBFDS with
                the standards of other Federal agencies or foreign governments, which
                may facilitate interstate commerce and trade by allowing for
                recognition of compatible standards.
                 The Administrator will also consult with the United States Trade
                Representative (USTR) and the Department of State to ensure the request
                or petition regarding other factors and conditions related to BE
                disclosure requirements results in implementation in a manner
                consistent with international trade obligations as mandated by 7 U.S.C.
                1639c(a). If the Administrator determines that the request or petition
                satisfies the standards for consideration, AMS will initiate rulemaking
                that seeks to amend the definition of ``bioengineered food'' in Sec.
                66.1 to include the factor or condition.
                 Some commenters asked AMS to clarify in the final rule the
                parameters for submitting petitions to adopt factors or conditions. A
                few commenters asked AMS to establish a specific time period within
                which the agency would respond to requests for adoption of factors or
                conditions, as well as a time period for regulated entities to attain
                compliance with adopted factors or conditions.
                 AMS has made no changes to the submission parameters in connection
                with requests or petition for factors and conditions, as we believe
                they are clear and transparent. AMS has not established a time period
                within which the agency will respond to requests for adoption of
                factors or conditions because such responses will vary depending on
                agency resources, the complexity of the submitted request for adoption
                of factors or conditions, and the nature of implementing regulation.
                Similarly, AMS has not provided a time period for regulated entities to
                attain compliance with adopted factors and conditions in subpart C, as
                adopted factors and conditions act as carve outs from the statutory
                definition of bioengineering such that compliance with the adopted
                factor or condition should not be burdensome. To the extent that the
                adopted factors or conditions would be burdensome or require additional
                time for compliance, AMS would address any compliance period in future
                rulemakings considering the specific adopted factors and conditions.
                 In the NPRM, AMS proposed two submitted requests for factors and
                conditions under which a food is considered a BE food. Those requests
                involved (1) whether incidental additives present in food should be
                considered ``bioengineered food'' and labeled accordingly; and (2)
                whether the modified genetic material in a refined food may be
                detected. The impact of adopting these factors or conditions will be to
                limit the scope of the definition of ``bioengineered food,'' thus
                potentially excluding certain products from disclosure.
                [[Page 65821]]
                1. Incidental Additives
                 The first factor or condition concerns a BE food that is an
                incidental additive. As described in 21 CFR 101.100(a)(3), incidental
                additives that are present in food at an insignificant level and do not
                have any technical or functional effect in the food are exempt from
                certain labeling requirements under the FDCA. Commenters in response to
                AMS's 30 questions requested that incidental additives not be subject
                to disclosure under the proposed NBFDS because they are exempt from
                inclusion in the ingredient statement on a food label, according to 21
                CFR 101.100(a)(3). AMS is aware that an ingredient that is required to
                be listed in the ingredient list in one product may be used in another
                product as an incidental additive that is not required to be included
                in the ingredient list. Under this factor or condition, such an item
                will only trigger disclosure when it is used as an ingredient that is
                included on the ingredient list, not when used as an incidental
                additive.
                 Application of this factor or condition falls within the scope of
                the definition of ``bioengineering'' in 7 U.S.C. 1639(1), and thus
                meets the first standard for consideration. This factor or condition
                will also satisfy the second standard for consideration--cost of
                implementation and compliance. Aligning the disclosure requirements of
                the NBFDS with the ingredient declaration requirements under applicable
                FDA regulations will simplify compliance and reduce labeling costs for
                regulated entities. Finally, AMS finds it relevant that adoption of
                this factor or condition would be compatible with the food labeling
                requirements of other Federal agencies and some foreign governments.
                 The impact of adopting this proposed factor or condition as not
                being within the definition of ``bioengineered food'' is to exclude
                certain incidental additives from disclosure. Based on public comments
                on the 30 questions and the NPRM, AMS believes adopting this factor or
                condition may exempt a number of enzymes that are currently used in
                food production but not currently listed in the ingredient statement on
                a food label. However, based on those same comments, AMS is aware that
                some enzymes may be used in a manner that requires them to be labeled
                on the ingredient statement. In the NPRM, AMS sought comment on
                whether, more generally, enzymes present in food should be considered
                ``bioengineered food.''
                 AMS has made no changes to this factor and condition regarding
                incidental additives under which products can be excluded from
                disclosure. The amended Act provides the Secretary with authority to
                limit disclosure in certain circumstances. The factors and conditions
                process offers a fair and rational method by which to consider various
                proposals. For the reasons mentioned, AMS believes that exempting
                incidental additives from BE disclosure that are not required to be
                labeled per FDCA regulations is sensible, in alignment with the
                labeling requirements of other trading partners and will limit the
                burden on regulated entities without unduly limiting disclosure for
                consumers.
                 Some commenters sought modifications to the text of this provision
                clarifying what ``insignificant'' means or clarifying the types of
                incidental additives that are not subject to disclosure. AMS does not
                believe such clarification is necessary. The provision references the
                FDA regulations that AMS relied upon in drafting the provision. That
                FDA regulation describes the circumstances in which incidental
                additives are not labeled as an ingredient. Title 21 CFR 101.100(a)(3)
                provides an exemption for incidental additives that are present in a
                food at insignificant levels and do not have any technical or
                functional effect in that food. For the purposes of Sec.
                101.100(a)(3), incidental additives are:
                 Substances that have no technical or functional effect
                but are present in a food by reason of having been incorporated into
                the food as an ingredient of another food, in which the substance
                did have a functional or technical effect.
                 Processing aids, which are as follows:
                 [cir] Substances that are added to a food during the processing
                of such food but are removed in some manner from the food before it
                is packaged in its finished form.
                 [cir] Substances that are added to a food during processing, are
                converted into constituents normally present in the food, and do not
                significantly increase the amount of the constituents naturally
                found in the food.
                 [cir] Substances that are added to a food for their technical or
                functional effect in the processing but are present in the finished
                food at insignificant levels and do not have any technical or
                functional effect in that food.
                 Substances migrating to food from equipment or
                packaging or otherwise affecting food that are not food additives as
                defined in section 201(s) of the act; or if they are food additives
                as so defined, they are used in conformity with regulations
                established pursuant to section 409 of the act.
                 Section 101.100(a)(3)(i), (ii), and (iii) provide a list of
                incidental additives that are not required to be labeled under FDA
                regulations and by extension are not required to be disclosed as BE
                foods. AMS believes that the cross-reference to the FDA regulations is
                clear.
                 With respect to treatment of yeasts, enzymes, or any other
                microorganisms, AMS agrees that if they qualify as incidental additives
                that are not required to be labeled as ingredients on a food label,
                then they do not require disclosure as BE foods. However, bioengineered
                yeasts, enzymes, and other organisms that do not qualify as incidental
                additives that are not required to be labeled as ingredients may
                require disclosure as BE foods unless they meet the requirements of
                another provision (for instance, by establishing that their modified
                genetic material is not detectable). AMS cannot make a categorical
                exemption for microorganisms in this final rule; however, such an
                exemption is possible through the factors and conditions process in
                future rulemakings.
                2. Undetectable Modified Genetic Material
                 The NPRM also sought comment on another proposed factor and
                condition--excluding food from the disclosure standard where the
                modified genetic material in the food cannot be detected. As the NPRM
                noted, if AMS ultimately proceeded with Position 2 and presumed that
                refined ingredients are bioengineered foods, this factor or condition,
                if adopted, would be a means to potentially exclude products where
                modified genetic material cannot be detected. As discussed above, AMS
                did not adopt Position 2, so this factor or condition is not
                incorporated into the final rule. The definition of ``bioengineered
                food'' in the final rule already excludes foods where modified genetic
                material is not detectable.
                F. Exemptions
                 The amended Act includes two express exemptions to the disclosure
                requirement: For food served in a restaurant or similar retail food
                establishment and for very small food manufacturers. 7 U.S.C.
                1639b(b)(2)(G). The amended Act also authorizes the Secretary to
                ``determine the amounts of a bioengineered substance that may be
                present in food, as appropriate, in order for the food to be a
                bioengineered food.'' 7 U.S.C. 1639b(b)(2)(B). As well, the amended Act
                prohibits food derived from an animal to be considered a BE food solely
                because the animal consumed feed produced from, containing, or
                consisting of a bioengineered substance. 7 U.S.C. 1639b(b)(2)(A).
                Finally, Subtitle F specifies that the certification of food under
                USDA's National Organic Program (7 CFR part 205) shall be
                [[Page 65822]]
                considered sufficient to make claims about the absence of
                bioengineering in the food. 7 U.S.C. 6524. Section 66.5 incorporates
                each of these as regulatory exemptions in the NBFDS.
                1. Food Served in a Restaurant or Similar Retail Food Establishment
                 Section 66.5(a) exempts food served in a restaurant or similar
                retail food establishment from disclosure under the NBFDS. In the NPRM,
                Sec. 66.1 defined ``similar retail food establishment'' as a
                cafeteria, lunch room, food stand, saloon, tavern, bar, lounge, other
                similar establishment operated as an enterprise engaged in the business
                of selling prepared food to the public, or salad bars, delicatessens,
                and other food enterprises located within retail establishments that
                provide ready-to-eat foods that are consumed either on or outside the
                retailer's premises. This definition is consistent with the definition
                of ``food service establishment'' included in other labeling programs
                authorized by the amended Act. See 7 U.S.C. 1638(3) and the regulations
                at 7 CFR 60.107 and 7 CFR 65.140, with minor modifications.
                 The NPRM solicited comments on the scope of this definition. Some
                commenters stated that restaurants should not be exempt from the NBFDS
                because it would undermine the transparency and consistency important
                to consumers who want to know the origins of their food. Other
                commenters supported the exemption generally and AMS's proposed
                definition. Other commenters stated that AMS's proposed definition was
                too narrow and should include a list of places as examples, rather than
                an exclusive list, such as cafeteria, lunch room, food stand, food
                truck, saloon, tavern, bar, lounge, salad bar, delicatessen,
                entertainment venue, or other retail business establishment where meals
                or refreshments constituting food may be purchased. One commenter
                requested that transportation carriers be added to the list of places
                exempted from the NBFDS.
                 Another commenter stated that all foods prepared, processed, or
                packaged in the retail food establishment, including those utilizing
                ``central kitchen'' locations for certain prepared foods, should be
                exempt from the disclosure requirement and that the term ``packaged''
                should conform to 21 CFR 1.20, FDA's general food labeling
                requirements.
                 Based on the comments received, AMS has modified the definition of
                ``similar retail food establishment'' to add additional examples,
                including food truck and transportation carrier. AMS considered
                including a list of places as examples, rather than an exhaustive list,
                but believes that the reference to ``other similar establishment
                operated as an enterprise engaged in the business of selling prepared
                food to the public'' should capture any additional places that are not
                specifically listed. To clearly address a point of confusion observed
                in the comments received, AMS is clarifying that salads, soups, and
                other ready-to-eat items prepared by grocery stores are exempt from the
                disclosure requirements.
                 AMS has not modified the definition to state ``where meals or
                refreshments constituting food may be purchased,'' as we believe that
                with this insertion the exemption would be much broader than the plain
                meaning of the amended Act. AMS believes that the exemption is intended
                to cover ready-to-eat or prepared foods. To extend the exemption to all
                foods prepared, processed, or packaged in a retail food establishment,
                which would include bulk foods such as granola or apples in a bin,
                would conflict with the requirement that foods subject to FDCA's
                labeling requirements are subject to disclosure. The modified
                definition provides clarity and flexibility to regulated entities and
                is in accordance with the plain language of the amended Act.
                2. Very Small Food Manufacturers
                 Section 66.5(b) exempts very small food manufacturers from the
                disclosure requirement of the NBFDS. Section 66.1 defines ``very small
                food manufacturer'' as a food manufacturer with annual receipts of less
                than $2.5 million. To develop this definition, AMS considered FDA's
                exemptions or special labeling requirements for certain food if the
                food is offered for sale by certain persons who have annual gross sales
                made or business done in sales to consumers that are not more than
                $500,000 under certain conditions (see 21 CFR 101.9(j)(1)(i) and
                101.36(h)(1)) and U.S. Census Bureau (USCB) regulations. AMS evaluated
                the impact of applying various definitions of ``very small food
                manufacturer'' by estimating the number of firms that would be
                exempted, the number of products that would likely be exempt, and the
                proportion of annual industry sales that would be exempt under each
                exemption level. The NPRM included the following tables showing the
                cumulative percentage of firms, products (UPCs), and sales that would
                be exempt if the definition of ``very small food manufacturer'' were
                set at the top of each of the annual revenue ranges (based on USCB's
                2012 Statistics of U.S. Businesses).
                 Food Manufacturers
                ----------------------------------------------------------------------------------------------------------------
                 Cumulative Cumulative Cumulative
                 percent of percent of percent of
                 Establishment receipts threshold (in $) firms exempt products sales exempt
                 (%) exempt (%) (%)
                ----------------------------------------------------------------------------------------------------------------
                https://www.regulations.gov/document?D=AMS-TM-17-0050-8861.
                 \7\ Public comment submitted by the Rutgers School of
                Environmental and Biological Sciences reports their June-July 2018
                survey regarding consumer perceptions related to the proposed
                disclosure options in the NPRM. Comment may be accessed at https://www.regulations.gov/document?D=AMS-TM-17-0050-14011.
                ---------------------------------------------------------------------------
                 The adopted symbol is a circle with a green circumference, with the
                word ``bioengineered'' displayed at the top and the bottom of the outer
                ring. The bottom portion of the circle contains an arch, filled in
                green to the bottom of the circle. The arch contains two light green
                terrace lines, sloping downward from left to right. On the left side of
                the arch, near the left side of the circle, is a stem arching towards
                the center of the circle, ending in a four-pointed starburst. The stem
                has two leaves coming from the upper side of the stem and pointing
                towards the top of the circle. At the top of the circle, to the left of
                center, in the background of the leaves, is a portion of a yellow
                circle that resembles a sun. The remainder of the circle is filled in
                light blue, resembling the sky.
                 Commenters recognized that a multi-colored product label can
                increase printing costs and disrupt product design in other ways.
                Therefore, like the USDA Organic seal under the NOP, AMS will allow
                regulated entities to use a black and white version of the symbol.
                Regardless of colors, the symbol is required to meet the appearance and
                placement requirements in Sec. 66.100. A supplemental document to this
                final rule contains the symbol in full color, as well as another
                variation of the symbol incorporating the words ``derived from
                bioengineering'' (for voluntary disclosure discussed below). The
                document may be viewed in the docket for this rulemaking at
                regulations.gov and on the AMS website.
                D. Electronic or Digital Link Disclosure
                 The third disclosure option available for regulated entities to use
                is an electronic or digital link disclosure. 7 U.S.C. 1639b(b)(2)(D)
                and 1639b(d). The amended Act requires that the use of an electronic or
                digital link to disclose BE food must be accompanied by the
                [[Page 65828]]
                statement ``Scan here for more food information'' or equivalent
                language that reflects technological changes. 7 U.S.C. 1639b(d)(1).
                This statutory requirement is incorporated in Sec. 66.106(a)(1). AMS
                recognizes that electronic and digital links currently used on food
                products in the marketplace take different forms, and the amended Act
                allows for equivalent statements that reflect technological changes.
                Current technology includes, among others, quick response (QR) codes
                that are detectable by consumers and digital watermark technology that
                is imperceptible to consumers but can be scanned anywhere on a food
                package using a smart phone or other device. These technologies may or
                may not include an embedded Uniform Resource Locator (URL).
                Consequently, AMS will allow for other alternative statements that can
                appear above or below an electronic or digital link to direct consumers
                to the link to the BE food disclosure. Examples of other statements
                include: ``Scan anywhere on package for more food information,'' or
                ``Scan icon for more food information.'' The statement will provide the
                shopper with clear instructions on how to utilize an electronic device
                to scan a food package to obtain information about the bioengineered
                content of the food.
                 Section 66.106(a)(2) incorporates the amended Act's requirement
                that the electronic or digital disclosure be accompanied by a telephone
                number that a consumer can call to access the disclosure information. 7
                U.S.C. 1639b(d)(4). If a regulated entity decides to utilize electronic
                or scannable technology to convey bioengineered food information, they
                must also provide options for the consumer to access the disclosure by
                calling a phone number. There must be clear instructions for the
                shopper to ``Call [1-000-000-0000] for more food information.'' Many
                commenters explained how certain consumers do not understand how to
                utilize certain scannable technology to access food disclosure
                information. AMS believes that requiring regulated entities who are
                disclosing bioengineered food information through scannable means to
                offer the option to call a telephone number will best provide for
                accessible and understandable food information.
                 The telephone number must be available at all times of the day and
                must clearly provide bioengineered food information to the caller. Pre-
                recorded information is permitted. The telephone number and instruction
                must be located in close proximity to the electronic or digital link.
                 The amended Act requires the electronic or digital link to provide
                the bioengineering disclosure on the first product information page
                accessed through the link, without any marketing and promotional
                information. 7 U.S.C. 1639b(d)(2). Section 66.106(b) incorporates this
                requirement. ``Marketing and promotional information'' means ``any
                written, printed, audiovisual, or graphic information, including
                advertising, pamphlets, flyers, catalogues, posters, and signs that are
                distributed, broadcast, or made available to assist in the sale or
                promotion of a product.'' This definition aligns with that in the NOP
                regulations at 7 CFR 205.2. If a regulated entity wants to provide
                additional information about BE food to consumers, the information
                should be provided outside of the landing page that includes the BE
                food disclosure.
                 Based on commenter suggestions to ensure reliable, consistent
                disclosure information to consumers, AMS is requiring that the
                disclosure on the product information page conform to the requirements
                of the text disclosure in Sec. 66.102 or the symbol disclosure in
                Sec. 66.104. AMS believes that using a uniform, consistent approach to
                the disclosure language and symbol will make it easier for consumers to
                understand the disclosure, whether that language or symbol appears on a
                food label or an electronic or digital device. AMS also believes that
                this approach will make compliance easier for entities responsible for
                disclosure, and ensure consistency in the communication of required
                disclosure information.
                 If the regulated entity chooses to use an electronic or digital
                link, the amended Act requires that the entity not collect, analyze, or
                sell any personally identifiable information about consumers or their
                devices. 7 U.S.C. 1639b(d)(3)(A). Under Sec. 66.106(b)(4), if such
                information must be collected to fulfill the disclosure requirements,
                that information must be deleted immediately and not used for any other
                purpose. 7 U.S.C. 1639b(d)(3)(B).
                E. Study on Electronic or Digital Disclosure and a Text Message
                Disclosure Option
                 The amended Act requires the Secretary to conduct a study to
                identify potential technological challenges that may impact whether
                consumers would have access to the bioengineering disclosure through
                electronic or digital disclosure methods. 7 U.S.C. 1639b(c)(1). The
                Department contracted with Deloitte Consulting LLP to perform the
                study, received the study results from Deloitte Consulting LLP on July
                27, 2017, and made the study available to the public on September 6,
                2017, at https://www.ams.usda.gov/reports/study-electronic-or-digital-disclosure.
                 As required by the amended Act, the study considered five factors:
                The availability of wireless internet or cellular networks; the
                availability of landline telephones in stores; challenges facing small
                retailers and rural retailers; the efforts that retailers and other
                entities have taken to address potential technology and infrastructure
                challenges; and the costs and benefits of installing in retail stores
                electronic or digital link scanners or other evolving technologies that
                provide bioengineering disclosure information. 7 U.S.C. 1639b(c)(3).
                The amended Act also requires the Secretary, after consultation with
                food retailers and manufacturers, to provide additional and comparable
                options to access the bioengineering disclosure, should the Secretary
                determine that consumers, while shopping, would not have sufficient
                access to the bioengineering disclosure through electronic or digital
                disclosure methods. 7 U.S.C. 1639b(c)(4).
                 Several commenters agreed that the challenges described in the
                study prevented consumers from accessing electronic or digital
                disclosures. Other commenters noted that smartphone usage and broadband
                access were increasing in the United States. After reviewing the study
                and comments submitted to the NPRM related to the study, the Secretary
                has determined that consumers would not have sufficient access to the
                bioengineering disclosure through electronic or digital means under
                ordinary shopping conditions at this time. While a large number of
                Americans have a smartphone and a large number of national and regional
                supermarkets provide Wi-Fi, most consumers in the study experienced
                technical challenges in accessing the bioengineered food disclosure on
                their phones.
                 The NPRM proposed text message as an additional disclosure option
                if the Secretary were to determine that shoppers would not have
                sufficient access to digital or electronic disclosure. Food
                manufacturers and retailers that commented on this option were
                generally supportive of this option. Thus, AMS is adopting the text
                message option in Sec. 66.108. Regulated entities that choose this
                option are required to include a statement on the package that
                instructs consumers on how to receive a text message. Those
                instructions can be shared or centralized among regulated entities, if
                so desired. Industry is not prohibited from developing a
                [[Page 65829]]
                standardized instruction or response if it is in compliance with the
                NBFDS regulations. A one-time automated response would immediately
                provide the disclosure using text in conformance with Sec. 66.102.
                Similar to the electronic or digital disclosure, the text message is
                not allowed to contain marketing and promotional information. The
                regulated entity must not collect, analyze, or sell any personally
                identifiable information, unless necessary to complete the disclosure,
                or use any information related to the text message for marketing
                purposes. If the regulated entity must collect any personally
                identifiable information to complete the disclosure process, it must
                immediately delete the information and not use it for any other
                purpose. Additionally, consumers must not be charged a fee by the
                regulated entity to access the disclosure information. However,
                consumers may be subject to a text messaging fee charged through their
                wireless telephone carrier.
                F. Small Food Manufacturers
                 The amended Act provides two additional disclosure options for
                small food manufacturers: (1) A telephone number accompanied by
                appropriate language to indicate that the phone number provides access
                to additional information; and (2) an internet website address. 7
                U.S.C. 1639b(b)(2)(F)(ii). In addition, in the case of small food
                manufacturers, the amended Act provides that the implementation date
                not be earlier than one year after the implementation date for
                regulations promulgated in accordance with the NBFDS. See 7 U.S.C.
                1639b(b)(2)(F)(i).
                1. Definition
                 AMS has made very minor changes to the definition of small food
                manufacturer. AMS defines ``small food manufacturer'' as ``any food
                manufacturer with annual receipts of at least $2,500,000 but less than
                $10,000,000.'' This definition is similar to FDA's final rule to extend
                the compliance dates for manufacturers with less than $10 million in
                annual food sales (see 83 FR 19619).
                 Section 66.110 provides two additional options that are available
                to small food manufacturers in addition to the text, symbol, electronic
                or digital link, or text message disclosure options. The two options
                are disclosure by telephone number and by internet website.
                2. Telephone Number
                 Under Sec. 66.110(a), if a small food manufacturer chooses to use
                a telephone number to disclose the presence of a BE food or BE food
                ingredients, a compliant text accompanying the telephone number is
                ``Call [1-000-000-0000] for more food information.'' The telephone
                number should provide the BE food disclosure regardless of the time of
                day. Disclosure via telephone number must include a BE food disclosure
                information that is consistent with Sec. 66.102 in audio form and can
                be pre-recorded. While some commenters suggested that a telephone
                disclosure at any time of day would be burdensome and unreasonable, AMS
                believes that the requirement to provide the BE food disclosure at any
                time of day is reasonable, given the different hours that consumers
                shop for groceries and the varying time zones in the United States.
                Because the disclosure by telephone can be accomplished through a
                recorded message, AMS does not believe that requiring the disclosure to
                be available at any time of day will increase the burden on small food
                manufacturers.
                3. Internet Website
                 Under Sec. 66.110(b), if the small food manufacturer chooses to
                use an internet website to disclose the presence of BE food or BE food
                ingredients, text would need to accompany the website address on the
                label stating, ``Visit [Uniform Resource Locator of the website] for
                more food information.'' The website must meet the requirements for a
                product information page in Sec. 66.106(b). Disclosure via website
                must include a bioengineered food disclosure that is consistent with
                Sec. 66.102 or Sec. 66.104 in written form. AMS believes that
                implementing the internet website option for small food manufacturers
                in conformance with the requirements for the electronic or digital
                disclosure product information page will give small food manufacturers
                the flexibility to disclose in a way that is cost effective for a small
                business, while providing disclosure to consumers and the same level of
                protection for personally identifiable information.
                G. Small and Very Small Packages
                 The amended Act requires the Secretary to provide alternative
                reasonable disclosure options for food contained in small or very small
                packages. 7 U.S.C. 1639b(b)(2)(E). In order to ensure consistency with
                existing labeling requirements, the definition of ``small packages''
                was taken from FDA labeling requirements at 21 CFR 101.9(j)(17). The
                definition of ``very small package'' was also taken from FDA labeling
                requirements at 21 CFR 101.9(j)(13)(i). Section 66.112 continues to
                provide certain flexibilities for food in small and very small
                packages: A modified version of the electronic or digital link
                disclosure in Sec. 66.106; a modified version of the text message in
                Sec. 66.108; and a modified version of the phone number disclosure in
                Sec. 66.110. In addition, for very small packages, regulated entities
                may use a label's preexisting Uniform Resource Locator or telephone
                number for disclosure.
                 For the modified version of the electronic or digital link, Sec.
                66.112(a) allows regulated entities to utilize the electronic or
                digital link in Sec. 66.106, but replace the statement ``Scan here for
                more food information'' and the accompanying phone number and
                instructions required in paragraph (a) of that section with the
                statement ``Scan for info.'' AMS believes that shortening the statement
                may make the electronic or digital link disclosure small enough to fit
                on small and very small packages.
                 For the modified version of the text message, Sec. 66.112(b)
                allows regulated entities to utilize the text message in Sec. 66.108,
                but replace the statement ``Text [number] for more bioengineered food
                information'' with ``Text [number] for info.'' AMS believes that
                shortening the statement may make the text message disclosure small
                enough to fit on small and very small packages. Similarly, AMS believes
                that a phone number with a short statement is small enough to fit on
                small and very small packages. Section 66.112(c) requires the
                disclosure to meet the requirements of Sec. 66.110, but allows the
                statement ``Call [1-000-000-0000] for more food information'' to be
                replaced with ``Call [1-000-000-0000] for info.''
                 AMS recognizes that very small packages have limited surface area
                on which to bear disclosures. Under Sec. 66.112(d), for very small
                packages, if the label includes a preexisting Uniform Resource Locator
                for a website or a telephone number that a person can use to obtain
                other food information, that website or telephone number may also be
                used for the BE food disclosure, provided that the disclosure is
                consistent with Sec. 66.102 or Sec. 66.104 in written or audio form,
                as applicable.
                 Stakeholders representing food manufacturers who use small and very
                small packages indicated that using the symbol under Sec. 66.104 is a
                viable disclosure option. Accordingly, the symbol and other disclosure
                options available to all entities responsible for disclosure are also
                available to those who package foods in small and very small packages.
                AMS believes providing the additional options described above will
                provide needed flexibility for
                [[Page 65830]]
                disclosure on small and very small food packages.
                H. Food Sold in Bulk Containers
                 Because bulk products, such as cornmeal in a bin or unpackaged
                produce, are frequently displayed without packaging and placed on
                display by retailers, rather than food manufacturers or importers, AMS
                requires that retailers be held responsible for complying with the BE
                food disclosure of bulk food. AMS already requires bulk foods sold in
                grocery stores to comply with Country of Origin Labeling requirements
                and believes that retailers are already accustomed to ensuring that
                bulk food appears with appropriate signage.
                 As requested by several commenters, Sec. 66.114(a) requires that
                the BE food disclosure on bulk foods appears using any of the options
                for on-package disclosure including: Text, symbol, electronic or
                digital link, or text message (if applicable). The disclosure is
                required to appear on signage or other materials (stickers, bindings,
                etc.) on or near the bulk item. AMS believes the requirement that the
                signage or materials include the disclosure will allow consumers to
                identify and understand the bioengineered status of the food and allow
                retailers to adapt to new technologies and consumer preference.
                Retailers who use an electronic or digital link will be required to
                place any sign or image to be scanned in a place readily accessible by
                consumers. For all other disclosure options, signs currently used on or
                near bulk items, when supplemented with the BE food disclosure, are
                sufficient to comply with the requirements of the amended Act.
                I. Voluntary Disclosure
                 AMS received significant input on the proposed NBFDS regarding the
                ability for regulated entities to voluntarily label foods not subject
                to mandatory BE disclosure requirements. Comments from food companies
                explained that consumers expect transparency and as much information as
                possible on the origin of food ingredients. Comments from consumers
                agreed. AMS acknowledges that voluntary disclosure provisions enable
                food manufacturers, retailers, and other entities to share more
                information with consumers, provided the information is truthful and
                not misleading and otherwise in compliance with all applicable Federal
                laws.
                 In designing the NBFDS, which is focused on positive disclosure
                claims, AMS has attempted to provide as much flexibility to the food
                and grocery industry as possible, along with the transparency to
                consumers that they expect and deserve. As such, the final rule
                provides for voluntary labeling (1) by entities that are otherwise
                exempt from the requirements of the NBFDS or (2) for certain foods that
                do not meet the definition of ``bioengineered food'' but are derived
                from bioengineered crops or food. Voluntary labeling is only permitted
                in these circumstances.
                 Entities that are exempt from the NBFDS are very small food
                manufacturers, and restaurants and similar retail food establishments.
                Under Sec. 66.116(a) those entities may voluntarily include a
                bioengineered disclosure on their products in the same manner as those
                that are required to provide a BE disclosure.
                 Under Sec. 66.116(b), regulated entities may voluntarily include a
                disclosure for foods or food ingredients derived from items on the List
                of Bioengineered Foods. A food that meets a factor or condition under
                paragraph (2) of the definition of ``bioengineered food'' in Sec. 66.1
                or is exempt from disclosure under Sec. Sec. 66.5(c)-(e), is
                prohibited from voluntary disclosure under the NBFDS. For example, a
                soup that lists beef broth as the first ingredient on the ingredient
                list may not bear a voluntary disclosure regardless of the other
                ingredients in the soup. Voluntary labeling provisions are found in
                Sec. 66.116.
                 As described earlier in this final rule, only products that contain
                ingredients with detectable modified genetic material, as demonstrated
                through records maintained by the regulated entity, must be disclosed.
                This means that many refined products originating from bioengineered
                crops do not constitute bioengineered foods. However, if a food
                manufacturer, retailer, or importer that would otherwise not be
                required to provide a disclosure wants to voluntarily disclose that a
                refined food originates from an item on the List of Bioengineered
                Foods, it is free to do so. For example, if a beverage company makes a
                carbonated soda containing corn syrup originating from BE corn, and the
                corn syrup does not have detectable modified genetic material, the corn
                syrup alone does not trigger mandatory disclosure. Under voluntary
                labeling provisions, because the corn syrup originates from BE corn,
                the beverage company may provide a disclosure explaining to the
                consumer that the ingredients in the soda are ``derived from
                bioengineering,'' even though the ingredient is not for the purposes of
                this regulation considered to be ``bioengineered.''
                 AMS believes that exempt entities should also be permitted to
                voluntarily disclose bioengineered foods. For instance, AMS believes
                that very small food manufacturers, who are entities with less than
                $2.5 million in annual receipts and who are exempt from mandatory
                disclosure requirements, should also be able to voluntarily disclose
                the presence of bioengineered ingredients, or ingredients originating
                from bioengineered crops. If a very small food manufacturer is using
                items on the List of Bioengineered Foods that contain modified genetic
                material and the food would be subject to mandatory disclosure
                requirements but for the company size exemption, they may provide a
                disclosure as provided in Sec. 66.116(a). If a very small food
                manufacturer is using ingredients that do not contain modified genetic
                material but are derived from items on the List of Bioengineered Foods,
                they also may utilize the voluntary disclosure rules explained in Sec.
                66.116(b).
                 It is important to note that when entities utilize the voluntary
                disclosure provisions in Sec. 66.116, they are required to comply with
                the disclosure requirements (size, location on package, etc.) for text,
                symbol, digital or electronic link, or text message disclosure, as
                applicable.
                IV. Administrative Provisions
                A. Recordkeeping Requirements
                 The amended Act requires each person subject to mandatory BE food
                disclosure under the NBFDS to maintain records such as the Secretary
                determines to be customary or reasonable in the food industry to
                establish compliance with the Standard. See 7 U.S.C. 1639b(g)(2).
                Persons required to keep such records include food manufacturers,
                importers, and retailers who label bulk foods or package and label
                foods for retail sale. Section 66.302(a)(1) therefore requires that
                regulated entities maintain customary or reasonable records to
                demonstrate compliance with the BE food disclosure requirements. So
                long as the records contain sufficient detail as to be readily
                understood and audited as set forth in Sec. 66.302(a)(2), each entity
                subject to the disclosure requirement may decide for itself what
                records and records management protocols are appropriate, given the
                scope and complexity of individual businesses, as well as the food
                being produced. AMS notes that regulated entities, both domestic and
                foreign, will likely have customary or reasonable records in accordance
                with the NBFDS if they are maintaining records in compliance with
                [[Page 65831]]
                other laws or regulations associated with the food sector.
                 In general, comments in response to the proposed recordkeeping
                requirements in the NPRM supported AMS's proposals. Commenters agreed
                that the recordkeeping requirements of the NBFDS should be consistent
                with those under other AMS marketing programs so as not to present an
                unreasonable burden to entities who must comply with the Standard.
                Commenters observed that the recordkeeping requirements as proposed
                would probably not impose additional costs or burdens to existing
                business practices. Commenters provided examples of typical records
                generated in the course of business that should satisfy the audit
                requirements under Sec. 66.402 to verify compliance with disclosure
                requirements under the NBFDS. Commenters suggested that the regulation
                include examples of appropriate records an entity might maintain to
                meet the recordkeeping requirements. Commenters supported the proposed
                flexibility that would allow for record maintenance in the format
                preferred by the entity. Commenters also supported the proposed two-
                year record retention period, consistent with the recordkeeping
                requirements under other USDA and FDA regulations.
                 AMS agrees that recordkeeping and compliance requirements under the
                NBFDS should be consistent with those under other AMS programs, such as
                NOP and PACA, and has incorporated elements from each of those programs
                into the NBFDS. Accordingly, Sec. 66.302 does not specify the records
                regulated entities must maintain to demonstrate compliance with the
                disclosure regulations. Instead, as with other AMS programs, regulated
                entities are free to determine for themselves which of their customary
                business records will demonstrate compliance and should be maintained.
                Section 66.302(a)(4) includes a non-exhaustive list of records that
                could satisfy the recordkeeping requirements of the NBFDS. That list
                includes: Supply chain records, bills of lading, invoices, supplier
                attestations, labels, contracts, brokers' statements, organic
                certifications, laboratory testing results, validated process
                verifications, and other records generated or maintained by the
                regulated entity in the normal course of business. If records
                demonstrate that a product originates from a country where BE food is
                not commercially grown, those records are sufficient to justify lack of
                disclosure and demonstrate compliance with the NBFDS. Section
                66.302(a)(2) provides that records can be in paper or electronic format
                at the discretion of the regulated entity. Section 66.302(a)(3)
                requires that records be maintained for at least two years beyond the
                date the food or food product is sold or distributed for retail sale.
                 As noted above, the amended Act requires that each person subject
                to mandatory BE food disclosure under the NBFDS must maintain records.
                In this regard, as noted in section 66.302(b), the List of
                Bioengineered Foods identifies the foods for which regulated entities
                must maintain records and that may be required to bear a BE disclosure,
                based on what the records show. Consistent with the statutory
                requirement, where the regulated entity has actual knowledge that the
                food or food ingredient is bioengineered, the regulated entity must
                maintain records for that food or food ingredient, even if the food is
                not on the List of Bioengineered Foods.
                 Some comments in response to the NPRM opposed requiring entities
                who do not handle BE foods to maintain records to verify compliance
                with the regulation. Other comments supported AMS's proposal to do so,
                explaining that all regulated entities subject to the disclosure
                standard should be required to keep the same kind of records. AMS
                agrees that all food manufacturers, importers, and retailers who offer
                for retail sale foods on the List of Bioengineered Foods are considered
                regulated entities for purposes of the NBFDS insofar as they may be
                required to make BE food disclosures. Their customary business records
                should be able to satisfy an audit to determine whether they are in
                compliance with the disclosure requirements of the NBFDS.
                 The amended Act requires each person subject to the disclosure
                requirements of the NBFDS to give the Secretary access to records to
                establish compliance with the disclosure requirements upon request.
                Accordingly, Sec. 66.304 sets forth the provisions for AMS's access to
                records.
                 AMS proposed in the NPRM that entities would have five business
                days to provide records to AMS upon request, unless AMS extends the
                deadline. AMS also proposed to provide prior notice of at least three
                business days if we need to access the records at the entity's place of
                business. Finally, AMS proposed that it would examine the records
                during normal business hours and that entities should make their
                records available during those times.
                 Commenters generally supported the proposed five- and three-day
                timeframes for the production of records and access to records at the
                entity's place of business, respectively. Some commenters suggested
                that because the NBFDS is a marketing standard rather than a food
                safety regulation, longer timeframes for records production would be
                appropriate. AMS believes that the timelines for records production and
                access are appropriate for enforcing compliance with the NBFDS and
                notes that flexibility is provided in the regulation to extend
                deadlines if necessary. Commenters requested that regulated entities be
                allowed to maintain records at locations most convenient for each
                business. AMS agrees that entities can maintain records at the location
                that best serves the entity's business needs.
                 Accordingly, Sec. 66.304(a) provides that the entity must provide
                records to AMS within five business days of AMS's request, unless AMS
                extends the deadline. Section 66.304(b) provides that AMS will give at
                least three business days' notice if it needs access to records at the
                entity's place of business. As well, AMS will examine records during
                normal business hours, and records should be made available during
                those times. Finally, entities must provide AMS access to facilities
                necessary for records examinations. As proposed in the NPRM, Sec.
                66.304(c) specifies that if an entity fails to give AMS access to
                records as required, the result of the examination or audit will be
                that the entity did not comply with the requirement to provide access
                to records and that AMS could not confirm whether the entity is in
                compliance with the disclosure standard of the NBFDS.
                B. Enforcement
                 The amended Act specifies that failure to make a BE food disclosure
                as required by the NBFDS is prohibited. See 7 U.S.C. 1639b(g)(1).
                Section 66.400 of the NBFDS captures this prohibition. The amended Act
                authorizes AMS to enforce compliance with the standard only through
                records audits and examinations, hearings, and public disclosure of the
                summary of the results of audits, examinations, and similar activities.
                See 7 U.S.C. 1639b(g)(3). The amended Act further states that the
                Secretary shall have no authority to recall any food subject to the
                NBFDS ``on the basis of whether the food bears a disclosure that the
                food is bioengineered.'' See 7 U.S.C. 1639b(g)(4).
                 AMS considered responses to the 30 questions when developing the
                proposed enforcement provisions of the NBFDS, and many suggestions were
                incorporated into the proposal. Accordingly, the NPRM outlined a
                [[Page 65832]]
                process for receiving complaints about possible violations of the
                disclosure standard and set forth a records audit procedure. As
                provided in the amended Act, AMS proposed to review the records of
                regulated entities during audits and examinations to verify compliance
                with the NBFDS's disclosure requirements. Provisions for making
                findings and allowing for appeals hearings in response to the findings
                were proposed. Finally, provision was made for publicizing the results
                of audits, examinations, and hearings.
                 As with responses to the 30 questions, comments on the proposed
                NBFDS enforcement provisions reflected a range of opinions about how
                AMS should enforce compliance with the NBFDS. Many suggested that AMS
                conduct regularly scheduled or unannounced records audits. Others
                supported conducting audits and examinations in response to complaints.
                Some commenters called for the imposition of heavy fines or other
                penalties for non-compliance, while others agreed that publicizing the
                results of audits and hearings would be adequate enforcement for this
                marketing regulation. Several commenters requested that records related
                to product formulations and formulas remain confidential.
                 As pointed out in the NPRM, the amended Act does not authorize
                civil penalties for violations of the NBFDS, and AMS believes some of
                the other enforcement suggestions to be impractical. Therefore, the
                enforcement provisions of the NBFDS reflect those proposed in the NPRM,
                with one exception. Comments in response to the NPRM suggested that AMS
                provide greater clarity about the process for filing complaints about
                potential violations of the disclosure standard. Paragraph (a) of Sec.
                66.402 is revised to include greater specificity about the complaint
                process. The remainder of Sec. 66.402 continues to describe the
                process for initiating records audits or examinations, including
                providing notice of such activities, making the audit or examination
                findings available to the regulated entity, and providing for appeals
                to object to the findings. Section 66.404 provides that within 30 days
                of receiving the results of an audit or examination of its records, the
                regulated entity that objects to the findings may request a hearing by
                filing a request and submitting a response to the findings, along with
                any supporting documents, to AMS. AMS may allow the entity to make an
                oral presentation, after which the AMS Administrator may revise the
                findings of the audit or examination. Section 66.406 provides that AMS
                will make public the summary of the final results of the audit,
                examination, or similar activity, and that such final results
                constitute final agency action for purposes of judicial review of the
                matter. AMS agrees that the confidential business records, including
                product formulations and recipes, should not be disclosed.
                C. Effective, Implementation, and Compliance Dates
                 Because this rule is a major rule, the effective date will be
                February 19, 2019 to comply with the Congressional Review Act. The
                proposed rule included an initial compliance date of January 1, 2020,
                and a delayed compliance date of January 1, 2021, for small food
                manufacturers, as mandated by the amended Act. AMS received several
                comments on the compliance date, some of which supported the proposed
                dates, while others sought earlier or later dates.
                 After considering input from commenters and other available
                information, AMS recognized that regulated entities should have
                sufficient time to transition their recordkeeping and labeling
                processes and procedures to implement the BE disclosure requirements
                and that the transition should be completed in phases. Section 66.13
                sets forth the implementation and compliance dates for the NBFDS. The
                final rule establishes implementation dates of January 1, 2020, for
                regulated entities other than small food manufacturers and January 1,
                2021, for small food manufacturers. Regulated entities should begin
                implementing the NBFDS no later than those dates by identifying the
                foods that will need to bear a BE disclosure, the records necessary to
                meet the recordkeeping requirements, and the type of BE disclosure they
                will use on their products.
                 Following the implementation dates, the final rule establishes a
                mandatory compliance date and a voluntary compliance period. Mandatory
                compliance begins on January 1, 2022, and all regulated entities must
                comply with the requirements of the NBFDS beginning on that date. For
                regulated entities that can and would like to do so, the final rule
                provides for a voluntary compliance period that ends on December 31,
                2021. We believe this phased approach balances the needs of consumers
                to have access to information about bioengineered foods they may
                purchase with the cost and burdens to regulated entities in complying
                with the NBFDS requirements.
                D. Use of Existing Label Inventories
                 In an effort to reduce costs and burdens, AMS proposed in the NPRM
                to allow regulated entities to use up food labels that are printed by
                the initial compliance date, regardless of whether the existing labels
                comply with the NBFDS, until the remaining label inventories are
                exhausted or until January 1, 2022, whichever comes first. Comments in
                response to the NPRM generally reflected two viewpoints. Consumers and
                consumer groups claimed that manufacturers could theoretically continue
                printing and using non-compliant labels for up to six years after the
                Act was amended to require mandatory BE food disclosure. Those
                commenters urged AMS to allow a shorter compliance period for label
                use-up. Food manufacturer comments generally supported the proposed
                label use-up provision, but they asked that the final rule provide a
                two-year compliance period after the compliance date, rather than
                specifying a hard date, to allow for regulatory delays. Manufacturer
                commenters also urged AMS to allow the use of labels compliant with the
                preempted State GMO labeling laws during the compliance period. Some
                commenters recommended that AMS allow entities to apply stickers or ink
                stamp disclosures to existing labels to reduce waste. Others suggested
                that AMS incorrectly assumes manufacturers maintain large label
                inventories, asserting that manufacturers order labels in the smallest
                batches economically practical.
                 As discussed above, AMS is providing a period of voluntary
                compliance until December 31, 2021, with mandatory compliance to begin
                on January 1, 2022. With this voluntary compliance period, it is not
                necessary to provide for regulated entities to be able to use its
                existing label inventories. Thus AMS is not adopting this component of
                the proposed rule. However, in response to comments regarding this
                proposal, regulated entities may use labels that are compliant with
                preempted State labeling laws during the voluntary compliance period.
                They may also apply stickers or ink stamp disclosures to existing
                labels. The sticker or printing cannot cover any other mandatory
                labeling, such as nutrition facts.
                V. Comments on the NPRM
                 AMS received approximately 14,000 comments in response to the NPRM.
                We received comments from individuals, consumer groups, companies, and
                organizations that represent different segments of the food industry.
                We
                [[Page 65833]]
                review and respond to the comments below.
                1. Definition of ``Food''
                 In the NPRM, AMS described how it would implement the statutory
                definition of ``food'' in the amended Act and how the disclosure
                requirements would intersect with the FDCA, the FMIA, the PPIA, and the
                EPIA.
                 Comment: Many commenters supported the proposed definition of
                ``food.'' Some commenters disagreed with how predominance was
                determined for meat, poultry, and egg products for purposes of BE food
                disclosure. Some commenters stated that the final rule should adopt the
                labeling approach used by FSIS and determine the ingredient
                predominance based on weight of ingredients so as not to confuse
                companies and consumers. Other commenters noted that FDA permits
                composite and component labeling in ingredient declaration statements.
                 AMS Response: AMS notes that FDA and FSIS use the same method for
                determining predominance of ingredients by weight. Thus, we agree that
                the predominance determination for meat, poultry, and egg products
                should be based on weight. As FDA permits both composite and component
                labeling, AMS also will permit such ingredient declaration labeling.
                 Comment: Several commenters pointed out that because most seafood
                products are subject to the FDCA, BE seafood would be subject to
                disclosure. However, catfish and related species would not require
                disclosure because they fall under the FMIA. Commenters stated that
                this will cause consumer confusion and the rule should be reworded to
                require all seafood products that contain BE ingredients to be labeled.
                 AMS Response: AMS acknowledges that there may be consumer confusion
                if the industry develops a BE catfish and it may not be subject to
                disclosure, depending on its predominance on the ingredient list, while
                other BE seafood would be. However, the amended Act clearly sets forth
                how food subject to the FMIA are to be disclosed and AMS does not have
                the statutory authority to expand disclosure beyond what those
                statutory provisions provide.
                 Comment: Several commenters opposed limiting the definition of
                ``food'' to food for human consumption and sought to include food for
                animal consumption to be included.
                 AMS Response: We appreciate that several commenters would like to
                extend the BE disclosure to food for animals. The amended Act, however,
                clearly limits the mandatory disclosure requirements to food for human
                consumption and AMS does not have the statutory authority to require BE
                disclosure for food for animal consumption on a mandatory or voluntary
                basis.
                2. Definition of ``Bioengineered Food''
                 AMS requested public comments on the definition of ``bioengineered
                food.'' The statutory definition of bioengineering describes food that
                ``contains genetic material that has been modified through in vitro
                recombinant deoxyribonucleic acid (DNA) techniques.'' In the NPRM, we
                proposed two interpretations of this definition; Position 1 proposed
                that highly refined products do not contain genetic material that has
                been modified through in vitro recombinant deoxyribonucleic acid (rDNA)
                techniques and therefore are not bioengineered food, while Position 2
                proposed that all foods produced from bioengineering, including refined
                and highly refined products, are bioengineered food.
                 Comment: Several commenters supported Position 1. Those commenters
                concluded that, in general, highly refined foods and ingredients do not
                meet the statutory definition of ``bioengineering,'' and thus, are not
                subject to the labeling requirements because they lack rDNA. Many of
                those commenters cited several scientific studies they viewed as
                demonstrating an absence of genetic material in such foods. Some
                commenters also noted that the proposed regulation governs the food
                product, not the source plant from which the food was produced.
                 AMS Response: Because some countries previously established BE food
                labeling requirements, the industry recognized the need for
                standardized methods for the detection of rDNA. Technical Committee 34
                (TC 34) ``Food Products'' of the International Organization for
                Standardization (ISO) developed numerous validated sampling and
                detection methods to detect rDNA in food products.\8\ Subcommittee 16
                (SC 16) established the ``Horizontal methods for molecular biomarker
                analysis'' in 2008. ISO/TC 34/SC 16 published 19 ISO standards and has
                17 additional standards under development. The established detection
                methods are generally carried out in accordance with the ISO/ICE
                17025:2017 standard and validated according to Codex Alimentarius
                guidelines.
                ---------------------------------------------------------------------------
                 \8\ ISO (2018) https://www.iso.org/committee/560239.html.
                ---------------------------------------------------------------------------
                 These methods are crop and event specific and most rely on
                quantitative Polymerase Chain Reaction (PCR). In general, the detection
                methods are most effective when applied to raw agricultural commodities
                because the DNA remains relatively intact; many types of food
                processing (e.g. heating) serve to degrade and eliminate DNA.
                 Screening of raw agricultural commodities (e.g. seeds, leaves and
                roots) for rDNA is routinely conducted by the global grain and food
                industries in order to maintain identity preserved supply chains. After
                testing at the commodity level, identity is generally preserved through
                records rather than through additional testing after processing. This
                is practical since methodology for detection of rDNA at the commodity
                level is well established; applying these same methods to refined
                ingredients and processed foods can be much more challenging.
                 The Pauli study attempted to extract DNA from 55 common foodstuffs
                derived from soybean, corn, potato, rice, sugar beet, tomato and
                wheat.\9\ They were able to extract some DNA from most of the
                foodstuffs, but were not able to extract any DNA from refined sugar and
                oil.\10\ Whether rDNA can be detected in processed foods will depend on
                the specific processing conditions for each food ingredient. The
                Greiner study analyzed 100 foods derived from BE corn and 100 foods
                derived from BE soybean; they were able to detect rDNA in 13% of the
                soy products and 8% of the maize products.\11\ The Orlandi study
                evaluated 63 products derived from BE corn, but only detected rDNA in
                four of the products, all of which were taco shells.\12\ The Arun study
                found that detectability of rDNA in cookies varied with cooking time
                and cooking temperature.\13\
                ---------------------------------------------------------------------------
                 \9\ Pauli et al. (2000) Extraction and amplification of DNA from
                55 foodstuffs. Mitteilungen aus Lebensmitteluntersuchung und
                Hygiene. 91:491-501 (Pauli study).
                 \10\ In this study, the scientists were simply extracting total
                DNA, and any rDNA, if present, would be a minute fraction of the
                total DNA extracted.
                 \11\ Greiner et al. (2005) Qualitative and quantitative
                detection of genetically modified maize and soy in processed foods
                sold commercially in Brazil by PCR-based methods. Food Control 16:
                753-759 (Greiner study).
                 \12\ Orlandi et al. (2002) Analysis of Flour and Food Samples
                for cry9C from Bioengineered Corn. J Food Protection 65:426-431
                (Orlandi study).
                 \13\ Arun et al. (2016) The effect of heat processing on PCR
                detection of genetically modified soy in bakery products. J Health
                and Food Sci. 2:130-139 (Arun study).
                ---------------------------------------------------------------------------
                 When refining food ingredients from agricultural inputs, the
                objective is often to produce ingredients with a high degree of purity.
                Therefore, it is not
                [[Page 65834]]
                surprising that the industrial processes developed for the refining of
                sugars and oils effectively eliminate the majority of undesired
                substances, including DNA and protein. Several published studies have
                demonstrated that genetic material is not detectable in refined beet
                sugar or refined cane sugar.\14\ One study reported detection of rDNA
                in raw cane sugar, but not in refined cane sugar; \15\ however, the
                Cheavegatti-Gianotto study did not detect rDNA in raw sugar. One
                commenter noted that raw cane sugar is not intended for human
                consumption; rather it is intended as a feedstock for refining white
                cane sugar. Therefore, all five published studies referred to above
                reached the same conclusion, that DNA could not be detected in refined
                sugar.
                ---------------------------------------------------------------------------
                 \14\ See Cheavegatti-Gianotto et al. (2018) Lack of Detection of
                Bt Sugarcane Cry1Ab and NptII DNA and Proteins in Sugarcane
                Processing Products Including Raw Sugar. Front Bioeng Biotechnology.
                27:24 (Cheavegatti-Gianotto study); Joyce et al. (2013) Sugar from
                genetically modified sugarcane: Tracking transgenes, transgene
                products and compositional analysis. International Sugar Journal.
                pp. 861-863; Klein et al. (1998) Nucleic acid and protein
                elimination during the sugar manufacturing process of conventional
                and transgenic sugar beets. J Biotech 60, 145-153; Oguchi et al.
                (2008) Investigation of Residual DNAs in Sugar from Sugar Beet (Beta
                vulgaris L.). J. Food Hyg. Soc. Japan. 50:41-46.
                 \15\ Cullis et al. (2014) DNA and Protein Analysis throughout
                the Industrial Refining Process of Sugar Cane. Science Target 3:1-
                15.
                ---------------------------------------------------------------------------
                 The sugar refining process from sugar beet or sugarcane juice that
                has been extracted by pressing or diffusion, then clarified and
                evaporated, results in sucrose of 99.9% purity. Several of these
                refining steps involve heating which serves to degrade DNA.
                Additionally, prior to crystallization, lime is used to remove the
                impurities remaining in the sugar juice; DNA and protein are
                effectively removed at this step in the sugar refining process. Based
                on the available scientific evidence, several countries (e.g.
                Australia, Brazil, Japan, Israel, New Zealand and South Korea) have
                exempted refined sugar from their respective BE food labeling
                requirements.
                 Food grade vegetable oils can be derived from a variety of BE crop
                sources (e.g. corn, soybean, and canola) and can be refined with a
                variety of methods (e.g. chemical vs. physical refining). The
                detectability of rDNA may vary by crop and by refining method.
                Substances present in raw vegetable oil are removed by steps such as
                degumming, neutralizing, bleaching, deodorizing, and dewaxing.
                 The Pauli study was unable to extract DNA from refined oil. Another
                study was unable to detect rDNA in refined soybean oil; they observed
                degradation of DNA during degumming and concluded that degumming was
                the most important step in removing DNA when refining soybean oil.\16\
                However, one study was able to detect rDNA in refined soybean oil.\17\
                These variable results may be due to differences in refining processes;
                some oil refining processes may effectively eliminate all DNA, while
                others, such as cold pressing, are unlikely to eliminate all DNA.
                Similar to refined sugar, several countries (e.g. Australia, Brazil,
                Japan, Israel, New Zealand and South Korea) have exempted refined
                vegetable oils from their respective BE food labeling requirements.
                ---------------------------------------------------------------------------
                 \16\ Gryson et al. (2002) Detection of DNA during the refining
                of soybean oil. JAOCS, Vol. 79, 171-174.
                 \17\ Costa et al. (2010) Monitoring GM soybean along the
                industrial soybean oil extraction and refining processes by PCR
                techniques. Food Research Intl 43:301-306.
                ---------------------------------------------------------------------------
                 The studies cited above, as well as similar studies provided by
                some commenters demonstrate for many refined food products and
                ingredients, the refining process removes the genetic material so that
                it can no longer be detected. If the genetic material is not detected,
                then it is not possible to conclude that the food product or ingredient
                contains modified genetic material. Thus, based on the available
                scientific evidence, refined beet and cane sugar, high fructose corn
                syrup, degummed refined vegetable oils and various other refined
                ingredients are unlikely to require BE food disclosure because the
                conditions of processing serve effectively to degrade or eliminate the
                DNA that was initially present in the raw agricultural commodity.
                 Comment: Many commenters supported the labeling of all foods
                produced through bioengineering including refined oils, sugars and
                starches. They believed processed foods originating from BE raw
                agricultural commodities should be considered bioengineered food,
                regardless of whether modified genetic material remains detectable in
                the final product. Some commenters did not believe disclosure should
                rely only on the detection of genetic material in a food, or food
                ingredient, or solely on specific test methods like PCR. Commenters
                noted that scientific methods may advance to where today's
                ``undetectable'' genetic material may be detectable using future
                technologies. In support of this position, commenters cited several
                studies documenting the evolution of our ability to detect previously
                undetectable bioengineered products.
                 AMS Response: AMS appreciates commenters' position on disclosing
                foods produced through bioengineering. AMS has adopted the statutory
                definition of ``bioengineering,'' which makes clear that food must
                ``contain genetic material that has been modified through in vitro rDNA
                techniques . . .'' to be labeled as a ``bioengineered food.'' Highly
                refined products have undergone processes that removed genetic material
                such that it cannot be detected using common testing methods. As such,
                the NBFDS will not require disclosure for refined products that do not
                contain modified genetic material. Regulated entities who do not
                disclose such products would maintain records that substantiate their
                claim that the products do not contain modified genetic material. As
                described in the Preamble and in Sec. 66.9, regulated entities can
                demonstrate that their food products do not contain modified genetic
                material in multiple ways.
                 AMS maintains that the products of technology, rather than the
                technology itself, should determine whether a food meets the BE food
                definition and requires disclosure unless exempted from disclosure
                pursuant to Sec. 66.5. We also recognize that emerging technologies
                could impact the list of foods requiring disclosure. As such, AMS
                provides for the consideration of new technologies used to develop
                foods during the process of reviewing and revising the List of
                Bioengineered Foods.
                 We recognize that testing methodology may evolve so that a future
                test may detect modified genetic material in a food ingredient that
                current tests do not. The definition of ``bioengineered food'' accounts
                for this possible evolution. If the modified genetic material in that
                food ingredient becomes detectable under Sec. 66.9 in the future, the
                food ingredient would be subject to BE disclosure.
                 Comment: Some commenters supported the inclusion of highly refined
                ingredients and foods, such as oils and sugars derived from
                bioengineered crops, in the mandatory disclosure standard (Position 2).
                Some commenters who supported Position 2 viewed it as being consistent
                with the FDA's guidance to manufacturers entitled, ``Voluntary Labeling
                Indicating Whether Foods Have or Have Not Been Derived from Genetically
                Engineered Plants.'' Commenters considered detection of genetic
                material in the food immaterial to its exemption from the Standard.
                Instead, they justified their position based on consumer interest and
                popular understanding of how common BE agricultural crops are grown,
                not whether the food or ingredient contains modified genetic material.
                These
                [[Page 65835]]
                commenters proposed that a narrow focus on the presence of genetic
                material creates a differentiation based on rDNA that some could use to
                imply a safety issue with the rDNA. Commenters further suggest such
                implied issues could lead consumers to believe foods and food
                ingredients containing genetic material are different in a way that
                necessitates informing consumers.
                 AMS Response: AMS appreciates commenters' interest in the new
                Standard and their efforts to be transparent and build consumer trust.
                As stated in the previous comment response, AMS has adopted the
                statutory definition of bioengineering. That definition focuses on the
                products of technology, rather than the technology itself. For this
                rule, the presence or absence of detectable modified genetic material
                in a final food product determines in part whether a food meets the BE
                food definition and might require disclosure. AMS reiterates that
                nothing in the disclosure requirements set out in this final rule
                conveys information about the health, safety, or environmental
                attributes of BE food as compared to non-BE counterparts. The
                regulatory oversight by USDA and other Federal government agencies
                ensures that food, including that produced through bioengineering,
                meets all relevant Federal health, safety, and environmental standards.
                 AMS values transparency and consumer interests. AMS recognizes that
                some regulated entities may wish to disclose that their refined foods
                (that do not contain modified genetic material and thus are not
                bioengineered foods) are derived from bioengineering. Accordingly, AMS
                has provided for voluntary disclosure of such foods.
                 Comment: One commenter supported Position 2 suggesting that non-BE,
                identity-preserved, or certified organic crops and products can offer a
                price premium and new or additional market access--domestic and
                international--to producers. These commenters maintain that disclosing
                all BE foods would improve these farmers' market transparency, while
                exemption will require added costs for coexistence, segregation and
                detectability testing.
                 AMS Response: AMS agrees that it is possible that some marketing
                claims may offer a price premium or new market access. AMS has adopted
                Position 1 with some modifications. For further details on our
                rationale for adopting this position, see Section II.C.1 of this rule.
                With the adoption of Position 1, foods with undetectable modified
                genetic material are not bioengineered foods. Accordingly, regulated
                entities need not disclose such foods as bioengineered foods. AMS has
                determined that regulated entities can establish that their foods do
                not contain detectable rDNA through their records of the foods on the
                List of Bioengineered Foods.
                 Comment: Some commenters suggested a broad interpretation of the BE
                definition and scope accounting for existing technologies like CRISPR
                and TALENS, as well as for future developments. The interest of these
                commenters was to prevent confusion among consumers and in the
                international marketplace if the NBFDS failed to harmonize the law with
                existing standards--FDA, Codex Alimentarius, and USDA Certified
                Organic, all of which include gene editing and gene silencing
                techniques (e.g. sequence-specific nucleases, meganucleases, zinc
                finger nuclease, CRISPR-Cas system, TALENs, oligonucleotide directed
                mutagenesis RNAi, RNAi pesticides, and RNA-dependent DNA methylation).
                Commenters cited USDA's General Counsel Jeffrey M. Prieto, who stated
                that it is well within USDA's authority under Public Law 114-216 to
                mandate a broad interpretation. Another commenter was concerned that a
                failure to further define bioengineering could lead to state preemption
                concerns. The commenter stated that preemption, as intended by the BE
                Food Disclosure Act, Sec. 295, was not intended to be limited to the
                smaller subset of foods now defined as ``bioengineered,'' which, as
                proposed, excludes highly refined ingredients and products of gene
                editing.
                 AMS Response: AMS appreciates commenters' concerns and acknowledges
                the range of feedback provided. AMS has adopted a modified version of
                Position 1 and believes that the definition of ``bioengineering'' sets
                forth the scope of the mandatory disclosure. Although the Jeffrey
                Prieto letter seemingly advocated an expansive interpretation of the
                statutory definition of bioengineering along the lines of Position 2,
                AMS maintains that with the full range of information before it,
                including additional interpretation of the amended Act and responses to
                both the 30 questions and the NPRM, Position 1 is more closely aligned
                with the amended Act's definition of bioengineering. AMS will adopt
                Position 1 and is incorporating the statutory definition of
                bioengineering into the regulatory definition of ``bioengineered
                food.''
                 AMS does not find it necessary to further define bioengineering.
                AMS also disagrees with commenters' concerns that failing to further
                define bioengineering would result in limiting preemption. Subtitle F
                of the amended Act addresses Federal preemption of State and local
                genetic engineering labeling requirements. 7 U.S.C. 1639i. The
                preemption provisions extend beyond bioengineering labeling and include
                genetic engineering labeling requirements.
                 Also, as stated earlier, this definition of bioengineered food
                focuses primarily on the products of technology, not the technology
                itself. AMS is not making a blanket statement regarding the scope of
                technologies that are covered by the NBFDS. Finally, AMS agrees the
                NBFDS should align with some elements of existing standards to the
                extent possible. In Sections II through IV of this rule, AMS outlines
                its efforts to align the NBFDS with existing laws.
                 Comment: Several commenters supporting Position 2 also recommended
                adopting the Codex Alimentarius definition for Modern Biotechnology:
                (i) In vitro nucleic acid techniques, including rDNA and direct
                injection of nucleic acid into cells or organelles, or (ii) fusion of
                cells beyond the taxonomic family, that overcomes natural,
                physiological reproductive or recombination barriers, and that are not
                techniques used in traditional breeding and selection. These commenters
                state that the Codex Alimentarius definition of bioengineering is
                internationally recognized by the World Trade Organization as the
                standard for settling trade disputes, and therefore should serve as a
                guidepost for the USDA. Additionally, several commenters expressed
                concern that adopting Position 1 could negatively impact trade.
                According to these commenters, most countries with BE disclosure
                standards require that highly refined products be disclosed. They
                contend that adopting Position 1 and not aligning the NBFDS with
                existing international standards would create confusion among consumers
                and in the international marketplace.
                 AMS Response: In drafting the proposed rule and in finalizing the
                rule, AMS has reviewed and considered various foreign labeling regimes.
                To the extent possible, AMS has tried to align the NBFDS with existing
                domestic and international regimes to reduce burdens on regulated
                entities, promote consistency for consumers, and limit trade impacts.
                AMS is bound by the plain language of the amended Act. As described
                above, based on the language of the amended Act, AMS is incorporating
                the statutory definition of bioengineering into the regulatory
                definition of ``bioengineered food.'' As
                [[Page 65836]]
                such, if a food does not contain detectable modified genetic material,
                it is not a bioengineered food and does not require disclosure.
                 Comment: Some commenters also cited evidence that the amended Act
                did not propose the adoption of any ``other factors and conditions
                under which a food is considered a bioengineered food'' as part of the
                final rule. These commenters state that this rulemaking may only
                provide a process to allow any person to petition AMS and request the
                adoption of specified ``other factors and conditions.''
                 AMS Response: AMS disagrees with commenters who assert that the
                amended Act did not provide for factors and conditions under which a
                food is considered a bioengineered food. The amended Act clearly
                provides the Secretary with this authority. 7 U.S.C. 1639b(b)(2)(C).
                AMS has interpreted this statutory provision as one that limits the
                scope of the definition of ``bioengineered food,'' thus potentially
                excluding certain products from disclosure. The factors and conditions
                process, as proposed in the NPRM and adopted in this rule, offers a
                fair and rational method by which interested persons can petition AMS
                to consider various proposals. See Section II.E of this rule for
                details of the process.
                 Additionally, nothing in the amended Act precludes AMS from
                considering requests for a factor and condition that were submitted as
                part of responses to the 30 questions as petitions contemplated by 7
                U.S.C. 1639b(b)(2)(C) and applying the process in this final rule to
                consider those petitions. Because the process is a rulemaking process,
                we believe that it is appropriate and efficient to consider certain
                petitions that meet the standards for consideration in Sec. 66.202 as
                part of this rulemaking.
                 Comment: One commenter stated that because there is no difference
                chemically between refined and highly refined products and their non-BE
                counterparts, these products should not be treated differently.
                Instead, commenters believe refined and highly refined products should
                be exempt from BE labeling similar to their non-BE counterparts.
                Several commenters expressed concern that treating these chemically
                identical products differently could negatively impact the market
                appeal of highly refined products. Commenters also point out that
                enzymes produced from bioengineering as sourced from bioengineered
                crops are not themselves BE food, because enzymes are proteins and do
                not contain DNA.
                 AMS Response: AMS recognizes that highly refined foods produced
                from BE crops are generally chemically identical to the same foods
                produced from non-BE sources. Under the NBFDS, neither product would be
                subject to disclosure unless another ingredient triggers the disclosure
                requirement. However, regulated entities do have the option to
                voluntarily disclose information about highly refined foods derived
                from BE sources.
                 AMS notes that enzymes may be used in a manner that requires them
                to be labeled on the ingredient statement. Enzymes sometimes qualify as
                incidental additives that are not required to be labeled as ingredients
                on a food label. In those instances, they do not require disclosure as
                BE foods. However, bioengineered enzymes that do not qualify as
                incidental additives may require disclosure as BE foods, unless they do
                not have detectable modified genetic material.
                 Comment: Some commenters feel that mandating disclosure for refined
                products would disparage biotechnology. They also felt that labeling BE
                products would impose a burden on them that was not levied upon the
                non-BE counterpart.
                 AMS Response: AMS appreciates commenters' concerns about mandatory
                disclosure and explains the NBFDS seeks to minimize the food industry's
                implementation and compliance costs while providing a mandatory,
                uniform disclosure standard for BE food. As noted, AMS has adopted
                Position 1, in which products that do not contain modified genetic
                material are not bioengineered foods and are not subject to mandatory
                disclosure. Such products could be voluntarily disclosed.
                 Comment: Some commenters provided an economic argument that the
                number of BE foods covered would not change if refined and highly
                refined foods where no rDNA is detectable are not covered by the NBFDS.
                In addition these commenters cite the inconsistency of requested
                exemptions for (1) incidental additives, processing aids, secondary
                direct additives; (2) food derived from insects or microorganisms that
                grow or feed on a bioengineered substrate, such as a bioengineered crop
                or other substance; (3) enzymes; (4) ingredients derived via
                fermentation regardless of whether the microorganisms used in the
                fermentation are derived using rDNA technology, and (5) food products
                with medicinal or supplementary applications to be excluded from the
                definition of a BE Food. They stated that exemptions for refined and
                highly refined products would be no different.
                 AMS Response: AMS acknowledges the range of comments citing
                substances that may or may not be subject to disclosure. In
                establishing this rule, AMS relied on the statutory language in the
                amended Act in adopting Position 1. Foods with no modified genetic
                material are not bioengineered food and therefore are not subject to BE
                disclosure. As stated in the RIA, because AMS has adopted this
                position, there would be a reduction in the number of products that are
                labeled BE. Because those foods are not bioengineered food subject to
                mandatory disclosure under the amended Act, AMS does not have the
                authority to require BE disclosure for those foods regardless of the
                number of food products that may be affected.
                 In addition, AMS sought to align the disclosure requirements of the
                NBFDS with the ingredient declaration requirements under applicable FDA
                regulations to simplify compliance and reduce labeling costs for
                regulated entities. Section II.E.1 of this rule details AMS's position
                on disclosure of incidental additives, including enzymes and
                microorganisms used in fermentation. AMS further discusses its position
                for some of these substances in Section II.E.4 of this rule.
                 AMS sought to limit inconsistencies to the extent possible and
                where it had the authority to do so. To the extent that interested
                persons think that other products should be subject to disclosure, they
                may submit a petition or request seeking to adopt a factor or condition
                to potentially modify the definition of ``bioengineered food'' in a
                future rulemaking.
                 Comment: Commenters pointed out that the NBFDS is a marketing
                standard, not a safety standard. Consequently, they feel AMS should aim
                to determine whether its new labeling system would confuse consumers.
                These commenters were concerned that consumers who expect food
                containing raw BE ingredients to be labeled as such may feel misled if
                AMS adopts Position 1 for the NBFDS. Other commenters suggested that
                the NBFDS clarify the definition of bioengineering to state that it is
                synonymous with ``genetic engineering'' or ``GMO.'' These commenters
                are concerned that the public, which commonly refers to BE products as
                GMOs, may be confused when using the term bioengineering and that the
                terminology may be inconsistent with other labeling systems.
                 Several commenters cited the option in the proposed rule to later
                petition AMS to include specific factors or conditions not otherwise
                provided for in the definition of ``bioengineered food''
                [[Page 65837]]
                and provide stakeholders with the freedom to disclose voluntarily
                additional ingredients/products if they are truthful and consistent
                with the NBFDS.
                 AMS Response: AMS acknowledges commenters' concern for potential
                consumer confusion regarding the new labeling system. As explained in
                earlier comments, AMS has adopted Position 1 and has incorporated the
                statutory definition of bioengineering into the regulatory definition
                of ``bioengineered food.'' We believe this definition of
                ``bioengineering'' clearly sets forth the scope of the mandatory
                disclosure. AMS does not believe that the definition of bioengineered
                food will create consumer confusion. However, AMS does understand that
                some regulated entities are interested in disclosing that certain
                products such as refined products are derived from bioengineering;
                accordingly, regulated entities may voluntarily disclose such products.
                 AMS considered similar terms to bioengineering as permitted by the
                amended Act but ultimately determined that bioengineering and
                bioengineered food accurately reflected the scope of disclosure and the
                products and potential technology at issue. AMS believes that using
                other terms such as genetic engineering or genetically modified
                organisms may create inconsistencies with the preemption provisions or
                muddy the scope of disclosure.
                 Comment: Several commenters cited the option in the proposed rule
                to later petition AMS to include specific factors or conditions not
                otherwise provided for in the definition of ``bioengineered food'' and
                provide stakeholders with the freedom to voluntarily disclose
                additional ingredients/products if it is truthful and consistent with
                the NBFDS. Many commenters saw this as a basis to exempt refined and
                highly refined foods from the NBFDS as proposed in Position 1.
                 Some commenters were concerned with the economic impacts of
                labeling refined foods as bioengineered and leading consumers to
                improperly believe refined products contain bioengineered ingredients.
                A related concern by one commenter maintains that Position 2
                contradicts FDA's requirement that labeling be accurate. As an example,
                the commenter suggested that labeling a package of sugar, a refined
                food product, with one of the NBFDS disclosure options would falsely
                imply the product contains modified DNA, and such a claim would not
                comply with FDA's labeling requirement.
                 AMS Response: AMS has adopted Position 1 based on the plain
                language of the amended Act. In addition, we agree that entities can
                opt to voluntarily disclose information about highly refined foods made
                from BE sources in accordance with Sec. 66.116.
                 Comment: Some commenters contend consumer expectations for BE
                disclosure are driven, in part, by voluntary marketing claims like Non-
                GMO Project Verified and True North. These voluntary programs label
                highly refined products derived from bioengineering as GMO's.
                Commenters suggest using an alternative approach to labeling these
                products would cause consumer confusion and disrupt the industry.
                Several commenters expressed concern this potential confusion could
                impact them personally, as many have experienced health-related issues
                after consuming products made with GMO ingredients. Others expressed
                concerns about products made using bioengineered products.
                 AMS Response: AMS acknowledges that entities may participate in
                voluntary labeling initiatives such as the non-GMO Project so long as
                they are in compliance with all applicable Federal regulations. To the
                degree possible, USDA has tried to minimize the impact the NBFDS will
                have on these voluntary absence claims. AMS acknowledges that some
                elements of the NBFDS may differ from requirements of some existing
                voluntary marketing claims. As explained in earlier comment responses,
                AMS has adopted the statutory definition of ``bioengineering,'' thereby
                exempting from disclosure labeling foods such as refined products that
                have undergone processes to remove modified genetic material.
                 In establishing this rule, AMS has considered the interest of
                consumers and seeks to minimize the food industry's implementation and
                compliance costs--costs that could be passed on to the consumers. That
                said, as we have stated previously, nothing in this disclosure standard
                conveys information about the health, safety, or environmental
                attributes of BE food compared to non-BE counterparts. The NBFDS
                provides a mandatory, uniform disclosure standard for BE food--as
                defined in this rule, by which uniform information is provided to
                consumers.
                3. Conventional Breeding
                 AMS solicited comments on whether to define ``conventional
                breeding'' and suggestions for what that definition should be.
                 Comment: Many commenters requested that AMS define conventional
                breeding within the NBFDS final rule, to better define the scope of
                NBFDS for regulated entities and consumers. Several commenters stated
                that conventional breeding should be narrowly defined, opining that the
                purpose of the NBFDS was to require labeling of bioengineered food.
                This was in contrast to another commenter who desired a broad
                definition of the term, stating that the final rule ``should recognize
                that because a process accelerates what could be accomplished through
                other, slower processes to achieve the same result, it should not
                preclude the accelerated process from being deemed ``conventional.''
                 A few commenters accepted one of the sample definitions included by
                AMS in the proposed rule, but there were many additional proposed
                definitions. Some commenters suggested conventional breeding be defined
                as ``referring to a wide range of modifications obtained through
                methods that use an organism's potential genetic variability within its
                gene pool.'' One commenter suggested modifying one of AMS's sample
                definitions for conventional breeding to state ``protoplast fusion''
                rather than ``protoplast,'' ``cell selection'' rather than ``cell'' and
                ``embryo rescue'' rather than ``embryo fusion.'' Other commenters
                suggested adopting bioengineered food definitions from the USDA
                National Organic Standard (see 7 U.S.C. 1639b(f)(2)), by the Food and
                Drug Administration, or from the Codex Alimentarius. One such commenter
                believed that doing so would make clear that the techniques of modern
                biotechnology, such as gene editing and gene silencing, were not
                conventional breeding.
                 A few groups of commenters requested the term be defined but did
                not propose a specific definition. Many of them stated that they
                disapproved of the use of any definition that includes a list, as
                breeding techniques are continually evolving. One commenter argued that
                the definition should be fashioned in such a way that the only products
                subject to labeling are the ``products that were developed by
                transferring genetic material between non-sexually compatible
                species.'' A few other commenters desired that clarity would be
                achieved by providing a definition and identifying, through examples,
                those modifications that could be obtained through conventional
                breeding. Another group of commenters stated that ``this should be done
                through a supplemental proposed rule that provides the public with an
                additional opportunity to provide public comments.''
                [[Page 65838]]
                 There were, however, several commenters who believed that there was
                no reason to define conventional breeding. Some stated that the term
                was commonly understood and therefore unnecessary to define. Others
                argued that the term was difficult to precisely define and therefore
                would only sow confusion amongst the regulated if there was any attempt
                to do so. One commenter worried that a definition would likely not
                stand the test of time due to the pace of new technology and therefore
                would not cover newly established processes.
                 AMS Response: AMS appreciates the wide range of comments received
                related to defining ``conventional breeding.'' AMS finds ``conventional
                breeding'' is a commonly understood term within the industry which does
                not require a definition. Additionally, any ``conventional breeding''
                definition could become unworkable or obsolete as technology and
                techniques evolves. Forgoing defining the term would allow AMS to
                respond to those challenges in real time.
                 Comment: Several commenters stated that conventional breeding is a
                common term which is well understood, therefore the term does not need
                to be defined. Some of those that did not wish the term to be defined
                argued that any such attempts would be inherently confusing or
                misleading to consumers.
                 AMS Response: AMS agrees that ``conventional breeding'' is a
                commonly understood term within the industry that does not require
                definition.
                4. Found in Nature
                 AMS requested comments on whether the term ``found in nature''
                should be defined, and if so, what that definition should be. AMS
                specifically sought comment on whether intellectual property law should
                be considered as one method for determination.
                 Comment: Commenters generally did not support defining or including
                the term ``found in nature'' within the NBFDS. Many of those in
                opposition believed the term ``found in nature'' itself was nebulous,
                misleading, and not adequately defined by science. Others argued that
                agriculture is inherently separate from nature.
                 Of those that did request the term be defined, two common
                suggestions were ``spontaneously occurs in nature, such as natural
                biological evolution, and does not overcome natural physiological
                reproductive or combination barriers,'' or ``the kinds of genetic
                modifications which can occur in nature within the genome of an
                organism, without human intervention.''
                 One commenter suggested that should definitions be deemed
                necessary, the definitions avoid setting precedents in other regulatory
                areas, and be kept as simple and as clear as possible. Another group of
                commenters stated that ``this should be done through a supplemental
                proposed rule that provides the public with an additional opportunity
                to provide public comments.''
                 AMS Response: AMS finds it unnecessary to define the term ``found
                in nature.'' AMS received no compelling arguments to define the term
                and believes that attempting to do so may cause confusion in light of
                the rapid pace of innovation. In order to incorporate technological
                changes in industry into this mandatory labeling standard, AMS believes
                it needs to retain maximum flexibility. That will not be accomplished
                by narrowly defining found in nature.
                5. List of Bioengineered Foods
                 AMS solicited comments on the option of utilizing a list of foods
                in an attempt to make it easier for regulated entities to identify what
                products require disclosure. AMS proposed two lists: One composed of
                highly adopted foods commercially available in the United States and
                another of non-highly adopted foods commercially available in the
                United States. AMS requested comments on maintenance of and revisions
                to the lists, the threshold for ``highly adopted,'' and list
                composition. AMS also requested comments on using list maintenance to
                evaluate whether a particular crop meets the definition of
                ``bioengineering'' in light of emerging technologies; on whether
                enzymes, yeasts, and other foods produced in a controlled environment
                should be included on the lists; and on the treatment of foods produced
                in other countries.
                 Comment: While some commenters suggested that a list should not be
                used as a tool to help identify potential BE foods, most commenters
                generally supported the use of a list method to identify foods subject
                to disclosure, noting a readily available list of such foods would make
                compliance less costly. A few commenters acknowledged the usefulness of
                the proposed lists as a reference tool but recommended that the
                presence of BE ingredients in a food trigger the disclosure requirement
                even if those foods do not appear on the lists.
                 AMS Response: AMS agrees that the List of Bioengineered Foods is an
                important part of the rule that will facilitate compliance with the
                NBFDS. AMS also agrees that foods should be subject to disclosure to
                the extent regulated entities have actual knowledge such foods are
                bioengineered. Disclosure decisions are based on entities' records.
                Nevertheless, entities that have actual knowledge that a food is
                bioengineered must make appropriate disclosure of that food, even if
                that food does not appear on the List. AMS believes, however, that it
                would be unduly burdensome to hold regulated entities responsible for
                failing to make BE disclosures for foods that do not appear on the List
                and for which regulated entities have no actual knowledge of
                bioengineered status. Disclosure and recordkeeping for unlisted foods
                is therefore required only when regulated entities have actual
                knowledge of the bioengineered status of the food in question. AMS
                notes that it intends its List to be as complete as possible, aiming to
                capture any BE foods that meet the definition of bioengineered food and
                that could potentially be offered for sale in the United States.
                 Comment: While some commenters supported the use of separate lists
                for highly adopted and non-highly adopted BE foods, many suggested that
                using two lists with different labeling requirements would be confusing
                and burdensome, and recommended the final rule call for the use of a
                single list. A few commenters noted that using a single list could make
                enforcement and list revision less burdensome for AMS. Others
                recommended using a single list because the adoption rates forming the
                basis of the two-list approach do not necessarily correspond to the
                rates at which the listed crops are used in foods commercially
                available for human consumption in the United States. Several
                commenters recommended the single list be comprised of all commercially
                available crops, while a few industry commenters asked that the single
                list include only crops with a high (85%) BE adoption rate.
                 AMS Response: In the interest of simplifying compliance with the
                NBFDS, AMS has consolidated the two lists proposed in the NPRM into one
                List of Bioengineered Foods and has expanded that List to include foods
                that may be produced internationally.
                 AMS has also determined that the purposes of the NBFDS are best
                served by maintaining a list that, to the extent possible, captures all
                foods meeting the regulatory definition of a ``bioengineered food''
                that could potentially be offered for sale in the United States,
                regardless of U.S. adoption rate. AMS has therefore expanded the List
                beyond foods that are commercially available domestically. The initial
                List, in Sec. 66.6, is comprised
                [[Page 65839]]
                of foods that, to the best of AMS's knowledge, are authorized for
                production somewhere in the world and are currently in commercial
                production somewhere in the world. AMS has considered information and
                data from several sources, including, but not limited to USDA reports
                and databases, ISAAA reports and databases, and reports and databases
                produced by other Federal government agencies. Foods that AMS believes
                are not currently in commercial production do not appear on the initial
                List, even if such foods are authorized for production in the U.S. or
                elsewhere. AMS may add those foods to the List through the process
                prescribed for list maintenance and revision when available information
                suggests it would be appropriate to do so. In any event, even if a food
                is not on the List, regulated entities knowingly using a bioengineered
                product are required to make disclosures for that food.
                 Comment: Several commenters recommended using an ingredients-based
                list rather than a crops-based list. A few commenters stated that
                presuming BE material is present in food derived from crops on the list
                would frequently be unwarranted, as many such foods derive from listed
                crops only because they contain certain highly refined ingredients that
                lack BE material; these commenters explained that using an ingredients-
                based list (such as a modified version of the lists in Exhibit 2 or
                Table 5 from the Regulatory Impact Analysis) instead would avoid
                creating that misleading presumption. Other commenters stated that an
                ingredients-based list would make compliance easier for regulated
                entities, which are often unsure which crops a food's ingredients
                derive from. Some commenters, however, thought a crops-based list would
                be easier for regulated entities to use and noted that a crops list,
                unlike an ingredients list, could be updated and verified using
                adoption rates and field data. A few commenters also expressed a need
                for a list containing BE microorganisms or other BE species, such as BE
                salmon.
                 AMS Response: AMS believes that regulated entities are in the best
                position to know the source, origin, and type of food products they are
                procuring, sourcing, refining, and potentially labeling. AMS developed
                the List of Bioengineered Foods to reduce potential recordkeeping
                burden of regulated entities while also providing information about the
                scope of potentially available bioengineered foods. The List has been
                expanded to include bioengineered foods that may not be produced in the
                United States and non-crop bioengineered foods, for example salmon. AMS
                acknowledges that the List may not be complete and may require periodic
                updates. The rule provides for annual review of the List and provides a
                mechanism for public input into list population, including rulemaking
                as necessary, as well as consultation with other government agencies.
                 AMS anticipates that maintaining an ingredients-based list would be
                resource-intensive, difficult to maintain, and would likely become
                obsolete in short order. As stated, AMS believes that regulated
                entities have more knowledge than AMS regarding the ingredients they
                are sourcing. Entities who knowingly use bioengineered foods are
                responsible for making appropriate disclosures, even if the food is not
                on the List.
                 Comment: A few commenters requested that AMS establish a list of
                Excluded Ingredients identifying ingredients or substances AMS
                ultimately deems not to trigger the disclosure requirement. These
                commenters noted that such a list could reduce compliance and
                recordkeeping costs for regulated entities and suggested AMS could
                periodically amend the list as appropriate without going through formal
                notice and comment rulemaking. These commenters requested that AMS set
                forth the process for creating and updating a list of Excluded
                Ingredients in the final rule.
                 AMS Response: As explained in the Preamble, AMS cannot at this time
                establish and maintain a list of ingredients excluded from the scope of
                the disclosure requirement. Regulated entities are in the best position
                to know whether disclosure is not required for the ingredients in their
                products, including, for example, because records verify the products
                are sourced from non-bioengineered crops or other sources, the
                ingredients have been subjected to refinement processes validated to
                remove genetic material, or analytical testing results demonstrate the
                absence of modified genetic material.
                 Comment: Several commenters supported the proposed rule's exclusion
                of enzymes, yeasts, and other non-crop foods created in controlled
                environments from the proposed lists on the grounds that such foods
                contain no genetic material and thus should not trigger the BE
                disclosure requirement. Some commenters, however, recommended the lists
                be expanded to include those products and all other BE-derived
                substances in commercially available foods. Several of these commenters
                explained that such substances, if ultimately deemed to meet the NBFDS
                definition of BE food, should be included in the final lists to
                facilitate compliance with the disclosure rule.
                 AMS Response: AMS notes that if regulated entities have actual
                knowledge that enzymes, yeasts, and other similar foods produced in
                controlled environments are bioengineered foods, then regulated
                entities are obligated to disclose accordingly. AMS has decided not to
                include on the List of Bioengineered Foods enzymes, yeasts, and other
                similar foods produced in controlled environments. AMS believes that
                such substances often do not meet the definition of a ``bioengineered
                food'' because they may be incidental additives with no technical or
                functional effect in the food under Sec. 66.1 and 21 CFR 101.100(a)(3)
                (see Section E.1 of the Preamble, adopting the ``incidental additive''
                factor or condition). Similarly, in many instances, a regulated entity
                may be able to demonstrate that such foods do not contain modified
                genetic material, such that they are not bioengineered foods. AMS
                believes categorical inclusion of such substances on the List of
                Bioengineered Foods would create confusion and complicate regulated
                entities' efforts to comply with the NBFDS's disclosure requirement.
                Regulated entities must determine whether recordkeeping and,
                ultimately, disclosure of those substances are required on a case-by-
                case basis.
                 Comment: Some commenters supported the proposed approach of listing
                crops or foods generally by type rather than creating a more cumbersome
                list identifying specific derivatives or varieties of listed crops.
                Other commenters recommended that the final lists refer to crops with
                greater specificity than the lists proposed--such as by specific
                cultivars for each crop, brand name, variety, or narrowly-defined
                product characteristic--to avoid burdening too many producers of non-BE
                crops with the NBFDS recordkeeping requirement. For example, one
                comment suggested listing ``Arctic[supreg] apple'' instead of ``Apple,
                Non-browning cultivars,'' since the only commercially available version
                of BE apples uses the Arctic[supreg] brand name. A few commenters also
                requested clarification on which types of corn constitute ``sweet
                corn'' and which types constitute ``field corn.''
                 AMS Response: AMS recognizes that listing foods broadly by type,
                rather than by bioengineered derivatives or varieties of particular
                foods, may impose disclosure or recordkeeping burdens on overbroad
                segments of
                [[Page 65840]]
                producers or sellers of non-bioengineered foods. To address that
                concern while maintaining a list of bioengineered foods that is not
                overly cumbersome, AMS has decided to list foods broadly by type while
                providing more details regarding specific varieties and
                characteristics, where possible. With respect to apples, AMS
                understands that most apple varieties are not known to be
                bioengineered. AMS has modified the List to identify the specific
                apples that are known to be bioengineered. As other BE versions of
                foods that are listed by variety are approved and become legally
                available, AMS will revise such listings to be more generic during the
                annual update process.
                 Additional information will be provided on AMS's website about
                specific varieties of foods that have been bioengineered, where that
                information is available to AMS. To the extent possible, the AMS
                website will also provide additional information about the traits for
                which the foods have been bioengineered. The information on the AMS
                website should aid regulated entities in determining which foods must
                bear a BE disclosure. As part of the annual review process, AMS will
                solicit information from the public to ensure that the List and the
                additional information maintained on the AMS website are complete,
                accurate, and as detailed, as possible.
                 Comment: Some commenters asked AMS to expand the proposed lists of
                BE products to include any BE foods that have undergone an FDA pre-
                market consultation, noting that such foods would be free to enter the
                market in the United States. However, other commenters pointed out that
                FDA pre-market consultation is not necessarily a reliable indicator
                that commercial availability is imminent, and they supported limiting
                the lists to products that are commercially available. Some commenters
                also requested clarification in the final rule on the definition of
                commercial availability, with a few commenters suggesting a market
                threshold of 10% for deeming a product commercially available.
                 AMS Response: As previously discussed, AMS has replaced the two
                lists of commercially available bioengineered foods proposed in the
                NPRM with a consolidated List of Bioengineered Foods that includes, to
                the best of AMS's knowledge, all foods that may meet the regulatory
                definition of a ``bioengineered food'' that could potentially be
                offered for retail sale in the United States. The consolidated List,
                which can be found in Sec. 66.6, is comprised of foods that meet the
                following criteria: (1) They are authorized for production somewhere in
                the world and (2) they are believed to be in legal commercial
                production somewhere in the world. AMS believes this approach is
                consistent with the regulatory definition of ``bioengineered food'' and
                avoids potential confusion on the meaning of or threshold for the term
                ``commercial availability,'' that was proposed in the NPRM.
                 Comment: Many commenters supported expanding the lists to encompass
                BE crops grown in and imported from other countries, as large
                quantities of foods containing or derived from such crops are
                commercially available in the United States. Several commenters
                acknowledged that assembling international food lists and ensuring
                NBFDS compliance by foreign suppliers may be complicated, but that AMS
                might accomplish those ends by, for example, collaborating with
                international trade partners, using data published by organizations
                like the ISAAA and setting forth specific recordkeeping and/or testing
                requirements for foods imported from other countries.
                 AMS Response: Because bioengineered foods produced abroad are
                imported and offered for sale (or incorporated into products offered
                for sale) in the United States, AMS has decided to expand the list to
                include bioengineered foods that are in commercial production
                internationally. AMS has assembled that list by gathering information
                from several sources, including data published by ISAAA, FDA's list of
                completed voluntary premarket biotechnology consultations, and
                information published by ERS. AMS believes ongoing maintenance of the
                list may appropriately involve consideration of information from these
                and similar sources, as well as information supplied by the United
                States' trade partners. During the annual process to review and update
                the lists, AMS will consider information from interested parties,
                including importers and trade partners.
                 Comment: Several commenters agreed that if a food contains an
                ingredient appearing on the List, the entity should make a BE
                disclosure unless it keeps records verifying it is not a BE food and
                does not contain BE ingredients. Other comments criticized basing the
                disclosure requirement on whether foods were among the listed crops,
                explaining that the presumption created by a food's inclusion on the
                lists would place the rule's recordkeeping burden primarily on those
                who use non-BE commodity varieties in their foods--a result these
                comments viewed as at odds with congressional intent. Similarly,
                another commenter suggested that AMS should be tasked with keeping
                track of records supporting disclosure, allowing entities to challenge
                their appearance on the list directly to USDA.
                 AMS Response: AMS has determined that all food manufacturers,
                importers, and retailers offering for retail sale foods on the List of
                Bioengineered Foods are regulated entities and must maintain records
                related to those foods. The records can be used to verify disclosure or
                non-disclosure decisions. AMS does not believe this approach places an
                undue recordkeeping burden on entities that do not handle bioengineered
                foods; the NBFDS requires all regulated entities to maintain customary
                business records on foods they handle that appear on the List of
                Bioengineered Foods, and AMS anticipates those customary business
                records will be sufficient to demonstrate whether or not a food is
                bioengineered or contains bioengineered ingredients.
                 It would be expensive and very difficult, if not impossible, for
                AMS to keep track of records that support disclosure. AMS believes that
                regulated entities are in the best position to know the foods they are
                sourcing, distributing, using, and labeling, and the amended Act
                requires them to maintain usual and customary records. Because
                regulated entities must provide AMS with access to those records, it
                would be unnecessary to keep track of those records.
                 Comment: While some commenters favored annual review and revision
                of the lists, others found annual updates too infrequent to keep
                consumers effectively apprised of the BE status of their foods, and
                asked AMS to update the lists on a quarterly, monthly, or continuous
                basis instead. Some commenters, by contrast, suggested annual updates
                would be too frequent and unduly burdensome to AMS, particularly in
                light of the delay potentially associated with seeking public input
                before list revision, as proposed in the NPRM.
                 Commenters nevertheless generally approved of employing an open,
                clear, and transparent revision process. A few commenters warned
                against overreliance on the views of interested stakeholders in the
                proposed revision process, encouraging AMS to rely primarily on
                evidence-based criteria for list updates. Some commenters also
                requested that AMS disclose the potential environmental impact of the
                BE products recommended for inclusion on the lists.
                 AMS Response: AMS recognizes the brisk rate at which bioengineering
                [[Page 65841]]
                technology is advancing and new bioengineered food products are
                entering the marketplace. Accordingly, and because of the role of the
                List of Bioengineered Foods in determining whether specific foods
                require BE disclosure, AMS believes the List should be reviewed and
                updated on a regular basis. At the same time, AMS is mindful of the
                need to ensure the process for updating the list is transparent and
                allows for careful consideration of all relevant information on the
                appropriateness of proposed revisions. AMS has determined that updating
                the list on an annual basis through the notice process strikes the most
                appropriate balance among these considerations.
                 The Preamble and Sec. 66.7(a) of the NBFDS describe the process by
                which AMS will seek recommendations and conduct an annual notice
                process through the Federal Register to review proposals regarding
                updates to the List of Bioengineered Foods. If indicated, AMS will
                conduct rulemaking to address proposed changes to the List. AMS
                believes this process will supply it with a wide range of pertinent
                information, including but not limited to scientific evidence, to allow
                the agency to make an informed decision whether certain foods should be
                added to or deleted from the list. The list review and update process
                will include consultation with other U.S. Federal government agencies
                with oversight of the use of bioengineered foods, including on the
                environmental impacts of using bioengineered foods. AMS, however, does
                not plan to attempt disclosure of potential environmental impacts as
                part of the list maintenance and revision process, as the NBFDS is not
                intended to convey information about the environmental attributes of BE
                food. AMS will instead revise the list based on whether a food meets
                the definition of a ``bioengineered food.''
                 Comment: Many of those who commented requested that the lists
                reflect the use of new and emerging technologies such as CRISPR,
                Synbio, and Talens. Those commenters recommended the lists remain
                consistent with the standards set forth in other Federal regulations,
                as well as the Codex Alimentarius, in order to facilitate compliance
                with applicable requirements and avoid conflicts with trade partners.
                Other commenters maintained that some existing or future genetic
                engineering techniques may not produce foods falling within the
                statutory definition of BE food and that such products should not
                appear on the proposed lists.
                 AMS Response: As previously noted, AMS believes that the
                characteristics of the biotechnology product itself, rather than the
                particular technological process by which the product was created,
                should determine whether a product is included on the List of
                Bioengineered Foods. AMS considers this approach more compatible with
                the text of the amended Act and Congressional intent. As part of the
                process for list maintenance and revision, AMS will, in consultation
                with the U.S. Government agencies responsible for the oversight of
                biotechnology products, consider new and emerging technologies and
                whether foods resulting from those technologies meet the definition of
                ``bioengineered food.''
                 Comment: Comments reflected a wide range of opinion on the
                appropriate timeframe for regulated entities to attain compliance after
                the BE food lists are revised. Many commenters supported the proposed
                18-month compliance period. Others, concerned that the proposed period
                would allow new BE products to remain undisclosed to consumers for too
                long, recommended a 12-month period instead. Several industry
                commenters recommended a 24-month period, explaining that labeling
                costs rise and packaging waste results each time relabeling and
                repackaging are required, so those processes should occur as
                infrequently as reasonably possible. A few commenters suggested taking
                a more flexible approach, which would allow interested parties to
                submit comments on an appropriate time period as part of the list
                revision process. These commenters stated that a more contracted or
                extended compliance period might be appropriate, depending on the foods
                proposed to be added to the lists and impacts of the proposed changes
                on supply chains.
                 AMS Response: AMS acknowledges the burden frequent relabeling and
                repackaging would place on regulated entities. We believe the proposed
                18-month compliance period allows regulated entities sufficient time to
                exhaust existing supplies and make necessary revisions to labels, and
                strikes the most appropriate balance with the countervailing need for
                consumer-facing labels to reflect accurate and updated BE information.
                In addition, AMS believes using a fixed 18-month compliance period for
                all changes to the list will prove more workable than setting
                applicable compliance periods on an ad hoc basis as part of the annual
                notice process for list revision.
                6. Factors and Conditions
                 AMS solicited comments on whether one or both of the following
                should constitute factors or conditions under which a food is
                considered a BE food: (1) Whether incidental additives should be
                considered a BE food and labeled accordingly; and (2) whether the
                modified genetic material in a highly refined food may be detected. The
                proposed definition of BE food in the NPRM included the first factor or
                condition (incidental additives) but did not include the second
                (detection). AMS sought comment on whether the final rule should
                incorporate one or both of those factors or conditions into the
                definition. The proposed rule also sought comment on the process for
                seeking a determination on the adoption of other factors or conditions.
                 Comment: Commenters were generally supportive of the proposed
                process for adopting factors or conditions under which a food is
                considered a BE food. Some commenters, however, requested AMS to
                clarify in the final rule the parameters for submitting petitions to
                adopt factors or conditions. A few commenters asked AMS to establish a
                specific time period within which the agency would respond to requests
                for adoption of factors or conditions, as well as a time period for
                regulated entities to attain compliance with adopted factors or
                conditions. Other commenters asked AMS to allow the adoption of factors
                or conditions under which food produced through new technologies falls
                within the definition of BE food.
                 AMS Response: As noted above, AMS has determined to adopt the
                process proposed in the NPRM for adopting factors and conditions under
                which a food is considered a BE food. AMS believes that process as
                outlined in the NPRM and this final rule is clear and transparent, and
                the agency has thus declined to alter the proposed submission
                parameters for petitions to adopt factors and conditions. AMS has also
                declined to establish a time period within which the agency must
                respond to requests for adoption of factors and conditions, as the time
                necessary for responding to such requests will vary depending on
                available agency resources, the complexity of the requests, and the
                nature of rulemaking. Similarly, AMS has not established a fixed
                compliance period within which regulated entities must attain
                compliance with adopted factors and conditions. To the extent
                necessary, AMS will address any compliance period in particular
                rulemakings considering factors or conditions to be
                [[Page 65842]]
                adopted. It is the view of AMS, however, that because adopted factors
                and conditions operate only to carve out foods from the definition of
                ``bioengineered food,'' compliance with adopted factors and conditions
                will not ordinarily be burdensome.
                 AMS also notes that the text of the amended Act authorizes the
                Secretary to establish a process for making determinations regarding
                ``other factors and conditions under which a food is considered a
                bioengineered food.'' 7 U.S.C. 1639b(b)(2)(C). Although AMS may
                consider particular technologies as part of the factors and conditions
                process (as well as in revising and updating the List of Bioengineered
                Foods), in accordance with the language in the amended Act, AMS
                believes determinations whether to adopt a proposed factor or condition
                will primarily focus on the characteristics of the final food products,
                rather than on the particular technologies used to create the food
                products. In deciding whether to adopt proposed factors or conditions,
                AMS will consult with U.S. government agencies responsible for
                oversight of biotechnology products and consider relevant information
                that may allow AMS to align the NBFDS with the standards of other
                Federal agencies or foreign governments.
                 Comment: A few commenters opposed the adoption of the factors or
                conditions on which AMS solicited comments on the grounds that all
                foods derived in any part from BE substances, including incidental
                additives or foods with no detectable modified genetic material, should
                be disclosed in the interests of transparency. The commenters added
                that consumers want to know not only whether the final product contains
                BE genetic material, but also whether BE substances were used to make
                the final product.
                 AMS Response: As explained in the Preamble to this final rule, a
                food does not fall within the definition of a ``bioengineered food''
                simply because a BE substance was used in the process of making the
                food--to be a ``bioengineered food,'' the food must contain modified
                genetic material. For that reason, AMS cannot decline to adopt a
                proposed factor or condition--which, under this final rule, could serve
                only to exclude foods from the scope of the ``bioengineered food''
                definition--solely on the basis that the factor or condition would
                exclude from disclosure a food derived in part from the use of a BE
                substance.
                 Comment: Many commenters agreed that incidental additives should
                not be subject to disclosure when FDA regulations exempt them from
                inclusion in the ingredient statement on a food label. These commenters
                stated that aligning the NBFDS with FDA ingredient labeling
                requirements would simplify compliance and reduce labeling costs for
                regulated entities, and would also avoid creating consumer confusion. A
                few commenters added that excluding incidental additives from
                disclosure would align the NBFDS with the regulations of international
                trading partners. Several commenters further noted that incidental
                additives are present in food at an insignificant level and do not have
                any technical or functional effect in the final food product.
                 AMS Response: AMS agrees with the above comments. Exempting
                incidental additives that are not required to be labeled under FDCA
                regulations is sensible, aligns the NBFDS with practices of trading
                partners, avoids consumer confusion that could otherwise result if a
                substance not appearing on a food label triggered the NBFDS disclosure
                requirement, and limits the burden on regulated entities without unduly
                limiting disclosure for consumers. For these reasons, AMS has adopted
                the proposed factor and condition regarding incidental additives.
                 Comment: A few commenters recommended that enzymes be excluded from
                the disclosure requirement even if FDA regulations require their
                inclusion in the ingredient statement on a food label. These commenters
                stated this approach would be consistent with how state laws on BE
                disclosure treated enzymes. Some commenters noted, however, that
                certain yeasts (unlike enzymes) must be disclosed because they contain
                DNA and remain active and functional in finished food. One commenter
                added that if a 5% threshold is selected, it is unlikely that the
                presence of yeast would trigger disclosure.
                 AMS Response: AMS anticipates that enzymes, yeasts, and similar
                organisms will frequently be excluded from the disclosure requirement,
                either because they will meet the requirements of the incidental
                additive factor or condition or because they meet some other NBFDS
                provision permitting nondisclosure (such as Sec. Sec. 66.1 and 66.9
                regarding foods with no detectable genetic material). For organisms
                present in food that do not meet the requirements of any such
                provision, however, AMS cannot provide a categorical exclusion from the
                disclosure requirement. To the extent that interested parties seek a
                categorical exemption for microorganisms, they may submit a request for
                such a factor and condition to modify the definition of bioengineered
                food in a future rulemaking.
                 Comment: Some commenters in favor of excluding incidental additives
                from disclosure requested the proposed factor or condition to be
                modified to expressly include within the meaning of ``incidental
                additives'' processing aids, secondary direct additives, and substances
                migrating to food from equipment or packaging. A few commenters further
                requested AMS to clarify that BE microorganisms (such as those used in
                fermentation) constitute incidental additives where those
                microorganisms do not remain active and have no technical or functional
                effect in the finished food product. One commenter requested that AMS
                clarify what it considers to be an ``insignificant'' level of an
                incidental additive present in food, and recommended AMS adopt a
                meaning of ``insignificant'' consistent with that set forth in the
                FDA's regulations on labeling ingredients in food.
                 AMS Response: AMS does not believe the requested modifications or
                clarifications are necessary. The factor and condition regarding
                incidental additives is designed to align the NBFDS with the FDA's
                regulations on labeling food ingredients. Section 66.1's incorporation
                of the incidental additives factor and condition into the NBFDS thus
                references the FDA labeling requirement at 21 CFR 101.100(a)(3), which,
                among other things, outlines the circumstances in which incidental
                additives need not be labeled as ingredients and describes the types of
                substances constituting ``incidental additives.'' To the extent that
                secondary direct additives do not constitute incidental additives not
                subject to FDCA labeling requirements, then such additives would be
                subject to BE disclosure. AMS notes that 21 CFR 101.100(a)(4) defines
                ``insignificant'' levels of additives for certain applications of 21
                CFR 101.100(a)(3). As Sec. 66.1 thus incorporates the FDA labeling
                regulations' conception of ``incidental additives'' into the NBFDS, AMS
                believes further clarification or modification on the meaning of, or
                circumstances under which a substance may qualify as, an ``incidental
                additive'' would be redundant or risk creating the appearance of a
                conflict between the NBFDS's incidental additives provision and the
                FDA's labeling requirements.
                 Comment: Many commenters opposed the factor or condition excluding
                highly refined foods from disclosure where no modified genetic material
                can be detected. These commenters suggested that consumers deserve to
                make informed purchasing decisions and
                [[Page 65843]]
                expect BE disclosure where food or ingredients are derived from BE
                crops, regardless of whether modified genetic material can be detected
                in the finished food. Some commenters objected to this factor or
                condition because it would result in fewer products being subject to
                disclosure, which in their view would be inconsistent with consumer
                expectations. Other commenters stated that testing for trace amounts of
                modified genetic material would be difficult to enforce, impose
                burdensome compliance and recordkeeping costs on the industry that
                would then be passed to consumers, and present barriers for
                international trade as several trade partners do not require testing
                before permitting nondisclosure for highly refined ingredients. Many
                regulated entities, these commenters added, would choose to make a BE
                disclosure rather than undergo testing, resulting in different labeling
                for similar food products. Some commenters also voiced concerns about
                the ability of current testing methods and technology to accurately or
                consistently capture the presence or absence of modified genetic
                material.
                 AMS Response: The NPRM sought comment on a second proposed factor
                and condition, excluding food from the disclosure requirement where
                modified genetic material in the food cannot be detected. Because this
                proposed factor and condition would serve a purpose in the NBFDS only
                if foods without detectable modified genetic material were included
                within the general definition of ``bioengineered food,'' the NPRM
                explained that AMS would consider this factor and condition only if AMS
                decided to proceed with Position 2 on the scope of the regulatory
                definition of ``bioengineered food.'' As AMS declined to adopt Position
                2 for the reasons stated in Section C.1, above, this factor and
                condition will not be incorporated into the NBFDS.
                 Comment: One commenter generally supported the exclusion of highly
                refined foods from the definition of BE food but opposed the
                undetectable modified genetic material factor or condition as proposed,
                on the ground that requiring regulated entities to provide the BE
                disclosure unless they first disprove the presence of modified genetic
                material by testing is an unconstitutional impingement on those
                entities' First Amendment rights.
                 AMS Response: AMS has adopted Position 1. The statutory definition
                of bioengineering states that food must ``contain[ ] genetic material
                that has been modified through in vitro recombinant deoxyribonucleic
                acid (DNA) techniques. . . '', to be labeled as a ``bioengineered
                food.'' AMS is not compelling regulated entities to label refined foods
                as ``bioengineered food.'' If the food product at issue is not a
                bioengineered food, AMS does not require that it be mandatorily
                labeled.
                 Comment: Many commenters supported the factor or condition
                excluding highly refined foods with no detectable modified genetic
                material from the disclosure requirement, pointing to several
                scientific studies they viewed as demonstrating an absence of genetic
                material in such foods. These comments explained that disclosure under
                the amended Act is triggered by the presence of modified genetic
                material and that, if no modified genetic material is detectable,
                Congress did not intend the food to be disclosed as BE. A few
                commenters also stated that treating highly refined ingredients derived
                from BE crops differently than their non-BE counterparts would create
                harmful marketplace impacts with no meaningful benefit to consumers.
                 AMS Response: As discussed in Section II.C.1, above, AMS agrees
                that highly refined foods with no detectable modified genetic material
                should not trigger the disclosure requirement. AMS, however, has
                decided to permit nondisclosure for such foods by adopting Position 1
                on the scope of the regulatory definition of ``bioengineered food,''
                and will therefore not incorporate this proposed factor or condition
                into the NBFDS.
                 Comment: Some parties in favor of the undetectable modified genetic
                material factor or condition offered comments on the testing methods
                and standards to be used to determine the presence or absence of
                detectable rDNA. One commenter recommended AMS accept a ``de minimis''
                level of modified genetic material at or below which ingredients are
                not subject to mandatory disclosure and set that de minimis level of
                detection at 0.1% modified genetic material to total DNA. That
                commenter added that if AMS decides a de minimis detection level is not
                appropriate, detectability should be defined in accordance with ISO/ICE
                standards and using a methodology validated by Codex Alimentarius
                guidelines. A few commenters asked AMS to establish minimal standards
                regarding the analytical tools used for detecting, identifying, and
                quantifying modified genetic material. Some commenters also urged AMS
                to update the NBFDS as scientific detection methods evolve, with a few
                further recommending that AMS maintain publicly available guidance
                documents or lists of scientifically validated genetic testing methods
                to ensure testing consistency in the marketplace.
                 AMS Response: As mentioned, because AMS has adopted Position 1 on
                the scope of the regulatory definition of ``bioengineered food,'' the
                proposed factor or condition regarding undetectable rDNA will not be
                incorporated into the NBFDS. The methods by which regulated entities
                may demonstrate that particular foods contain no detectable modified
                general material, and thus are not bioengineered foods, are discussed
                in Section II.C.1, above. As stated in the Preamble, AMS will provide
                instructions to the industry to explain how they can ensure acceptable
                validation of refining processes in accordance with AMS standards. AMS
                will also provide instructions regarding acceptable testing methodology
                used to satisfy that a food does not contain detectable modified
                genetic material.
                 Comment: Several commenters requested AMS to establish a list of
                Excluded Ingredients, identifying ingredients excluded from the scope
                of the disclosure requirement under the undetectable rDNA factor or
                condition. Those commenters noted that AMS could periodically amend
                that list as appropriate without going through formal notice and
                comment rulemaking, helping to ensure the list is kept current. Those
                commenters requested AMS to set forth the process for creating and
                updating a list of Excluded Ingredients in the final rule.
                 AMS Response: AMS has not adopted the second proposed factor or
                condition. As discussed in Section II.C.1, above, AMS cannot at this
                time establish and maintain a list of ingredients excluded from the
                scope of the disclosure requirement. Regulated entities are in the best
                position to know the products they are sourcing and the refinement
                processes those products have undergone. AMS has determined that
                regulated entities can demonstrate that modified genetic material is
                not detectable by maintaining records verifying that a food is sourced
                from a non-bioengineered crop or source, showing that a food has been
                subjected to a refinement process validated to remove modified genetic
                material, or maintaining records of analytical testing results
                demonstrating the absence of modified genetic material.
                 Comment: Commenters also requested AMS to adopt additional factors
                or conditions excluding the following substances from triggering the
                disclosure requirement: microorganisms derived through fermentation;
                ingredients derived from animals fed with or treated with
                pharmaceuticals
                [[Page 65844]]
                produced from BE substances; ingredients produced through the chemical
                transformation of BE foods or ingredients into substantially new
                ingredients with no present or readily traceable BE source; and dietary
                supplements and/or food products with medicinal or supplementary
                applications.
                 AMS Response: AMS solicited comments only on the two factors and
                conditions proposed in the NPRM and cannot adopt additional factors and
                conditions in this final rule. It is possible, however, that some or
                all of the foregoing factors and conditions may appropriately be
                adopted through the factors and conditions process in future
                rulemakings. The process for requesting adoption of factors and
                conditions is discussed in the Preamble to this final rule and outlined
                in subpart C of the NBFDS.
                7. Exemptions
                a. Animals Fed Bioengineered Feed
                 The amended Act prohibits a food derived from an animal from being
                considered a BE food solely because the animal consumed feed produced
                from, containing, or consisting of a BE substance. 7 U.S.C.
                1639b(b)(2)(A). Section 66.5(d) incorporates this statutory exemption
                and exempts products produced from animals fed bioengineered feed from
                displaying any form of disclosure regarding the presence of
                bioengineered ingredients or substances.
                 Comment: Commenters generally support the idea that animals fed
                with bioengineered feed and their products, including milk and eggs,
                should be exempt from the NBFDS. Many commenters understood that this
                provision was statutorily mandated. One commenter suggested that this
                provision should be framed as an exclusion rather than an exemption.
                Some commenters stressed that the NBFDS should state that products
                exempt from disclosure as bioengineered, such as products from animals
                fed bioengineered animal food, cannot by default qualify for an absence
                claim.
                 AMS Response: As commenters recognized, the amended Act prohibits a
                food derived from an animal from being considered a bioengineered food
                solely because the animal consumed animal feed produced from,
                containing, or consisting of a bioengineered substance. 7 U.S.C.
                1639b(b)(2)(A). Section 66.5(d) incorporates this statutory exemption.
                For example, eggs used in a baked good, where the eggs come from a
                chicken fed feed produced from BE corn and soy, would not be considered
                bioengineered solely on the basis of the chicken's feed.
                 AMS has made no changes to this statutory mandate. Although this
                provision could be framed as an exclusion, AMS believes that it is
                permissible to frame it as an exemption. Moreover, the regulatory text
                makes clear that food derived from an animal shall not be considered a
                bioengineered food solely because the animal consumed feed produced
                from, containing, or consisting of a bioengineered substance.
                 AMS agrees that food derived from an animal that consumed feed
                produced from, containing, or consisting of a bioengineered substance
                does not automatically qualify for absence claims. See 7 U.S.C.
                1639c(c). AMS declines to insert this in the regulatory text because
                the amended Act in this respect is self-executing. In addition, the
                focus of the NBFDS is on BE claims and not on absence claims. AMS notes
                that FDA (and FSIS depending on the food at issue) retain authority
                over absence claims. Entities seeking to use absence claims should
                ensure that they are in compliance with all pertinent Federal
                regulations and that such claims are truthful and not misleading.
                 Comment: Some commenters suggested that AMS should work to align
                ``Non-GMO'' text claim mandates with the NBFDS disclosure requirements,
                and that the exemption should also apply to products derived from
                animals or birds treated with drugs or pharmaceuticals produced through
                bioengineering.
                 AMS Response: AMS does not believe the amended Act provides
                authority to establish or align the NBFDS with a ``non-GMO'' label.
                Statutory provisions clearly instructed the Secretary to establish a
                national mandatory bioengineered food disclosure standard with respect
                to any ``bioengineered food'' and any food that may be
                ``bioengineered.'' As it pertains to other food labeling programs, the
                amended Act only acknowledges food certified under the NOP as
                sufficient to make a claim regarding the absence of bioengineering in
                the food, such as ``not bioengineered,'' ``non-GMO,'' or another
                similar claim. As noted above, AMS recognizes that FDA and FSIS retain
                authority over absence claims. Entities seeking to use absence claims
                should ensure that such claims comply with all applicable Federal laws
                and are otherwise truthful and not misleading. Regulated entities would
                need to ensure that their use of any other third-party standard that
                establishes and allows use of claims such as ``non-GMO,'' ``non-
                Bioengineered,'' or other similar claims does not put their product at
                risk of violating the NBFDS.
                 With respect to products derived from animals or birds treated with
                drugs or pharmaceuticals produced with bioengineering, AMS believes
                that such products, if they do not contain modified genetic material,
                would not meet the definition of ``bioengineered food.''
                 Comment: Some commenters requested that AMS define the term
                ``animal'' to include any animal, fish, insect, or microorganism. One
                commenter specifically pointed out that bees consuming pollen from
                bioengineered crops should be included in the definition of animal, and
                that honey should be exempted from disclosure. Some commenters argued
                that food ingredients like yeast, rennet, and enzymes should be exempt
                from disclosure. They explained that because yeast, rennet, and enzymes
                are typically produced or fed using bioengineered substrates, but may
                not be bioengineered themselves, they should be treated the same as
                products derived from animals that consumed bioengineered feed and
                exempted from the NBFDS. Many commenters agreed that the term ``non-
                agricultural ingredients'' is an appropriate description for such
                ingredients.
                 Another commenter went further to state that ingredients that are
                produced through the chemical transformation of a bioengineered food or
                ingredient and substantially transformed into a new ingredient, such as
                caramel flavoring and color, polydextrose, vitamin C, and sugar
                alcohols, should also be exempted. Commenters explained how for these
                kinds of ingredients that undergo significant processing, modified
                genetic material is rendered undetectable. Alternatively, other
                commenters argued that these ingredients should be subject to
                disclosure if they are listed as ingredients on a label.
                 AMS Response: AMS did not define animal in the regulatory text.
                AMS's understanding of an animal is based on the common understanding
                of an ``animal'', which refers to any organism in the biological
                kingdom Animalia, and would include fish, birds, and insects.
                ``Products derived from an animal'' would include milk, eggs, honey,
                rennet and other enzymes derived from animals, and similar products.
                The common understanding of ``animal'' and ``products derived from an
                animal'' would not include yeast since yeast is a single celled
                organism in the Fungi kingdom, or microbial rennet. Exempting yeast,
                microbial rennet, and
                [[Page 65845]]
                enzymes that are not derived from animals as an extension of the
                exemption for animal fed with bioengineered feed is beyond AMS's
                statutory authority. As discussed above, those substances may not be
                subject to BE disclosure if they qualify as an incidental additive that
                is not required to be labeled or if the modified genetic material in
                those products is undetectable.
                 Similarly, ingredients produced through the chemical transformation
                of a bioengineered food or ingredient and substantially transformed
                into a new ingredient, such as caramel flavoring and color,
                polydextrose, vitamin C, and sugar alcohols are subject to the NBFDS.
                They are not automatically exempt from disclosure. Based on AMS's
                understanding, these products would not qualify as products derived
                from animals that consumed bioengineered feed. However, they may not be
                subject to disclosure if they qualify as an incidental additive that is
                not required to be labeled or if the modified genetic material in those
                products is undetectable.
                 Comment: One commenter requested that AMS exempt foods produced
                from conventionally bred plants grafted to bioengineered rootstocks--
                provided that the plants producing such food have not otherwise been
                bioengineered. Such an exemption should cover the food and the plant
                that produced the food, including its bioengineered rootstock.
                 AMS Response: AMS cannot exempt foods produced from conventionally
                bred plants grafted to bioengineered rootstocks in this rulemaking. To
                the extent that these plants produce foods that have otherwise not been
                bioengineered, the resulting foods would not be bioengineered because
                they do not contain modified genetic material or for other reasons.
                b. Food Served in a Restaurant or Similar Retail Food Establishment
                 As required by the amended Act, AMS proposed that food served in
                restaurants or similar retail food establishments should be exempt from
                the NBFDS. See 7 U.S.C. 1639b(b)(2)(G)(i). We received several comments
                on this exemption and what food establishments should qualify for the
                exemption.
                 Comments: Commenters generally supported exempting restaurants and
                similar retail food establishments from the NBFDS. Commenters explained
                how if these kinds of establishments were subject to the NBFDS, they
                would be unnecessarily burdened with maintaining product lists of
                bioengineered food and ingredients sold on a daily basis. Other
                comments suggested that the proposed definition was too narrow and
                should include a list of places as examples, rather than an exclusive
                list, such as cafeteria, lunch room, food stand, food truck, saloon,
                tavern, bar, lounge, salad bar, delicatessen, entertainment venue, or
                other retail business establishment where meals or refreshments
                constituting food may be purchased. One commenter requested that
                transportation carriers be added to the list of places exempted from
                the NBFDS.
                 Comments were also received that opposed the exemption for
                restaurants and similar retail prepared food establishments. These
                comments explained how consumers deserve to know when the food they are
                buying is bioengineered, regardless of whether it was purchased in a
                restaurant or in a grocery store.
                 Another commenter explained how all foods prepared, processed, or
                packaged in a retail food establishment, including those utilizing
                ``central kitchen'' locations for certain prepared foods, should also
                be exempt from the disclosure requirements of the NBFDS.
                 Others suggested that AMS should consider exempting foods sold by
                manufacturers to restaurants and similar establishments, and foods
                marked as ``for institutional use'' or ``not for resale.''
                 AMS Response: This final rule continues to exempt food served in a
                restaurant or similar retail food establishment from disclosure under
                the NBFDS. Based on the comments received, AMS has now modified the
                definition of ``similar retail food establishment'' to add additional
                examples, including food truck and transportation carrier: ``Similar
                retail food establishment means a cafeteria, lunch room, food stand,
                food truck, transportation carrier (such as a train or airplane),
                saloon, tavern, bar, lounge, other similar establishment operated as an
                enterprise engaged in the business of selling prepared food to the
                public, or salad bars, delicatessens, and other food enterprises
                located within retail establishments that provide ready-to-eat foods
                that are consumed either on or outside the retailer's premises.'' AMS
                considered including a list of places as examples, rather than an
                exclusive list, but believes that the reference to ``other similar
                establishment operated as an enterprise engaged in the business of
                selling prepared food to the public'' should capture any additional
                places that are not specifically listed.
                 AMS has not modified the definition to state ``where meals or
                refreshments constituting food may be purchased'' as we believe that
                with this insertion, the exemption would be much broader than the plain
                meaning of the amended Act. AMS believes that the exemption is intended
                to cover ready-to-eat or prepared foods. To extend the exemption to all
                foods prepared, processed, or packaged in a retail food establishment,
                which would include bulk foods such as granola or packaged apples in a
                bin, would conflict with the requirement that foods subject to FDCA's
                labeling requirements are subject to disclosure. AMS notes it does not
                have statutory authority to extend this exemption to foods sold by
                manufacturers to restaurants and similar retail food establishments, or
                to foods marked as ``for institutional use'' or ``not for resale.''
                However, AMS anticipates that some of these foods would fall under this
                exemption because the entities selling or providing such food meet the
                definition of a similar retail food establishment.
                 AMS believes that the modified definition provides clarity and
                flexibility to regulated entities and is in accordance with the plain
                language of the amended Act. AMS also notes that exempt entities such
                as restaurants and similar retail food establishments may voluntarily
                provide disclosures of ``bioengineered food'' in accordance with the
                NBFDS if they so choose.
                c. Very Small Food Manufacturer
                 As required by the amended Act, AMS proposed that very small food
                manufacturers be exempt from displaying any form of disclosure
                regarding the presence of bioengineered ingredients or substances in
                their products. See 7 U.S.C. 1639b(b)(2)(G)(ii).
                 Comment: Some commenters did not support a disclosure exemption for
                very small food manufacturers. These commenters stated that the NBFDS
                should apply equally to all companies regardless of size or revenue.
                These commenters stated that excluding small companies would undermine
                the transparency and consistency necessary for building consumer trust.
                 AMS Response: Section 66.5(b) exempts very small food manufacturers
                from the disclosure requirement of the NBFDS, as required by the
                amended Act. Section 66.1 defines ``very small food manufacturer'' as
                ``any food manufacturer with annual receipts of less than $2,500,000.''
                AMS has made no changes to its proposal. In considering this
                definition, AMS must balance between providing regulatory flexibility
                for regulated entities and providing information to consumers
                [[Page 65846]]
                regarding the bioengineered status of their foods.
                 Comment: A few commenters stated that number of employees was an
                equally if not more suitable criterion than receipts for a small
                business. For instance, Congress has exempted small employers with 50
                or few employees from some other Federal statutory provisions, such as
                the Affordable Care Act (42 U.S.C. 18024(b)(2)) and the Family and
                Medical Leave Act (29 U.S.C. 2601). A commenter recommended the agency
                should revise the definition of ``very small food manufacturer'' to
                include either those that have less than $2.5 million in annual
                receipts or 50 or fewer employees.
                 Understanding that there is a statutory obligation to exclude very
                small companies from the disclosure requirement, some commenters
                suggested using the lowest reasonable financial threshold of $500,000
                consistent with those exempted from labeling requirements under the
                FDCA (Sec. 66.3(b) or limited to only ``cottage foods.''
                 A few commenters suggested revising the definition of ``very small
                food manufacturer'' to align with the Food Safety Modernization Act's
                definition for a ``very small business,'' which is defined as ``a
                business (including any subsidiaries and affiliates) averaging less
                than $1,000,000.''
                 AMS Response: To develop this definition, AMS considered small
                business definitions under FDA (21 CFR 101.9(j)(1)(i) and 21 CFR
                101.36(h)(1)) and U.S. Census Bureau (USCB) regulations. AMS evaluated
                the impact of applying various definitions of ``very small food
                manufacturer'' by estimating the number of firms that would be
                exempted, the number of products that would likely be exempt, and the
                proportion of annual industry sales that would be exempt under each
                exemption level. The NPRM and the final rule above included tables
                showing the cumulative percentage of firms, products (UPCs), and sales
                that would be exempt if the definition of ``very small food
                manufacturer'' were set at the top of each of the annual revenue ranges
                (based on USCB's 2012 Statistics of U.S. Businesses).
                 Applying the FDA exemptions (annual sales of no more than $500,000)
                at 21 CFR 101.9(j)(1)(i) and 21 CFR 101.36(h)(1) as described above
                would exempt 45 percent of firms, only one percent of products, and
                less than 0.5 percent of sales for food manufacturers, and only 17
                percent of firms and about 0.1 percent of products and sales for
                dietary supplement manufacturers. In conducting the Regulatory Impact
                Analysis, we estimated the impact of applying the USCB definition of
                very small businesses (fewer than 20 employees), which falls somewhere
                between the $2.5 million and $5 million annual sales cutoffs. We found
                that both of these revenue cutoff levels for the definition of ``very
                small food manufacturer'' would offer significantly greater relief for
                small manufacturers, while still having a relatively minor impact on
                the amount of information available to consumers. Exempting
                manufacturers with annual receipts of less than $2.5 million would
                provide regulatory relief to 74 percent of food manufacturers and 45
                percent of dietary supplement manufacturers, while reducing the number
                of products covered by four percent (two percent for dietary
                supplements), and the number of purchases covered by only one percent
                for both food and dietary supplement manufacturers.
                 AMS considered other revenue cutoffs, including those above and
                below $2,500,000 and considered other definitions from various sources.
                AMS considered number of employees as a criterion by which to determine
                the threshold and ultimately determined that we do not need to be bound
                by that methodology. Because food and dietary supplement manufacturers
                are in the manufacturing sector, they are both defined by number of
                employees for purposes of SBA size categorization. However, the firms
                defined as small or very small for purposes of the NBFDS all fall well
                below the SBA, so we do not feel we need to be bound by that
                methodology.
                 In addition, the small food manufacturer definition was defined to
                be consistent with the FDA definition of small manufacturer under its
                nutrition labeling standards, which uses annual receipts. AMS believes
                that the very small food manufacturer definition should be consistent
                with these other definitions.
                 AMS believes that annual receipts is a reasonable measure in
                determining the threshold for small businesses and specifically here,
                very small food manufacturers. Using total receipts is administratively
                simpler than tracking and demonstrating revenue by category for
                purposes of this rule. We do not expect that there are a significant
                number of firms for which this distinction would make a difference, but
                it would increase recordkeeping burden for all firms that fall under
                this exemption if it was based on food sales, rather than annual
                receipts.
                 The $2.5 million threshold will provide relief to small businesses
                but will not markedly decrease the number of products subject to
                disclosure. By defining ``very small food manufacturers'' as those with
                annual receipts below $2,500,000, about 74 percent of food
                manufacturers are exempt from mandatory disclosure, but 96 percent of
                products will still be subject to disclosure. An increase in revenue
                cutoff would increase the number of exempt businesses but would also
                increase the number of products exempt from disclosure. The definition
                of very small food manufacturer provides flexibility for small entities
                while providing information to consumers regarding the bioengineered
                status of their foods.
                 Comment: Some commenters expressed concern that exemptions did not
                extend to small retailers that display food for sale in bulk
                containers, including made-to-order products. Commenters explained how
                these products often have significant variation day-to-day depending on
                the ingredients available, and they can be difficult to trace. Several
                small entities stated that it is nearly impossible to change the labels
                on a daily basis, and that they would have to consider whether to
                continue to carry these items if required to label them under the rule.
                The Small Business Administration (SBA) Office of Advocacy recommended
                broadening the definition of ``very small food manufacturer'' to allow
                more small businesses an opportunity to take advantage of the
                exemption. Similarly, they advocated extending the exemption to small
                retailers to allow small or very small retailers to be exempt from the
                bulk container labeling requirement.
                 Another commenter suggested that these revenue limits should extend
                to dietary supplement manufacturers, and that AMS should consider
                exempting foods sold by manufacturers to restaurants and similar
                establishments, and foods marked as ``for institutional use'' or ``not
                for resale'' because these foods are not consumer-facing and not
                required to carry consumer-directed information such as nutrition
                facts. In addition, medical foods, such as enteral foods, provided
                under a physician's care should also be exempted from these
                disclosures.
                 AMS response: With respect to comments urging AMS to extend this
                exemption to small retailers, AMS states that this exemption is
                statutorily mandated and cannot be extended to small retailers. To the
                extent that a small retailer is also a very small food manufacturer,
                they may be able to take advantage of the exemption in that instance.
                Additionally, foreign very small food manufacturers shipping
                [[Page 65847]]
                prepackaged food products intended for U.S. retail sale are exempt from
                regulation. Importers are ultimately responsible for verifying whether
                or not foreign food manufacturers are subject to the requirements of
                the NBFDS.
                 AMS acknowledges commenters' concerns regarding labeling foods sold
                by manufacturers to restaurants and similar establishments, foods
                marked as ``for institutional use'' or ``not for resale,'' and medical
                foods. AMS notes that if such foods are subject to the labeling
                requirements of the FDCA, then they are subject to the NBFDS. Such
                foods may be exempt if they fall under statutory exemptions, but AMS
                does not have statutory authority to create exemptions for such foods
                in this rulemaking.
                d. Food Certified Under the National Organic Program
                 AMS proposed that foods certified organic under the National
                Organic Program shall be exempt from disclosure.
                 Comment: Many commenters that weighed in on the exemption of foods
                certified under the National Organic Program (NOP) supported the
                exemption. Many commenters requested that AMS clarify that the NBFDS
                shall not: Affect the definition of ``excluded methods'' or any other
                definition or practice under the NOP, circumvent the letter or intent
                of the organic standard, or require any amendment to the organic
                standard, and that organic certification shall be sufficient to claim
                the absence of bioengineering in the food, such as ``not
                bioengineered,'' ``not genetically engineered,'' ``non- GMO,'' or
                another similar claim. A commenter recommended adding language to Sec.
                66.3 to state that a food or food ingredient that is not required to
                bear a BE disclosure does not necessarily mean that the food or food
                ingredient qualifies for an absence claim such as ``non-GMO.'' The
                commenter also suggested that food certified under the NOP may bear an
                absence claim.
                 Additionally, other commenters stated that food certified under
                other international organic product regulations with which the NOP has
                established either recognition or equivalency agreements would be
                exempt from this rule. These types of agreement are currently in place
                with nine countries or regional trading partners, including Canada,
                Mexico, and the European Union.
                 AMS Response: AMS has ensured that the final rule does not affect
                the NOP regulation or products certified as organic under the NOP.
                Subtitle F states that ``In the case of food certified under the
                national organic program established under the Organic Foods Production
                Act of 1990 (7 U.S.C. 6501 et seq.), the certification shall be
                considered sufficient to make a claim regarding the absence of
                bioengineering in the food, such as `not bioengineered', `non-GMO', or
                another similar claim.'' 7 U.S.C. 6524. The NPRM stated that implicit
                in the statutory provision is that certified organic foods are not
                subject to bioengineering disclosure. This implication, in conjunction
                with the Secretary's authority to consider establishing consistency
                between the NBFDS and the Organic Foods Production Act, permits a
                regulatory exemption for products certified organic under the NOP. See
                7 U.S.C. 1639b(f). The NPRM proposed that Sec. 66.5(e) would exempt
                certified organic foods from bioengineered disclosure, so food
                manufacturers, retailers, and importers of certified organic food would
                not be required to maintain additional records to demonstrate that the
                organic food is not bioengineered for purpose of the NBFDS regulations.
                 The focus of the NBFDS is on establishing a disclosure standard
                with respect to any bioengineered food and any food that may be
                bioengineered. Although the amended Act mentions absence claims, the
                mandate of the NBFDS is not on absence claims. Therefore, AMS has
                reframed this provision as a statutory exemption and will not
                incorporate absence claims in the NBFDS. The amended Act's references
                to absence claims for foods certified under the NOP are self-executing.
                 AMS agrees with commenters that a technical correction to this
                provision is required. This exemption is intended to cover all NOP
                certified label categories (``100% Organic,'' ``Organic,'' and ``Made
                with Organic''). Accordingly, Sec. 66.5(e) is revised to read ``Food
                certified under the National Organic Program.'' In addition, AMS
                confirms that food certified under other international regulations with
                which the NOP has established recognition or equivalency agreements
                would be exempt from the NBFDS.
                 Comment: Other commenters requested that the NBFDS also exempt from
                disclosure foods certified/verified to the AMS Processed Verified
                Program (PVP); non-GMO certification programs or third-party
                verification programs such as the Non-GMO Project, NSF True North
                Protocol, or SGS Non-GMO Certification; and other credible schemes. In
                addition, commenters suggested that AMS should help consumers
                distinguish among these many claims and standards.
                 AMS Response: AMS only has authority to exempt food certified under
                NOP. However, to the extent that these third-party verified programs
                meet the standards under Sec. 66.9 and/or recordkeeping requirements
                associated with non-disclosure, then regulated entities employing these
                external frameworks may use associated paperwork to show that their
                products are not BE to the extent the scope of such programs align with
                that of this rule. As discussed previously, regulated entities seeking
                to use absence claims should ensure that such claims comply with all
                applicable Federal laws and are otherwise truthful and not misleading.
                 Comment: Another commenter stresses that the NOP has recognized
                that ingredients developed with the use of mutagenesis, such as
                docosahexaenoic acid (DHA) algal oil, may be used as an ingredient in
                organic foods. Under the NOP, bioengineering is considered an
                ``excluded method'' that cannot be used. The NBFDS needs to make clear
                that mutagenesis is excluded from the definition of bioengineering.
                 AMS Response: AMS agrees that NOP regulations require that no
                ingredient may be bioengineered. See 7 CFR 205.301(f)(1) and 205.105(e)
                and the definition of ``excluded methods'' in 7 CFR 205.2. In addition,
                AMS agrees that mutagenesis is a conventional breeding method.
                8. Threshold
                 The NPRM solicited comments on an array of issues pertaining to the
                threshold exemption. This proposed exemption consists of three
                alternative threshold options that would exempt products from
                disclosure depending on the amount of a bioengineered substance that
                they contain.
                a. Alternative 1-A: 5 Percent of Inadvertent or Technically Unavoidable
                 The first proposed alternative would establish that food in which
                an ingredient contains a BE substance that is inadvertent or
                technically unavoidable, and accounts for no more than five percent
                (5%) of the specific ingredient by weight, would not be subject to
                disclosure as a result of that one ingredient.
                 Comment: Many commenters generally agreed with Alternative 1-A.
                These commenters suggested that this threshold offered adequate
                disclosure, the most flexibility, and limited impacts on the food
                supply chain. They stated that many parties throughout the food supply
                chain use the same manufacturing processes and equipment for both BE
                and non-BE crops, so a 5 percent threshold would allow for the
                [[Page 65848]]
                continued coexistence of existing supply chains without significantly
                increasing costs. They also noted that the standard is a marketing
                standard and not one based on health and safety.
                 AMS Response: AMS believes that Alternative 1-A provides the right
                balance between disclosing and minimizing the potential impact on the
                food supply chain. BE crops and non-BE crops are often grown in close
                proximity and, depending on the crop, cross-pollination may occur.
                Similarly, BE and non-BE crops are often harvested and processed using
                the same equipment, which means trace amounts of BE crops may
                unintentionally be mixed with non-BE crops. The proximity of
                bioengineered crops to non-bioengineered crops, and the use of the same
                production, transportation, and processing equipment allows for the
                coexistence of different production systems without unnecessarily
                increasing food production costs. Because the NBFDS is a marketing
                standard and not related to health or safety, any threshold amount must
                balance the benefits gained from disclosure with the costs to implement
                that disclosure. AMS believes Alternative 1-A appropriately identifies
                that balance.
                 Comment: Some commenters noted that countries such as Canada,
                Indonesia, and Japan, have incorporated a 5% threshold into their
                mandatory and voluntary disclosure regimes. The commenters state that
                it would be prudent to mirror that level to support regulatory
                certainty in the international food supply chain.
                 AMS Response: AMS acknowledges that some U.S. trading partners have
                adopted a five percent threshold, either on a mandatory or voluntary
                basis, and that aligning our threshold amount with those countries will
                facilitate trade.
                 Comment: Some commenters proposed variations of Alternative 1-A,
                including hybrid schemes that would adopt Alternative 1-A for the
                inadvertent and unintentional presence of a bioengineered substance,
                and then an additional threshold for intentional use of bioengineered
                substances. These commenters believed such a hybrid method would give
                food manufacturers flexibility and allow them to intentionally use a de
                minimis amount of bioengineered ingredients without requiring
                disclosure.
                 AMS Response: AMS determined that food containing any amount of a
                bioengineered substance that is not inadvertent or unintentional is
                subject to disclosure. Therefore, whenever a regulated entity
                intentionally uses a food or food ingredient that contains a
                bioengineered substance, no matter the amount, that food would be
                subject to disclosure, so long as the food is not otherwise exempt. AMS
                believes that allowing for the intentional use of food and food
                ingredients that contain a bioengineered substance without requiring
                disclosure would undermine consumer trust and confidence in the NBFDS.
                 AMS also believes that any sort of hybrid or dual threshold scheme
                unnecessarily complicates compliance for regulated entities and
                increases the likelihood of confusion among consumers. The agency is
                not aware of customary or usual business records that would allow a
                regulated entity to accurately track the percentage of a bioengineered
                substance that is intentionally used in a food, and any such
                requirement to create new records unnecessarily increases the cost and
                complexity of complying with the NBFDS. Similarly, a marketing standard
                should be designed to clearly communicate information to consumers and
                a hybrid or dual threshold would unnecessarily complicate the type and
                amount of information being communicated to consumers.
                 Comment: Some commenters stated that AMS should not measure the
                threshold by weight, but by other means, such as a percent of rDNA that
                is present in the food or food ingredient. They suggested that this
                approach is more consistent with the BE labeling regimes of other
                countries and existing industry standards.
                 AMS Response: AMS agrees that the phrase ``by weight'' should be
                removed from the threshold exemption. AMS understands that existing
                industry standards and the BE labeling requirements of other countries
                do not use weight to calculate the threshold, but typically calculate
                such threshold amounts as the BE content of an item or ingredient
                relative to the non-BE content of that same item or ingredient. AMS
                believes existing industry standards are sufficient.
                 Comment: A number of commenters suggested that AMS should adopt
                Alternative 1-A because the NOP allows for up to 5 percent of products
                that are not certified organic to be used in organic products.
                 AMS Response: While we recognize that the NOP regulations at 7 CFR
                205.301(b) suggest that products labeled as organic may contain 5
                percent of ingredients that are not organic, that would be an
                incomplete understanding of that regulation. That regulation also
                states that this 5 percent must be organic unless the organic form is
                not commercially available and must be nonagricultural substances or
                non-organically produced agricultural products produced consistent with
                the National List in 7 CFR part 205, subpart G. The NOP regulations
                further require that this 5 percent not be bioengineered. See 7 CFR
                205.301(f)(1) and the definition of ``excluded methods'' in 7 CFR
                205.2. Thus, the NOP regulations are not an analogous situation that
                would be a rationale for adopting a 5 percent threshold.
                b. Alternative 1-B: 0.9 Percent Inadvertent or Technically Unavoidable
                 Comment: Many commenters, including consumers, consumer groups,
                food manufacturers, and some industry trade groups were generally in
                favor of Alternative 1-B. Commenters noted that this threshold most
                closely aligns with consumer expectations, the threshold used by many
                trading partners, and existing domestic standards currently in use for
                voluntary BE and non-BE labeling programs. Additionally, a commenter
                stated that farmers, testing organizations, and food manufacturers have
                used 0.9% as the maximum threshold since 2003. The commenters argued
                that adopting the 0.9% threshold would avoid confusion into the
                marketplace and would ease the process of negotiating and executing
                mutual recognition agreements which would help stimulate trade between
                countries.
                 AMS Response: AMS recognizes that uniformity and consistency
                promote efficiency and lessen confusion. We note, however, that there
                is not one consistent threshold used for all foods and inputs
                domestically or by all trading partners. When determining whether the
                absence or presence of a bioengineered food or substance requires
                disclosure, domestic voluntary standards and/or foreign governments use
                thresholds greater than 0.9%, including 5%, under specified
                circumstances. AMS, however, must balance the costs and benefits for
                regulated entities and consumers in the United States when establishing
                thresholds for the NBFDS. A threshold substantially lower than 5% per
                ingredient may not be practical or achievable in production systems
                across a range of commodity groups. Furthermore, the requirements to
                attempt to meet a 0.9% threshold would be overly burdensome in
                proportion to the goal of providing consumers with a suitable amount of
                information on the presence of bioengineered substances in food
                products. AMS believes a threshold of 5% per ingredient does the best
                job in balancing the costs and benefits for regulated entities and
                consumers in the United States.
                [[Page 65849]]
                 Comment: Consumer transparency is another reason commenters give
                for supporting Alternative 1-B. They suggest that the relatively wide
                use of Alternative 1-B internationally and domestically promotes
                consumer transparency, and that adopting Alternative 1-B would ensure
                that the greatest number of products are subject to disclosure while
                still allowing for co-existence of BE and non-BE foods. A food
                manufacturer states that consumers recognize the potential for
                inadvertent and technologically unavoidable commingling of BE
                substances and accept standards in use today that allow for the
                presence of a BE substance up to the 0.9% level, including companies
                that voluntarily disclose and voluntary standards established by third-
                party organizations for non-BE labels. Some commenters suggested that
                any higher threshold amount would negate the purpose of labeling and
                not match consumer expectations for transparency. Commenters also said
                that Alternative 1-B would promote good practices by companies because
                they would be able to segregate ingredient streams, while still
                allowing for some inadvertent or unavoidable introduction of BE
                material.
                 AMS Response: AMS understands that a lower threshold would likely
                result in a larger number of products being subject to disclosure. AMS
                also understands that if a threshold is set too low, regulated entities
                may have to label almost everything and the information may become less
                meaningful to consumers. Ensuring each ingredient stream remains below
                the threshold of 0.9% may not always be practical or achievable for all
                commodity groups, or the processes and equipment required to do so may
                increase food production costs. AMS believes a threshold of 5% per
                ingredient provides the best balance between reducing costs for
                regulated entities and maximizing information conveyed to consumers.
                 Comment: Several comments propose hybrid alternatives. A few
                commenters suggested combining the requirements of Alternative 1-A
                allowing for the inadvertent or technically unavoidable presence of a
                BE substance up to 5% in any ingredient with the requirements of
                Alternative 1-C to also allow for the intentional use of a
                bioengineered substance up to 0.9% in the finished product by weight.
                Another commenter suggested allowing a product to contain up to 0.9%
                total ingredients that had not been tested for BE substances, and
                requiring each such ingredient to comprise no more than 0.5% of the
                finished weight of the product, minus added water and salt. Other
                commenters were opposed to a hybrid approach. They argue that this
                would be more confusing and difficult to explain to consumers and would
                suggest a lack of transparency.
                 AMS Response: AMS understands the desire for flexibility that a
                hybrid approach might create. However, AMS believes the threshold is
                intended to recognize the complexities of the supply chain, not
                necessarily create a mechanism to avoid BE food disclosure. A simple,
                straight forward threshold that allows for the unintentional or
                technically unavoidable presence of a BE substance acknowledges the
                complexities of the supply chain while increasing transparency. A
                hybrid or dual threshold scheme would add an unnecessary degree of
                complexity that would confuse to consumers and increase the
                administrative burden on regulated entities. The additional sampling,
                testing, and recordkeeping requirements of a multi-pronged threshold
                scheme would likely go beyond the customary business records currently
                kept by regulated entities and AMS does not intend to unnecessarily
                increase the administrative burden of the rule on regulated entities.
                 Comment: A small number of commenters in response to Alternatives
                1-A and 1-B suggested making two minor changes to clarify how the
                threshold would be applied and how it would be calculated. The first
                recommendation was to change ``an'' to ``any'' to clarify that the
                threshold applied to all ingredients. The second recommendation was to
                remove ``by weight'' because some methods of testing for threshold
                amounts do not calculate by weight, but rather as a percent of DNA.
                 AMS Response: AMS has changed the language used to define the
                threshold to make it clear that it applies to all ingredients. AMS also
                removed the reference to ``by weight'' to clarify that existing
                industry standards for determining the amount of a BE substance that is
                present in a food or food ingredient would be appropriate for purposes
                of applying the threshold exemption.
                 Comment: A number of comments supported Alternative 1-B but called
                on AMS to establish very specific testing requirements to guarantee
                manufacturers applied 0.9% thresholds meaningfully. They state that the
                testing should be conducted using the real-time or digital polymerase
                chain reaction (PCR) method conducted by an ISO 17025 accredited
                laboratory, conducted on samples where laboratory controls indicate the
                DNA input is sufficiently intact to allow for valid quantitative
                analysis, and follow a meaningful sampling plan in accordance with
                industry standards. Regulated entities would be required to adhere to
                these testing standards.
                 A commenter who was a food manufacturer stated that many food
                manufacturers do not test food products for BE substances. They rely
                instead on certifications of food ingredients from suppliers. The
                commenter stated that food importers in Europe are not required to test
                imported products. They stated that checking certifications from
                suppliers in place of testing was reasonable because suppliers are more
                familiar with ingredients, they already test their products, and there
                is no requirement that food manufacturers conduct further testing.
                 AMS Response: AMS understands the desire for uniform application of
                the threshold and a regimented approach to ensure that regulated
                entities are complying with all aspects of the NBFDS, including the
                threshold. However, AMS is aware that strict requirements on
                methodologies, processes, testing, and recordkeeping all increase the
                cost of compliance with the NBFDS. Because this is a marketing standard
                that provides additional food information to consumers, there is little
                benefit to highly prescriptive testing and recordkeeping requirements.
                AMS has the authority to enforce compliance with the NBFDS and believes
                the best way to ensure compliance is through the enforcement process
                described in the final rule, not through strict, burdensome
                regulations.
                 Comment: Those opposed to Alternative 1-B suggested that this
                alternative is overly restrictive, especially for a marketing standard.
                A few noted that Alternative 1-B would lead to over-disclosure because
                some companies would likely consider any commingled food as BE food.
                They said this could discourage consumers from purchasing products with
                BE labels. Others suggested that a 0.9% threshold would denigrate
                biotechnology and reduce choices for both farmers and consumers.
                Similarly, some commenters state that they believe Alternative 1-B
                treated BE substance as a contaminant. A few commenters believe that
                any threshold below 5% is not practical or achievable for many
                commodities. They state that traceability requirements would be overly
                burdensome in relation to the benefits derived from providing
                additional information to consumers. They believe that this would
                result in technology avoidance and a stifling of innovation. A few
                comments suggested that recordkeeping burdens would be costly at a 0.9%
                threshold because
                [[Page 65850]]
                regulated entities would have to account for traces of BE substance
                down to a very small degree throughout the entire supply chain.
                Although food manufacturers keep records now, these commenters believe
                such records are usually on a finished product basis and not by
                ingredient.
                 AMS Response: AMS understands the concerns raised by these
                comments. AMS is aware that setting a threshold too low may have
                practical limitations on the supply chain and could increase costs as
                entities throughout the supply chain implement additional measures to
                maintain a lower threshold on the food and ingredients they produce.
                While AMS understands that some supply chains and some countries
                currently produce food and ingredients that contain a BE substance
                below 0.9 percent, AMS does not want to unnecessarily increase the
                regulatory burden and costs on supply chains that may not currently be
                meeting that threshold. Moreover, those who are currently meeting the
                threshold for 0.9 would still be in compliance with Alternative 1-A,
                because ingredients that contain an inadvertent or technically
                unavoidable BE substance below 0.9 percent are still below the 5
                percent threshold in Alternative 1-A.
                 Comment: A few comments questioned how AMS would interpret
                Alternatives 1-A and 1-B with respect to what is inadvertent or
                technically unavoidable, and whether such a definition would require
                any intentional use of a BE substance to be disclosed.
                 AMS Response: AMS has clarified in the final rule that any
                intentional use of a BE substance requires disclosure.
                c. Alternative 1-C: 5 Percent of Intentional Use
                 One of the exemptions from food labeling proposed by AMS was
                Alternative 1-C. Alternative 1-C would exempt food from disclosure if
                the ingredient or ingredients in the food containing a BE substance
                accounted for no more than five percent (5%) of the total weight of the
                food in final form. AMS also sought comments on whether the specific
                threshold amount of 5% should be increased or decreased.
                 Comment: Comments in favor of Alternative 1-C suggest that this
                approach would allow for the de minimis use of BE food ingredients
                without requiring disclosure. They also indicate that this approach
                would align with that used in some other countries. Supporters of this
                alternative also suggest that this approach is the most supportive of
                bioengineering. Some commenters also believe this alternative would
                have the least impact on domestic and international value chains and
                international trade. Similarly, they suggest this would also be the
                option most compatible with our North American trading partners, Mexico
                and Canada, neither of which mandate labeling.
                 AMS Response: AMS understands that for some commenters, Alternative
                1-C would increase the amount of flexibility under the standard and
                allow for the de minimis use of a BE substance without requiring
                disclosure. Although Alternative 1-C could be used in other countries,
                AMS is aware that there is no universal threshold level and that any
                choice of threshold will have implications on trade. While some have
                suggested that Alternative 1-C could cost less to implement because
                fewer products are labeled, AMS believes that current industry
                practices track the presence of absence of BE substances in an
                ingredient and not necessarily the specific amount. Adding the
                requirement to track the amount of a BE substance in each ingredient,
                and subsequently the final product, could unnecessarily increase costs
                for regulated entities, even though the number of products subject to
                disclosure may ultimately be less.
                 Comment: Some commenters suggested that Alternative 1-C would
                reduce consumer confusion.
                 AMS Response: AMS does not agree with those suggesting that a 5%
                threshold as proposed in Alternative 1-C would reduce consumer
                confusion. AMS believes it will lead to the exemption of a wider array
                of foods from labeling and cause consumers to have less confidence and
                trust in the NBFDS. AMS believes that providing more information and
                not creating an exemption for the intentional use of a BE substance is
                likely to provide more BE food information to consumers.
                 Comment: Several commenters suggested Alternative 1-C but with an
                amount lower than 5 percent--such as 0.9 percent. One commenter said
                that such an approach would exempt most fermentation/probiotic, viable
                enzymes, and defining/characterizing ingredients.
                 AMS Response: A threshold substantially lower than 5% per
                ingredient may not be practical or achievable in production systems
                across a range of commodity groups. Furthermore, the traceability
                requirements to attempt to meet a 0.9% threshold would be overly
                burdensome in proportion to the goal of providing consumers with a
                suitable amount of information on the presence of bioengineered
                substances in food products. AMS believes a threshold of 5% per
                ingredient does the best job in balancing the costs and benefits for
                regulated entities and consumers in the United States. AMS is allowing
                regulated entities to voluntarily disclose (Sec. 66.116) the presence
                of bioengineered substances even when not otherwise required to do so.
                This will help regulated entities to meet demands on their food
                products to conform to standards used in other programs. AMS will also
                work to develop mutual recognition arrangements so that countries might
                agree to recognize each other's standards as comparable.
                 AMS understands that some food products may include only a very
                small amount of a BE substance, such as enzymes or other products
                created in a controlled environment. Similarly, if there are other
                products that people believe should be exempted from disclosure, AMS
                has established a process to exclude them under factors and conditions.
                For reasons stated above, AMS believes that Alternative 1-A is the
                appropriate threshold and that any intentional use of a bioengineered
                substance should be disclosed.
                 Comment: One commenter supports the 5% threshold, but believes it
                should be measured using the percent based on volume of the BE
                substance in the ingredient, rather than ingredient weight. They state
                that other countries quantify the threshold by the volume of BE
                substance present in ingredients. They assert that a BE threshold
                defined by weight is not enforceable.
                 AMS Response: AMS has determined Alternative 1-A is the best
                approach, but has removed the phrase ``by weight'' from the regulatory
                text reflecting that option.
                 Comment: A majority of comments received regarding Alternative 1-C
                are opposed to this alternative. Many believe that this alternative is
                not transparent enough and that it would exempt wide amounts of food
                items from labeling. They suggest this would undermine consumer
                expectations, and possibly damage consumer confidence and trust in the
                labeling program. Commenters expressed the opinion that consumers
                wanting to avoid BE substances would not support Alternative 1-C
                because they would believe it was not low enough to be meaningful. A
                number of comments suggested that Alternative 1-C subverted the amended
                Act by allowing the intentional use of a BE substance into food
                products without requiring labeling.
                 Another large group of comments state that the 5% threshold amount
                will result in the rejection of our exports by countries with lower
                threshold amounts, damaging our ability to trade
                [[Page 65851]]
                food products in foreign markets. A food exporter expressed concern
                with the lack of conformity between Alternative 1-C and disclosure
                requirements in other countries. The exporter said that this lack of
                conformity would add complexity to their efforts to export their
                products because they would have to make disclosure adjustments for
                each country with differing disclosure laws.
                 AMS Response: AMS understands the concerns raised by Alternative 1-
                C, AMS has not chosen this alternative. AMS will not allow an exemption
                from labeling when a regulated entity intentionally introduces a
                bioengineered substance into a food product.
                 AMS believes that exporters are already complying with the laws of
                the countries into which they import their products and to the degree
                possible, AMS has tried to minimize any potential impacts on
                international trade. If other countries have a BE labeling program, AMS
                is also working to develop mutual recognition agreements where the
                requirements of countries with similar labeling requirements may be
                recognized in the United States.
                 Comment: A commenter stated that the EU uses ``accidental'' and
                ``technologically unavoidable'' instead of inadvertent and technically
                unavoidable. The exporter states that the EU defines accidental to
                include BE adulteration occurring during cultivation, transportation,
                or processing. AMS interprets inadvertent or technologically
                unavoidable as ``insignificant amounts of a BE substance in food that
                resulted from the coexistence of BE and non-BE foods in the supply
                chain'' [83 FR 19869]. This commenter presses AMS to interpret
                inadvertent in a manner identical to EU's ``accidental,'' or in a way
                that was consistent with the EU definition for ``accidental.''
                 AMS Response: AMS is not in a position to interpret how the EU
                implements their BE labeling law, but does intend to interpret AMS
                regulations in a manner that minimizes the impact on international
                trade.
                 Comment: Several commenters questioned how AMS will treat
                ingredients that are not considered bioengineered foods, such as
                incidental additives, for purposes of determining whether a food is
                exempt from labeling under the threshold.
                 AMS Response: If an ingredient is not considered a bioengineered
                food under another section of the NBFDS, such as an incidental
                additive, a regulated entity does not need to apply the threshold
                exemption to that ingredient to determine whether a food is disclosed
                as BE. If an ingredient is otherwise not a bioengineered food, it will
                not trigger labeling due to the presence of a bioengineered substance.
                 Comment: A commenter suggested that for Alternative 1-A and 1-B,
                any intentional use of a BE substance would require labeling even if
                the threshold limit is not exceeded. They then pointed out that to
                avoid this, food manufacturers would have to establish records to show
                that any BE substance in the food came only from inadvertent and
                technically unavoidable sources. This may require the manufacturer to
                keep additional records than those currently generated.
                 AMS Response: AMS intends to require only customary business
                records. For purposes of ensuring compliance with the threshold, AMS
                will look to the records to determine whether a regulated entity
                intended to purchase non-BE ingredients and the documentation they have
                from their suppliers indicating as much.
                 Comment: A commenter suggested that AMS should not require the
                exclusion of water and salt from the threshold calculation. This
                commenter stated that the finished product should be in the same form
                as it would be when presented to the consumer and excluding the weight
                of the water and salt from the calculation of the amount of BE would
                add complexity. The manufacturers would have to adjust their
                calculations to account for only the amount of a BE substance in the
                dry ingredients in the absence of water or salt.
                 AMS Response: AMS did not choose Alternative 1-C and this comment
                is inapplicable to Alternative 1-A. Water and salt do not contain DNA
                and would therefore, as individual ingredients under Alternative 1-A,
                never trigger disclosure.
                 Comment: A few commenters stressed that testing for BE content
                should not be a requirement. They emphasized the use of proper
                documentation, supplier assurances, along with existing controls should
                suffice. One commenter stated that in some cases statistical and
                qualitative tests could be used to obtain qualitative results and
                provide adequate verification of BE content. The commenters suggest
                that testing, such as PCR testing, would drive up costs significantly,
                decrease efficiencies in the handling and distribution systems,
                introduce new market risks, and disrupt global trade.
                 AMS Response: AMS does not intend to prescribe specific tests or
                methodologies for verifying compliance with the threshold. AMS intends
                to rely on customary business records.
                9. Appearance and Placement of Disclosure
                 The NPRM solicited comments on the size, legibility, appearance,
                and location under ordinary shopping conditions for the BE food
                disclosure. The NPRM also solicited comments on the placement of the BE
                disclosure. AMS received several comments on those topics.
                 Comment: Many commenters supported the NPRM goal of ensuring that
                the BE food disclosure was likely to be read and understood under
                ordinary shopping conditions. Commenters suggested that the disclosure
                be concise, large enough to read, easily located, and intelligible. One
                commenter recommended the BE food disclosure size be consistent with
                FDA regulations at 21 CFR 101.2(c) governing ``customary conditions of
                purchase.''
                 AMS Response: AMS agrees that the BE food disclosure should appear
                prominently and conspicuously on the label, such that it can be read
                and understood under ordinary shopping conditions. This position aligns
                with other mandatory food labeling requirements, including the FDA
                regulations at 21 CFR 101.15.
                 Comment: Several commenters felt that the term BE was misleading
                and confusing to consumers. Commenters suggested that a disclosure
                using GMO would be simple, clear and suffice.
                 AMS Response: AMS understands and appreciates commenters request
                for clear, understandable disclosure language that references a
                familiar term like ``genetically modified organism.'' However, the
                amended Act clearly sets forth use of the term bioengineering. AMS
                acknowledges that the amended Act authorizes the Secretary to determine
                other terms that are similar to ``bioengineering.'' 7 U.S.C. 1639(1).
                But, for purposes of ensuring disclosure consistency and minimizing
                marketplace confusion, AMS has chosen not to adopt other similar terms
                and to require the use of the term ``bioengineered.'' AMS will engage
                in outreach and education to provide information about the new
                disclosure term.
                 Comment: Some commenters recommended AMS implement strong
                guidelines for the type size used for the BE disclosure. One commenter
                recommended that size requirements be defined with a minimum letter
                height and logo size. Another commenter requested that AMS provide
                uniform requirements for the disclosure location and size. Others
                suggested that the disclosure be similar in size of the product/brand
                name or at least 75 percent of the font size.
                [[Page 65852]]
                 Several commenters requested flexibility in determining the
                disclosure's size and placement. One stated that AMS should give
                regulated entities flexibility in selecting the size and placement
                options that provide the best proportions for displaying the disclosure
                while also complying with the requirement for maintaining high
                visibility. Commenters also proposed if AMS specifies a disclosure size
                that it should range from 0.5-1 inch in diameter.
                 AMS Response: AMS acknowledges that font and type size contribute
                significantly to the consumers' ability to access information provided
                on food labels. As such, AMS considered prescribing specific type sizes
                for different disclosure options. After considering comments, however,
                AMS determined that the number and type of disclosure options, combined
                with the variety of food package sizes, shapes, and colors, would make
                prescriptive requirements too difficult to implement. Therefore, AMS is
                allowing regulated entities responsible for the disclosure to have
                flexibility in implementing the disclosure requirements. The NBFDS
                requires that disclosure text ``. . . be of sufficient size and clarity
                to appear prominently and conspicuously on the label, making it likely
                to be read and understood by the consumer under ordinary shopping
                conditions.''
                 Comment: Most commenters supported AMS's proposal for placement of
                the BE disclosure. One commenter recommended that the disclosure had to
                be placed on the information panel if room allowed. The commenter
                recommended that the disclosure needed to be consistent, and not at the
                discretion of the manufacturer.
                 AMS Response: AMS acknowledges commenters' support for the NPRM's
                proposed placement of the BE disclosure. AMS also agrees that the
                information panel is an appropriate location for the BE disclosure
                because consumers who are interested in additional information on food
                products will generally look for it on the information panel. Section
                III.A.4 of this rule provides a more detailed rationale regarding AMS's
                position on placement of the BE disclosure.
                 Comment: One commenter recommended that manufacturers be given
                greater flexibility in determining the disclosure placement and size.
                Another commenter also stated that there should be the option of
                placement and size of disclosure on the package. One commenter
                recommended that the disclosure be placed on any of the panels of the
                food package provided the disclosure is displayed prominently on the
                label and does not interfere with mandatory nutrition labeling
                requirements.
                 AMS Response: AMS agrees that manufacturers may need some
                flexibility when determining the size and placement of a BE disclosure.
                Based on its review of comments, AMS will allow manufacturers to
                include the disclosure on an alternate panel likely to be seen by a
                consumer under ordinary shopping conditions if there is insufficient
                space on either the principal display or information panels. Similarly,
                the NBFDS allows flexibility in the disclosure size. For a detailed
                explanation of AMS's position regarding the appearance and placement of
                the BE disclosure, refer to Section III.A.3 and Section III.A.4 of this
                rule, respectively.
                10. Text Disclosure
                 AMS solicited comments on adoption of the text disclosures:
                ``Bioengineered Food,'' ``Contains Bioengineered Food Ingredients,''
                ``May Contain Bioengineered Food Ingredients,'' and ``May Be
                Bioengineered.''
                 Comment: Several commenters believe the phrases ``may contain a
                bioengineered food ingredient'' and ``may be a bioengineered food''
                would lead to more confusion for consumers who want to know the exact
                nature of the ingredients being consumed by their families. Some
                comments noted that many of the countries with mandatory disclosure
                requirements do not allow the use of a ``may'' statement. Some
                commenters stated that a ``may'' claim should be permissible to
                describe foods that contain ingredients where the sourcing may change
                from a bioengineered to a non-bioengineered source. Other comments
                suggested that regulated entities know and have records to demonstrate
                the bioengineered status of their foods and should not be permitted to
                use ``may'' claims when they know with certainty that their foods are
                bioengineered.
                 Commenters suggested that a symbol, such as an asterisk, could be
                used to denote an ingredient that was BE. Commenters also suggested
                that the disclosure statement should provide a declarative statement
                designating the BE information.
                 AMS Response: AMS appreciates commenters' desire for USDA to
                implement clear standards for disclosing bioengineered food products
                using on-package text. We recognize that consumers want additional
                information about the food they eat and may see the use of the word
                ``may'' in the text disclosure as ambiguous. As a result, AMS has
                removed the ``may'' disclosure option and will only allow regulated
                entities to make affirmative BE food disclosures.
                 Comment: Commenters requested straightforward labeling that would
                not confuse consumers by using unfamiliar terms. Many commenters
                suggested allowing or mandating other phrases such as ``genetically
                modified organism,'' ``GMO'' or ``genetic engineering.'' Another
                commenter suggested using the phrase ``includes'' rather than
                ``contains.'' Some commenters also requested clarification regarding
                whether regulated entities could provide additional statements
                regarding bioengineered foods as part of their disclosures.
                 AMS Response: AMS understands and appreciates the desire for clear,
                straightforward text disclosure language. The Secretary believes that
                the language used by Congress in the amended Act clearly and accurately
                describes the technology and provides consumers with the information
                they desire. AMS will engage in outreach and education to provide
                information about the new disclosure term. AMS also notes that,
                pursuant to Sec. 66.118, nothing in the final rule prohibits regulated
                entities from providing additional statements or other claims regarding
                bioengineered foods and bioengineered food ingredients, so long as such
                statements are consistent with all other applicable laws and
                regulations.
                 Comment: Some commenters expressed concern about the disclosure
                options for foods contained on the proposed non-high adoption list of
                bioengineered foods. One commenter was concerned about the possibility
                that manufacturers could use loopholes to avoid having to say a food is
                bioengineered.
                 AMS Response: AMS acknowledges the concerns and notes that, as part
                of the NBFDS, AMS has developed a List of Bioengineered Foods for human
                consumption that may be produced anywhere in the world. This list
                establishes a presumption about what foods might require disclosure
                under the NBFDS, but does not absolve regulated entities from the
                requirement to disclose the bioengineered status of food and food
                ingredients produced with foods not on the list when the regulated
                entities have actual knowledge that such foods or food ingredients are
                bioengineered.
                 AMS also appreciates the concerns about regulated entities
                complying with the disclosure requirements. As such, subpart E of this
                rule outlines the enforcement regulations established to ensure
                compliance with the regulations.
                [[Page 65853]]
                 Comment: Many commenters requested the use of the phrase
                ``bioengineered ingredients used in this product,'' regardless of the
                amount of bioengineered foods or ingredients contained in the product.
                Similarly, other commenters stated where trace amounts of bioengineered
                ingredients are identified, the entire food product should be labeled
                ``contains BE ingredients.''
                 AMS Response: The amended Act directs the Secretary to determine
                the amount of a bioengineered substance that may be present in a food,
                as appropriate, in order for the food to be a bioengineered food.
                Requiring a label for food that includes a bioengineered substance that
                falls below this amount would contravene Congress's intent.
                11. Symbol Disclosure
                 AMS solicited comments on three alternatives for disclosure
                symbols, each in full color and black and white. All three include some
                variation of the letters BE, short for ``bioengineered.'' AMS also
                sought comment on whether the symbol should include the word
                ``bioengineered.''
                 Comment: Some comments suggested that none of the three symbols
                were acceptable. Many of these commenters suggested that the
                alternatives AMS provided promoted bioengineering or provided the BE
                food disclosure in a misleading or confusing manner. Some comments
                provided alternative symbols and others suggested general ideas that
                AMS should incorporate, such as more neutral colors or images.
                 AMS Response: AMS appreciates the comments and alternative symbol
                designs. AMS has chosen a modified version of Alternative 2-A. The
                modified version removed the letters ``BE'' and instead uses the word
                ``Bioengineered,'' which AMS believes will better inform consumers than
                just the letters ``BE.'' AMS believes the modified symbol is an
                appropriate, non-disparaging way to communicate the information
                required by the amended Act.
                 Comment: Some commenters believed adding the word ``bioengineered''
                to the symbol was unnecessary and that other symbols used on food (e.g.
                the organic seal, irradiation symbol, and recycling symbol) do not use
                additional text to convey meaning. Other commenters, including some who
                conducted research on consumer response to the proposed symbols and
                text options, said the proposed symbols and text options did not
                provide clear information to consumers. Conversely, other commenters
                who also conducted research on consumer response to the proposed
                symbols and text options, believed adding the word ``bioengineered''
                would provide consumers with more information than a symbol with the
                acronym ``BE.''
                 AMS Response: AMS has chosen to add the word ``bioengineered'' to
                the symbol and believes that the combination of the symbol with the
                additional text will provide consumers with more information about
                their food. AMS understands that because the symbol has not yet been
                used in commerce, consumers and those who may have responded to surveys
                conducted during the comment period that examined the proposed
                disclosure options may not fully understand the meaning of the symbol
                and accompanying text. As the NBFDS is implemented, AMS is committed to
                helping consumers understand the meaning of the new symbol and
                accompanying text.
                 Comment: Of those in favor of the proposed symbols, most favored
                Alternative 2-A. Commenters indicated that Alternative 2-A was the
                ``best choice of the three provided.'' They found it to be the ``most
                simple,'' ``most professional,'' and ``most neutral'' of the three
                proposed.
                 AMS Response: AMS agrees that Alternative 2-A is the most
                appropriate choice of the three proposed alternatives and has modified
                Alternative 2-A in the NPRM to address some of the concerns raised by
                other commenters, as described above.
                 Comment: Most commenters did not support the use of Alternatives 2-
                B or 2-C. Commenters believed the symbols and colors were misleading,
                not neutral, and that they resembled a smiley face. Conversely, several
                commenters liked the symbol because they believed they were the
                ``friendliest'' or ``happy'' option.
                 AMS Response: AMS appreciates commenters' concerns regarding the
                use of Alternatives 2-B or 2-C. Based on comments received for all
                three alternatives and commenter sponsored studies on consumer
                perceptions of labeling (see footnotes 7 and 8), AMS has chosen a
                modified version of Alternative 2-A, as discussed above.
                12. Electronic or Digital Link Disclosure
                 AMS solicited comments on the option of an electronic or digital
                link disclosure including the use of current technology such as QR
                codes and digital watermark technology. In addition to the use of
                electronic or digital link technology, AMS solicited comments on
                language that must accompany the electronic or digital link such as,
                ``Scan here for more food information'' or equivalent language that
                reflects technological changes. The proposal would also incorporate a
                requirement to include a telephone number that provides access to the
                BE food disclosure and would further require that disclosure be
                available, regardless of the time of day, and that the telephone number
                be located in close proximity to the electronic or digital link and
                state ``Call for more food information.''
                 Comment: The majority of commenters did not support the use of
                electronic or digital link disclosure in lieu of on-package labeling.
                Many commenters cited the USDA study conducted by Deloitte Consulting
                LLP, Study of Electronic or Digital Link Disclosure: A Third-Party
                Evaluation of Challenges Impacting Access to Bioengineered Food
                Disclosure (July 2017), and listed concerns with electronic or digital
                link disclosures. Such commenters stated that reliance on electronic or
                digital link disclosure would discriminate against those without access
                to smartphones or other technology, such as reliable high-speed
                internet access, and would disproportionately have a negative impact on
                rural, low-income, minority, and elderly consumers. Commenters stated
                that many consumers are not aware of QR codes or how they work. Many of
                these commenters also stated that electronic or digital link disclosure
                should not replace on-package disclosure because even when consumers
                are aware of QR codes and attempt to access the information through
                their smartphones, the QR codes do not always work and are not easy for
                all consumers to use. Some of these commenters also stated that
                consumers associated digital link disclosures like QR codes with
                marketing, and would not be inclined to take steps to access the
                disclosure information. Most of these commenters stated that electronic
                or digital link disclosure would serve as a barrier between consumers
                and BE disclosure. Such barriers identified by commenters included
                additional costs for consumers, such as through increased data plans,
                and time spent scanning and obtaining information. Some commenters
                noted that consumers with families or limited windows of time for
                shopping would find accessing electronic or digital link disclosures
                difficult and frustrating.
                 AMS Response: AMS acknowledges that most commenters do not support
                the use of electronic or digital link disclosure. However, AMS notes
                that electronic or digital link disclosure is mandated by the amended
                Act. AMS
                [[Page 65854]]
                also notes that if a regulated entity decides to utilize electronic or
                digital link technology to convey bioengineered food information, that
                entity must also provide options for the consumer to access the
                disclosure by calling a phone number. AMS believes that requiring the
                option to call a telephone number will provide BE food information in
                an accessible and understandable manner. AMS also notes that such
                telephone number disclosure must be available regardless of the time of
                day.
                 Comment: Several commenters suggested that the use of electronic or
                digital disclosures would be acceptable only in conjunction with on-
                package text or symbol disclosures. Such commenters stated that on-
                package labeling provided shoppers a way to quickly and easily compare
                one product to another for BE ingredients and, at the same time,
                compare prices and nutritional content. These commenters identified
                many of the same issues as commenters opposed to electronic or digital
                disclosures. Some of these commenters noted that a store could install
                its own scanners to allow consumers to access electronic or digital
                link disclosures, but a subset of such commenters stated that such
                scanners would need to be installed within easy access to all shelves
                throughout the store, and not just near check-out counters, in order to
                be comparable to on-package labeling.
                 AMS Response: AMS notes that the amended Act mandates the
                electronic or digital link disclosure without requiring any separate
                on-package disclosure. AMS acknowledges that in-store scanners could
                allow consumers to access electronic or digital link disclosures.
                However, AMS does not believe such a requirement is necessary because
                any electronic or digital link disclosure must also provide options for
                the consumer to access the disclosure by calling a phone number.
                 Comment: Many commenters stated that if digital disclosure is
                allowed, the rule should account for new developments in technology
                that would be subject to guidelines to improve readability and ease of
                access to information. Some commenters stated that AMS should adopt
                rules to make sure that such disclosures made using electronic or
                digital technology consistently scan every time, work in all
                conditions, are optimized for readability and accessibility, and are
                easily accessible for consumers who do not have smartphones. In
                addition, commenters stated the need for AMS to ensure that QR code
                design, packaging material and shape is included in its performance
                standards. Commenters also stated that AMS should not allow multiple QR
                codes on the same package to diminish the risk that consumers will not
                know where to obtain the BE disclosure. Some commenters stated that AMS
                should use language that alerts the consumers that scanning the QR code
                or calling the provided number would provide BE information. Other
                commenters stated that if digital disclosure is allowed, the rule
                should account for new developments in technology that would be subject
                to guidelines to improve readability and ease of access to information.
                They also stated that AMS should use URLs or shortened URLs rather than
                QR codes as a disclosure method.
                 AMS Response: AMS recognizes that electronic and digital links
                currently used on food products in the marketplace take different
                forms, and are accessible on different devices, which would make
                certain specific requirements impractical. The amended Act allows for
                equivalent statements that reflect technological changes. Consequently,
                AMS has allowed for other alternative statements to direct consumers to
                the link to the BE food disclosure. Examples of other statements
                include: ``Scan anywhere on package for more food information,'' or
                ``Scan icon for more food information.'' AMS acknowledges that some
                consumers may experience difficulty accessing electronic or digital
                link disclosures. However, AMS does not believe additional rules
                mandating standards for QR codes are necessary because any electronic
                or digital link disclosure must also provide options for the consumer
                to access the disclosure by calling a phone number. Therefore,
                consumers experiencing difficulty with any electronic or digital link
                disclosure methods will have an alternative disclosure method
                available. AMS notes that the language to accompany any electronic or
                digital link disclosure is provided in the amended Act, which only
                allows for changes to the terminology based on technology, not a
                specific reference to bioengineering. AMS notes that while the amended
                Act does not allow for the use of URLs or shortened URLs for all
                manufacturers, website disclosure is allowed for small food
                manufacturers.
                 Comment: Many commenters urged that any electronic or digital link
                disclosure must remain free from any promotional or marketing
                information on the first product information page, or ``landing page,''
                to which consumers are directed. These commenters urged that such
                disclosure must contain only BE information, as many of these
                commenters were concerned that QR codes would direct consumers to
                marketing information before bioengineering disclosure information.
                Some commenters disagreed with AMS's proposal requiring that the
                electronic or digital link disclosure provide the bioengineering
                disclosure on the first product information page.
                 AMS Response: Based on the amended Act, AMS believes that the
                electronic or digital link disclosure requires that the bioengineering
                disclosure be on the first product information page. See 7 U.S.C.
                1639b(d)(2). AMS does not believe that consumers should have to
                navigate to other pages to locate the bioengineering disclosure.
                 AMS agrees that any electronic or digital link disclosure should
                remain distinct from any promotional or marketing information. While
                AMS acknowledges that some commenters have urged maximum flexibility in
                allowing disclosures alongside other information, AMS notes that the
                amended Act requires the electronic or digital link to provide the
                bioengineering disclosure on the first product information page
                accessed through the link, without any marketing and promotional
                information. Therefore, if a regulated entity wants to provide
                additional information about BE food to consumers, the information
                should be provided outside of the landing page that includes the BE
                food disclosure.
                 Comment: Some commenters were concerned about the potential
                liability digital disclosure options could present if they were
                accessed by unauthorized individuals, such as hackers.
                 AMS Response: AMS agrees that unauthorized access to personal
                information is a grave concern to many consumers. AMS notes that the
                amended Act specifically states that any electronic or digital link
                disclosure may not collect, analyze, or sell any personally
                identifiable information about consumers or the devices of consumers
                and, to the extent that any such information must be collected for the
                purposes of disclosure, that information must be deleted immediately
                and not used for any other purpose.
                 Comment: Many commenters supporting the use of electronic or
                digital link disclosure also cited the Deloitte study, noting that a
                vast and growing majority of Americans own smart phones capable of
                accessing digital disclosures and that wireless internet access is
                nearly universal in retail establishments. However, several commenters
                who support the use of electronic or digital link disclosure objected
                to the proposed requirement
                [[Page 65855]]
                for an additional phone number and call to action statement (``Call for
                more food information'') in conjunction with the digital disclosure
                link and digital call to action statement (``Scan here for more food
                information''). Some commenters stated that such a requirement will be
                costly to implement and is unnecessary when the regulated entity
                chooses the digital disclosure option. From their perspective, because
                existing toll-free numbers already appear on many labels, the package
                will also bear a link to the digital disclosure, and consumers will
                have sufficient and growing access to digital disclosure methods. Some
                of these commenters suggested that when regulated entities choose the
                digital disclosure option, consumers could access bioengineered food
                disclosure information through existing phone numbers, with the same
                placement and call to action to which consumers are accustomed.
                Commenters stated that by not allowing such flexibility, consumers
                could face two competing phone numbers on a single package, which would
                cause confusion. In addition, commenters stated the proposed
                requirement that phone lines be staffed at all hours would be extremely
                costly to implement. These commenters request that AMS consider less
                costly alternatives, such as allowing existing consumer support phone
                lines to also provide disclosure and specify in the final regulation
                that phone lines must be available only during normal business hours.
                 AMS Response: AMS acknowledges that a large number of Americans
                have smartphones and most national and regional supermarkets provide
                wireless internet connections. However, as discussed in relation to the
                study identifying potential technology challenges impacting consumers,
                the Secretary has determined that many consumers do not have sufficient
                access to electronic or digital link disclosures under ordinary
                shopping conditions at this time. AMS notes that the amended Act
                requires that any electronic or digital link disclosure also includes a
                telephone number that provides access to the bioengineering disclosure.
                While AMS acknowledges that a product may bear more than one phone
                number, AMS believes that any consumer confusion would be minimized
                because the bioengineering disclosure phone number must be in close
                proximity to the digital link. AMS believes that access to the
                disclosure regardless of the time of day is important to provide
                meaningful disclosure to consumers. AMS further believes that allowing
                pre-recorded information for such a disclosure lessens any burden on
                regulated entities.
                13. Study on Electronic Disclosure
                 The amended Act requires the Secretary to conduct a study to
                identify potential technological challenges that may impact whether
                consumers would have access to the bioengineering disclosure through
                electronic or digital disclosure methods and to solicit comment on the
                study. AMS contracted with Deloitte Consulting LLP (Deloitte) to
                conduct the study and posted the resulting report, Study of Electronic
                or Digital Link Disclosure: A Third-Party Evaluation of Challenges
                Impacting Access to Bioengineered Food Disclosure, on its website in
                September 2017. As part of the NPRM, AMS sought comments on the study,
                as well as the proposed text message disclosure option, should the
                Secretary determine, after reviewing the study and comments, that
                consumers would not have sufficient access to the bioengineering
                disclosure through electronic or digital disclosure methods.
                 Comment: Many commenters cited the study in opposition to
                electronic or digital link disclosure, with several citing the study's
                finding that consumers may not have smartphones or access to internet
                speeds capable of downloading BE disclosure content. These commenters
                stated that this lack of access would disproportionately impact groups
                such as rural consumers and retailers. Commenters also cited the
                study's finding that consumers either do not know what digital links
                are or, if they do recognize them, they typically associate digital
                links with marketing information and they may not know, or be inclined
                to use, such methods to obtain a BE disclosure. Commenters further
                cited the study to note that even when consumers are aware of digital
                links and attempt to use them, they often run into problems scanning
                and using such links.
                 AMS Response: AMS acknowledges that some consumers may lack access
                to technology required to utilize electronic or digital link
                disclosure. In fact, after reviewing the study and comments submitted
                to the NPRM related to the study, the Secretary has determined that
                consumers would not have sufficient access to the bioengineering
                disclosure through only electronic or digital means under ordinary
                shopping conditions at this time. Thus, AMS, in compliance with the
                amended Act, is adopting a text message disclosure option. See 7 U.S.C.
                1639b(c)(4). The amended Act does not, however, vest AMS with authority
                to eliminate the electronic or digital disclosure option. See id. The
                amended Act is clear that it is the food manufacturer that selects the
                disclosure option that it wants to use to make the required disclosure.
                See 7 U.S.C. 1639b(b)(2)(D).
                 Comment: Some commenters noted additional disclosure technology
                cited in the study, such as in-store digital link scanners, and stated
                that digital disclosure would need to be paired with other such
                disclosure options to ensure access to all consumers.
                 AMS Response: AMS agrees that additional technology in the grocery
                stores may make electronic or digital disclosure more accessible.
                Grocery stores are welcome to have those technologies in place for
                consumers. However, the amended Act does not provide AMS with the
                authority to require grocery stores to make those technologies
                available to consumers.
                 Comment: Some commenters cited the study in support of digital
                disclosure. These commenters noted the study's findings that wireless
                internet and cellular networks are already widely available, and access
                to these technologies is increasing.
                 AMS Response: AMS acknowledges that a large number of Americans
                have smartphones and many national and regional supermarkets provide
                wireless internet connections. However, as noted above, the Secretary
                has determined that many consumers do not have sufficient access to
                electronic or digital link disclosures under ordinary shopping
                conditions at this time.
                 Comment: Numerous commenters, including those representing food
                manufacturers and retailers, supported the use of text message
                disclosure. Many of these commenters urged maximum flexibility in
                disclosure, including text messages. Some commenters supporting text
                message disclosure noted that it would provide for disclosure without
                access to a smartphone or the internet. These commenters stated that
                text message disclosure could serve a broader range of consumers than
                digital disclosure options, noting the availability of cellular phone
                coverage throughout the country.
                 AMS Response: AMS notes that the Deloitte study reported that
                approximately 5% of Americans do not own mobile phones based on the Pew
                Research Center's Mobile Fact Sheet. Because text messaging is not
                dependent on broadband or wireless internet access, it stands to reason
                that 95% of Americans can receive text messages. Thus, we agree that
                text message disclosure can serve a broad range of consumers.
                Additionally, the amended Act requires the Secretary to consult with
                food retailers and
                [[Page 65856]]
                manufacturers in providing the additional and comparable option. See 7
                U.S.C. 1639b(c)(4). AMS, therefore, gave significant weight to comments
                from this group that overwhelmingly supported the text message
                disclosure option.
                 Comment: Many commenters opposed the use of text message
                disclosure. Several argued that the additional need for a phone, even
                if it is not a smartphone, is a burden on consumers. Many of these
                commenters cited the study and noted that many consumers, especially
                rural consumers, do not have access to reliable cellular phone service,
                making text message disclosure difficult to use. Some of these
                commenters also noted that text messaging could result in additional
                charges to consumers who pay for individual text messages or have to
                pay for an upgraded phone plan. Other commenters stated that the need
                to text for a disclosure would be time consuming and ineffective,
                placing unnecessary barriers between consumers and BE disclosures.
                These commenters stated that text messaging was not comparable to on-
                package labeling and should not be adopted.
                 AMS Response: AMS acknowledges that text messaging might require an
                additional cost for some consumers depending on the consumer's cellular
                phone data plan. However, AMS notes that consumers must not be charged
                a fee by the regulated entity to access the disclosure information by
                text message. We also note that a text message disclosure request sent
                by a consumer must trigger an immediate response to the consumer's
                mobile device. Finally, we note that the amended Act requires a
                comparable option to access the BE disclosure, not that the option be
                comparable to on-package labeling. Therefore, we conclude that the text
                message disclosure meets the requirements of the amended Act.
                 Comment: Some commenters urged that if text message disclosure is
                allowed, the text message disclosure should not include any marketing
                information. Other commenters noted that the proposed rule would
                prohibit charging fees, data collection, and privacy invasions that
                could be associated with text message disclosure, but they stated that
                consumers may not know of these prohibitions.
                 AMS Response: AMS agrees that any text message disclosure must not
                contain marketing and promotional information and is adopting proposed
                Sec. 66.108(c) in the final rule to prohibit that information in the
                text message option. AMS is also adopting Sec. 66.108(d) to protect
                the privacy of consumers who access BE information through text
                message. AMS will inform consumers of the privacy protections for text
                message disclosures on its website and encourages food manufacturers
                and retailers and consumer advocacy groups to do the same.
                14. Disclosures for Certain Circumstances
                a. Small Food Manufacturers
                 AMS solicited comments on two disclosure options for small food
                manufacturers: (1) A telephone number accompanied by appropriate
                language to indicate that the phone number provides access to
                additional information; and (2) an internet website address. In
                addition, in the case of small food manufacturers, the amended Act
                provides that the implementation date not be earlier than one year
                after the implementation date for regulations promulgated in accordance
                with the NBFDS. AMS proposed to define ``small food manufacturer'' as
                ``any food manufacturer with less than $10 million in annual receipts
                but $2,500,000 or more in annual receipts.'' This definition would be
                similar to FDA's proposed rule to extend the compliance dates for
                manufacturers with less than $10 million in annual food sales.
                 Comment: Several commenters recognized a need to give small food
                manufacturers the flexibility to disclose in a way that is cost
                effective for a small business, while providing the same level of
                protection for consumers' personally identifiable information. Several
                commenters recommended that the annual receipts threshold defining a
                small food manufacturer be changed to $2,500,000 or less, while other
                commenters suggested the definition should be based on number of
                employees, such as 500 or 100, because the measure of annual receipts
                can become outdated over time. Some commenters requested that the
                implementation date for small food manufacturers be delayed one
                additional year. Some commenters said no manufacturers should be exempt
                from disclosure based on size, with many of those commenters stating
                that the same reasons for disclosing apply regardless of the size of
                the manufacturer.
                 AMS Response: AMS believes that annual receipts are a reasonable
                measure in determining the threshold for small and very small food
                manufacturers, and that the definition of ``small food manufacturer''
                provides flexibility for small entities while providing information to
                consumers regarding the bioengineered status of their foods. AMS notes
                that it considered other revenue cutoffs and other definitions. For
                instance, AMS considered the number of employees as a criterion, but
                found that it could be misleading and difficult to administer given the
                seasonal and part-time nature of some food manufacturing. AMS also
                believes that using total receipts is administratively simpler. In
                addition, AMS believes that the small food manufacturer definition
                should be consistent with the FDA's definition under its nutrition
                labeling standards, which also uses annual receipts. AMS believes that
                delaying implementation for small food manufacturers for the
                statutorily-required 1-year period, but not longer, provides such
                manufacturers with enough time to ensure compliance. AMS understands
                the concern of commenters that any exemption will lead to some level of
                non-disclosure, but notes that the implementation delay for small food
                manufacturers and the very small food manufacturer exemption are
                statutorily required. AMS also notes that any electronic or digital
                link disclosure utilized by small food manufacturers must take the same
                steps as larger manufacturers to protect personally identifiable
                information about consumers.
                 Comment: Several commenters recommended that the text accompanying
                telephone numbers and websites be clarified to include a reference to
                bioengineered disclosure so consumers know what type of information the
                text refers to. Some commenters recommended that companies should be
                able to use the same phone numbers and websites already on packaging to
                inform consumers because having a separate phone number or website link
                for bioengineered disclosure would be redundant.
                 AMS Response: AMS appreciates that some commenters requested a
                specific reference to bioengineering on small food manufacturer
                disclosures. However, AMS notes that the disclosure wording for small
                food manufacturers matches the statutorily-required on-package language
                required for electronic or digital link disclosures and any telephone
                number disclosures. AMS also acknowledges concerns commenters expressed
                regarding redundant phone numbers or website links. However, AMS
                believes that the rule provides small food manufacturers flexibility in
                disclosing bioengineered food information to consumers while ensuring
                that the manufacturer's chosen disclosure method is consistent with the
                disclosure required for larger manufacturers.
                [[Page 65857]]
                b. Small and Very Small Packages
                 AMS solicited comments on three disclosure options for small and
                very small packages: (1) A modified version of the electronic or
                digital link disclosure (``scan for info''); (2) a modified version of
                the text (``text for info''); and (3) a modified version of the phone
                number (``call for info''). The definition of ``small packages'' and
                ``very small packages'' was taken from FDA labeling requirements.
                 Comment: Many commenters supported using the FDA labeling
                requirement definitions of ``small packages'' and ``very small
                packages,'' with many of these commenters recognizing the need for
                flexibility for disclosure as small and very small packages have
                limited surface area for labels. Several commenters recommended that
                the disclosures be simplified to include a clear reference to
                bioengineering. Some commenters recommended that even small packages
                should fully disclose BE with a symbol or distinct on-package marking,
                with many such commenters stating that consumers might not have access
                to technology to access links or QR codes.
                 AMS Response: AMS appreciates that some commenters requested a
                specific reference to bioengineering on small and very small packages.
                However, AMS notes that the disclosure wording for small and very small
                packages matches the statutorily-required on-package language required
                for other electronic or digital link disclosures and any telephone
                number disclosures, but in a shortened form. AMS acknowledges concerns
                some commenters expressed regarding on-package labeling, even for small
                packages, and concerns with access to electronic or digital disclosure.
                However, AMS believes that the disclosure options available to
                manufacturers utilizing small and very small packages, including
                electronic or digital disclosure, provides needed flexibility to such
                manufacturers while providing disclosure to consumers.
                c. Food Sold in Bulk Containers
                 AMS solicited comments on the AMS proposal that retailers would be
                responsible for complying with the BE food disclosure of bulk food, and
                that BE food disclosure on bulk foods be allowed to appear using any of
                the options for on-package disclosure, including text, symbol,
                electronic or digital link, or text message, if applicable.
                 Comment: Several commenters supported the proposed disclosure
                requirements for food sold in bulk containers, stating that such
                disclosure is necessary to allow consumers to easily identify and
                understand the bioengineered status of the food. Such commenters stated
                that the proposal provided retailers flexibility in the form of
                disclosure. Some commenters expressed that bulk food should not be
                subject to disclosure. While some other commenters stated the proposed
                requirements were reasonable if disclosure was required. In some
                instances, commenters emphasized that retailers should be given maximum
                disclosure flexibility. Some commenters requested that small and very
                small retailers and other businesses should be exempt from the bulk
                container disclosure because the availability and selection of bulk
                food, and therefore the presence of BE in such food, can change daily,
                making disclosure burdensome. Other commenters noted that the bulk food
                disclosure requirements may result in non-BE food being sold or
                commingled with, and disclosed as, BE food.
                 AMS Response: AMS agrees that labeling bulk containers is necessary
                to provide consumers with disclosure information. The final rule is
                meant to provide retailers with flexibility in choosing a disclosure
                method. With respect to comments seeking an exemption for small food
                retailers, such as the exemption for very small food manufacturers, AMS
                states that the very small food manufacturer exemption is statutorily
                mandated and cannot be extended to small retailers. To the extent that
                a small retailer is also a very small food manufacturer, it may be able
                to take advantage of the exemption in that instance. Although retailers
                will be required to correctly disclose BE food, AMS believes that
                retailers are already accustomed to ensuring that bulk food appears
                with appropriate signage because AMS already requires Country of Origin
                Labeling on bulk food. Additionally, commingled bulk foods should be
                disclosed in the same manner as commingled food or ingredients in
                packaged or processed food.
                15. Voluntary Disclosure
                 AMS solicited comments on voluntary BE disclosure. Recognizing that
                some entities may want to provide a BE disclosure to consumers even
                though they are not required to do so, AMS proposed allowing voluntary
                disclosure for food that meets the definition of ``bioengineering'' in
                the amended Act to ensure that entities responsible for disclosure
                would have the option to disclose bioengineering information regarding
                foods not subject to mandatory disclosure. AMS proposed that voluntary
                disclosure methods and requirements (for text, symbol, digital or
                electronic link, or text message disclosure) would be the same as for
                mandatory disclosure.
                 Comment: Most commenters agreed that the law allowed voluntary
                disclosure. However, some commenters expressed concern that voluntary
                disclosures could potentially be false or misleading, while others
                stated that voluntary disclosures could lead to a fractured system
                where individual companies make different choices regarding the exact
                same ingredients and consumers would not know what such disclosure
                really means.
                 AMS Response: AMS agrees that voluntary disclosure is permissible
                under the amended Act. AMS acknowledges that regulated entities may
                make different decisions regarding voluntary disclosure. However, AMS
                has attempted to provide flexibility to the food industry, along with
                the transparency to consumers that they expect and deserve. Voluntary
                disclosure is available to exempt entities, as described in Sec.
                66.116(a), and to foods in which rDNA material is not detectable but
                are derived from bioengineered crops or foods, as described in Sec.
                66.116(b). AMS believes that the final voluntary disclosure provisions
                give food manufacturers, retailers, and other entities the ability to
                provide consumers with the information to make informed choices.
                 Comment: Some commenters agreed with AMS's proposal to permit
                voluntary disclosure for food that meets the regulatory definition of
                ``bioengineered food'' but is not subject to mandatory disclosure, so
                long as such disclosure is consistent with the Act. Some of these
                commenters agreed that voluntary text disclosure methods should be
                identical to mandatory disclosure rules to minimize consumer confusion
                and unfair competition, while others recommended that AMS offer
                companies additional flexibility in deciding what language to use for
                voluntary disclosures. These commenters also stated that voluntary
                disclosure should not be permitted for a non-bioengineered food that
                was ``derived from'' or ``sourced from'' a bioengineered crop, and they
                opposed allowing voluntary disclosure for highly refined ingredients
                because consumers would find it challenging to make accurate
                comparisons between similar products where only one bears a voluntary
                disclosure. A subset of these commenters also requested that AMS
                prohibit voluntary disclosure terminology that suggests that food
                derived from animals fed bioengineered feed is therefore considered
                [[Page 65858]]
                bioengineered. Other commenters stated that AMS should permit voluntary
                disclosure on food from animals consuming feed derived from BE crops.
                Several commenters stated that voluntary claims such as ``non-
                bioengineered'' should be prohibited for foods where there is no
                bioengineered alternative.
                 AMS Response: AMS agrees that any methods to voluntarily disclose
                bioengineered food should match the disclosure methods available to
                regulated entities to ensure consistent disclosure. AMS also notes that
                food companies and consumers generally agreed that consumers expect as
                much information as possible on the origin of food ingredients. For
                this reason, the final voluntary disclosure provisions allow for a food
                manufacturer, retailer, importer, or other entity to voluntarily
                disclose a food that originates from a bioengineered crop that they
                would otherwise not be required to disclose, using the distinct
                terminology ``derived from bioengineering.'' This terminology includes
                refined ingredients. As noted above, AMS acknowledges that regulated
                entities may make different decisions regarding voluntary disclosure.
                However, AMS believes that allowing voluntary disclosure of these
                ingredients allows food manufacturers, retailers, importers and other
                entities to provide the information that consumers expect in a
                consistent manner. AMS agrees with commenters that stated that
                voluntary BE disclosure is not permitted for foods derived from animals
                fed bioengineered feed. Section 66.116 makes clear that voluntary BE
                disclosure is available in limited circumstances and does not apply to
                any foods that the amended Act excludes from the requirements for
                disclosure. AMS notes that the final rule does not prohibit regulated
                entities from making other claims regarding bioengineered foods.
                Entities seeking to use absence claims should ensure that such claims
                are in compliance with all applicable Federal laws and are otherwise
                truthful and not misleading.
                 Comment: Many commenters supported voluntary disclosure for
                products that do not meet the definition of ``bioengineered food,''
                with some commenters noting that many manufacturers have already
                invested resources into systems of voluntary disclosure. Some of these
                commenters favored the ability to use terminology that is distinctly
                different from the mandatory disclosure language, provided the claims
                are truthful, not misleading, and otherwise consistent with applicable
                Federal law. Some of these commenters favored voluntary disclosure of
                foods that contain an ingredient ``derived from'' or ``sourced from'' a
                bioengineered crop, such as ingredients on the Bioengineered Source
                List. Some of these commenters favored voluntary disclosure of highly
                refined ingredients that are not required to be disclosed but were
                derived from a BE crop, especially if AMS excludes refined ingredients
                from the definition of ``bioengineered food.'' Some commenters
                recommended voluntary disclosures be standardized in a way that is
                rigorous but flexible, with some urging inclusion of a non-exclusive
                list of examples of permitted claims into the rule. A subset of these
                commenters stated that voluntary disclosure should be permitted below
                the threshold or amount of a bioengineered ingredient that triggers
                mandatory disclosure.
                 Some commenters favored voluntary disclosure of the amount of
                ingredients that meet the BE food definition, regardless of whether the
                finished food meets the definition. Some of these commenters favored
                voluntary disclosure of a food made using genetic engineering,
                ingredients sourced from gene editing, or use of other technology that
                may fall outside the definition of bioengineering. Some also stated
                that AMS should allow voluntary disclosure with crops that do not meet
                the 85-percent acreage threshold because BE technology has not been
                widely adopted.
                 Some of these commenters requested that AMS allow entities to
                identify individual ingredients that meet the definition of BE food
                within the ingredient statement by using an asterisk or other symbol
                next to the ingredient in the ingredient list, regardless of whether
                the finished food meets the definition of BE food. Another subset of
                commenters favored voluntary disclosure permitting the use of an
                asterisk or other symbol to identify ingredients in the ingredient
                statement that fall outside the definition of ``bioengineered food,''
                such as those derived from gene editing.
                 AMS Response: AMS agrees that voluntary disclosure should be
                allowed for foods that do not meet the ``bioengineered food''
                definition because the rDNA is not detectable, and that such disclosure
                should utilize distinct terminology. As noted above, the final
                voluntary disclosure provisions allow a food manufacturer, retailer,
                importer, or other entity to voluntarily disclose a food that is
                derived from a bioengineered crop that they would otherwise not be
                required to disclose, using the statement ``derived from
                bioengineering.'' AMS has considered comments requesting additional
                disclosure options and understands that some entities may want to
                disclose bioengineered crops or ingredients with more specificity.
                Therefore, when an entity chooses to voluntarily disclose foods derived
                from bioengineering with the statement ``ingredient(s) derived from a
                bioengineered source,'' the word ``ingredient(s)'' may be replaced with
                the name of the specific crops or ingredients that are being disclosed.
                AMS acknowledges that many entities have invested resources into
                alternative voluntary disclosure methods or labels, but AMS believes
                that voluntary disclosure should be consistent to avoid consumer
                confusion. Therefore, an entity utilizing the voluntary disclosure
                provisions must comply with the disclosure requirements for text,
                symbol, digital or electronic link, or text message disclosure, as
                applicable. Nonetheless, as noted above, the final rule does not
                prohibit regulated entities from making other claims regarding
                bioengineered foods, provided that such claims are consistent with
                applicable Federal law.
                 Comment: Some commenters favoring voluntary disclosure urged AMS
                not to limit voluntary claims. They stated that AMS should recognize
                that entities may want to provide additional information beyond what is
                required under the disclosure standard, including statements about the
                safety of bioengineering.
                 Many commenters stated that AMS's use of the single term
                ``bioengineered'' for mandatory disclosure should not preclude the use
                of different terms, including ``genetically engineered'' and ``GMO,''
                in additional voluntary statements and symbols about foods. However,
                these commenters disagreed about whether AMS should consider these
                terms synonymous and interchangeable with ``bioengineered.'' In
                addition, one commenter suggested that AMS add a provision about
                absence claims that would clarify that claims such as ``not
                bioengineered'' or ``non-GMO'' are permitted on certified organic
                products by nature of their certification and that a food may not be
                considered ``not bioengineered'' solely because the food is exempt from
                mandatory disclosure.
                 AMS Response: As noted above, AMS acknowledge that entities may
                want to make additional claims regarding bioengineered foods. However,
                AMS believes that voluntary disclosure should generally be consistent
                to avoid consumer confusion. Therefore, an entity utilizing the
                voluntary disclosure provisions must comply with the disclosure
                requirements for text, symbol, digital or electronic link, or text
                [[Page 65859]]
                message disclosure, as applicable. Nonetheless, the final rule does not
                prohibit regulated entities from making other claims regarding
                bioengineered foods, provided that such claims are consistent with
                applicable Federal law. With respect to absence claims, NBFDS covers
                mandatory and voluntary bioengineered and BE-derived claims and 7
                U.S.C. 1639b does not provide authority for AMS to establish an absence
                claims regime as part of the NBFDS. AMS notes that FDA (and FSIS
                depending on the food at issue) retain authority over absence claims.
                Entities seeking to use absence claims should ensure that such claims
                are in compliance with all applicable Federal laws and regulations and
                are otherwise truthful and not misleading. With respect to organic
                certification, AMS believes that the amended Act in this respect is
                self-executing.
                16. Recordkeeping
                 AMS proposed recordkeeping requirements that aligned with the
                disclosure requirements. Commenters generally supported the proposal,
                and several commenters submitted suggestions for clarification.
                 Comment: Many commenters appreciated the flexibility provided to
                regulated entities by enabling the use of multiple documentation
                sources. Commenters agreed with the 12 categories of documentation
                identified as appropriate to verify that foods are not BE, though some
                asked that examples of appropriate records be incorporated into the
                final rule. Commenters noted that records should be in any format (hard
                copy or electronic), with records stored at any business location.
                 AMS Response: AMS agrees with these comments. Section 66.302(a)
                includes a non-exhaustive list of examples of customary or reasonable
                records that demonstrate compliance with the NBFDS's disclosure
                requirements. That section also clearly states that the records may be
                maintained in electronic or paper format.
                 Comment: Many commenters noted that the reasonable or customary
                records already in use throughout the industry should suffice to comply
                with the Act and agreed that the recordkeeping requirements would not
                impose additional costs or burden to existing practices. One commenter,
                however, noted that implementation could result in significant changes
                to existing supply chain documentation practices, increasing complexity
                and cost throughout the value chain.
                 AMS Response: As the commenters stated, we do believe that many, if
                not most, regulated entities currently maintain the types of records
                that will satisfy the NBFDS's recordkeeping requirements. Regulated
                entities may make changes to their documentation practices for business
                reasons, but this final rule does not specifically require them to do
                so.
                 Comment: A commenter suggested that USDA should require companies
                to maintain records similar to those required by private certification
                entities such as the Non-GMO project (i.e. for a particular crop or
                ingredient, companies must have the DNA testing records, certifications
                by crop suppliers of GE/non-GE content, supply chain documents,
                purchase orders, bills of sale).
                 AMS Response: AMS believes that it is efficient to allow companies
                to determine the records that best fit their business needs while
                demonstrating compliance with the NBFDS. If a regulated entity
                maintains one type of records that does so, it serves no purpose to
                require that entity to maintain additional or redundant records.
                 Comment: A commenter encouraged AMS to coordinate with other
                Federal agencies to better understand what recordkeeping and records
                access is already required and enforced.
                 AMS Response: AMS agrees that recordkeeping and compliance
                requirements under the NBFDS should be consistent with those under
                other AMS programs, such as NOP and PACA, and has incorporated elements
                from each of those programs into the NBFDS. Accordingly, Sec. 66.302
                does not specify the records regulated entities must maintain to
                demonstrate compliance with the disclosure regulations. Instead, as
                with other AMS programs, regulated entities are free to determine for
                themselves which of their customary business records will demonstrate
                compliance and should be maintained.
                 Comment: A commenter suggested that bioengineering-specific records
                should be necessary only to support decisions that disclosure is not
                required. Manufacturers typically do not test for or maintain
                documentation on the presence of modified genetic material in food
                unless they are making a ``non-GMO'' claim. A commenter recommended a
                regulated entity should only be required to maintain records about
                foods on the List of Bioengineered Foods for which the regulated entity
                does not make a bioengineered disclosure, including records
                demonstrating that the food is below the 5 percent threshold. The
                commenter also suggested that acceptable records include documentation
                showing the identity preserved seed was produced and handled throughout
                the supply chain in a manner to mitigate the potential for cross-
                contact with BE substances in the supply chain.
                 AMS Response: To ensure that BE disclosures are consistent with the
                requirements of the NBFDS, AMS is requiring that customary or
                reasonable records be maintained when bioengineered food or food
                ingredients are used.
                 Comment: Several commenters suggested that requiring testing
                documentation would be burdensome. Commenters suggested adopting a
                recordkeeping approach based on traceability and segregation rather
                than analytical testing. A commenter sought clarification regarding
                whether regulated entities may entirely rely on traceability records
                rather than testing results to establish compliance with the Act.
                 AMS Response: AMS believes that regulated entities should have the
                flexibility to determine what customary or reasonable records they
                should maintain to demonstrate compliance with the NBFDS, because each
                business is different. Section 66.302(a)(4) provides a non-exhaustive
                list of record types that might be used to verify that foods are or are
                not bioengineered. Further, Sec. 66.9 provides that, in order to
                verify that refined foods do not contain modified genetic material,
                regulated entities can choose to rely on traceability or source
                records, validated process verifications, or analytical testing
                results.
                 Comment: A commenter suggested that if AMS exempts ingredients from
                disclosure that do not contain modified genetic material, AMS should
                maintain a list of these kind of ingredients. This list would eliminate
                the need for testing and maintaining documentation.
                 AMS Response: The final rule does not exempt any specific
                ingredient. Rather, if the regulated entity can demonstrate that no
                modified genetic material may be detected in the food or food
                ingredient, the regulated entity is not required to include a BE
                disclosure for that food or food ingredient. Consequently, AMS will not
                maintain a list of ingredients that do not include modified genetic
                material.
                 Comment: A commenter suggested that each BE food manufacturer has
                an independent duty to comply with the standard and its provisions,
                including record[hyphen]keeping, regardless of whether and when USDA
                puts a food product on its lists. Other commenters argued that
                [[Page 65860]]
                there should be no recordkeeping requirements for foods not on the
                list.
                 AMS Response: AMS believes that foods that bear a BE disclosure
                must have records to verify that disclosure. Regulated entities do not
                have to maintain records for foods that are not on the List of
                Bioengineered Foods provided in Sec. 66.6, unless a regulated entity
                has actual knowledge that a food or food ingredient is bioengineered.
                Regulated entities must make BE disclosures when their records show
                that foods or ingredients are bioengineered, regardless of whether
                those foods or ingredients are on the list. If regulated entities have
                actual knowledge that the foods or food ingredients are bioengineered
                Sec. 66.109 requires those foods and foods ingredients to bear a BE
                disclosure, and Sec. 66.302(b)(2) requires regulated entities to
                maintain records for those foods.
                 Comment: A commenter agreed with AMS's proposed 5 days to produce
                records (except in the event USDA grants an extension). A commenter
                also suggested that USDA specify business days in its timelines.
                Several commenters disagreed with the proposed five business days'
                notice to produce records. As the NBFDS is intended as a marketing
                standard unrelated to food safety, commenters stated that it is more
                appropriate for record production requirements to be consistent with
                other marketing programs (i.e. the four to six week notice given to
                produce records establishing compliance with FDA menu labeling
                requirements).
                 AMS Response: AMS agrees that the final rule should specify that
                the timelines are business days and Sec. 66.304 makes that clear. We
                also believe the timeframes in the final rule provide reasonable notice
                to regulated entities to produce records. If a regulated entity
                requires additional time to provide records, AMS may grant an
                extension. Additionally, the timelines to produce records are
                consistent with other marketing labels administered by AMS. See e.g. 7
                CFR 60.400 (country of origin labeling for fish and shellfish).
                 Comment: Several commenters supported the timeline of at least
                three days' notice for an on-site visit, but requested that the final
                rule permit the entity to determine the location of the audit at the
                regulated entity's discretion, including the option to conduct an audit
                at a company's corporate headquarters.
                 AMS Response: AMS agrees that entities may maintain records at the
                location that best serves the entity's business needs.
                17. Compliance and Enforcement
                 Several commenters addressed the Enforcement section of the
                proposed rule, including the complaint process and audit and hearing
                procedures. Most of the comments broadly back the rule text while
                emphasizing that the rule should not authorize USDA to recall any food
                based on whether the food has a BE disclosure or impose civil penalties
                for violations.
                 Comment: Several commenters argued that accountability is a key
                aspect of a meaningful labeling claim, that label misuse must trigger
                consequences, and that USDA must prioritize and implement a more
                rigorous audit regimen and make the audit results available to the
                public. However, other commenters agreed with AMS that conducting
                unannounced audits or imposing steep fines for non-compliance issues
                are impractical, and supported the rule on the basis that AMS's
                enforcement authority remain limited as set forth in the amended Act.
                 AMS Response: AMS acknowledges various stakeholders' advocacy for
                more rigorous enforcement provisions. We note, however, that the
                amended Act prescribes an enforcement program based on records audits,
                and provides for publicizing the results of an audit after the
                opportunity for a hearing. The amended Act does not authorize civil
                penalties or other remedial or punitive measures. We believe that the
                enforcement process in the final rule that includes a complaint
                process, investigations, audits, hearings of limited scope, and
                resulting notifications to both regulated entity and the public
                sufficiently meets the amended Act's requirement for enforcement.
                 Comment: Some commenters requested that USDA more clearly state
                when an audit may occur, so producers are not erroneously subject to
                audit reviews due to baseless complaints. Several commenters asked that
                the rule specify what information is required when filing a complaint.
                One commenter asked that the rule incorporate deadlines for considering
                complaints.
                 AMS Response: In response to comments, Sec. 66.402(a) was revised
                to include a description of the information that must be submitted with
                a complaint alleging violation of the NBFDS. To ensure that audits are
                not conducted needlessly, the rule provides that AMS will consider
                complaints about potential violations of the disclosure requirements
                and determine whether audits or other further investigations are
                merited. Complaints will be considered on a case-by-case basis, and
                depending on the complexity of the complaints, some may require more
                time than others to consider, so no deadlines for consideration were
                added. If the complaint merits further investigation, the regulated
                entity will be given notice regarding access to its records. It should
                be noted that the results of all investigations will be publicized, and
                if an audit or investigation finds that the regulated entity is in
                compliance with the disclosure requirement, such finding will be made
                public.
                 Comment: Comments regarding audit procedures suggested that while
                USDA's proposal is reasonable, if an audit finds a firm out of
                compliance, then a detailed summary of records should not be released
                to the public to protect confidential business information. Some input
                cites public access concerns to confidential business information of
                product formulations or recipes. Related comments requested the
                regulated entity set the location where the audit should occur. Some
                comments stated a labeling duty should arise only if AMS, while
                conducting audit procedures, determines producer testing is inadequate
                and/or its products really do contain modified genetic material.
                 AMS Response: AMS does not release confidential business
                information, consistent with other applicable Federal regulations. AMS
                agrees that entities may maintain records at the location that best
                serves the entity's business needs. Audits can be conducted at the
                regulated entity's place of business. Regulated entities subject to the
                NBFDS should make determinations about disclosures based on records.
                AMS does not intend to test final food products to determine compliance
                with the rule.
                 Comment: Several commenters favored notice of non-compliance to
                regulated entities with a 30-day window to object and request a
                hearing, then making results public if a hearing is not requested or
                the Administrator upholds the finding of non-compliance. In addition,
                when auditing a regulated entity to determine whether the entity is in
                compliance with the disclosure standard--either on its own initiative
                or in response to a complaint by a consumer, competitor, state
                regulator, or another party--some commenters suggested AMS should begin
                by contacting the regulated entity and providing a 4 to 6-week period
                for the entity to produce appropriate records. If the company can
                provide records demonstrating the food is not subject to disclosure,
                the entity would be deemed in compliance. Another comment addressing
                timeframes advocated that deadlines for providing records for
                [[Page 65861]]
                review during audit or investigation be ``business days.''
                 AMS Response: AMS deems the goals of disclosure and minimizing
                economic burden whenever feasible is best obtained by NBDFS flexibility
                on maintaining customary business records, while requiring compliance
                with the specified timeframes for furnishing data access to AMS. Since
                all regulated entities are required to maintain customary and usual
                business records to demonstrate compliance, the timeframes provided
                should give entities adequate time to produce appropriate records.
                Nevertheless, the rule provides for extending records access deadlines
                at AMS's discretion. It should also be noted that Sec. 66.304 of the
                rule specifies records production deadlines in terms of business days.
                Thus, the rule declines to impose the timeframes suggested by these
                comments, and provides for an audit process with the more immediate
                investigative and auditing elements specified.
                 Comment: Several comments acknowledged the statutory obligation to
                provide the results of an examination or audit, and further asserted
                the rule also needs to ensure any trade secrets or confidential
                commercial information is redacted before providing publicly those
                results, as required under the Freedom of Information Act (FOIA). One
                commenter recommended that results only be posted for six months, as
                afterwards this information has diminishing relevance, but can still be
                accessed via FOIA requests.
                 AMS Response: Proprietary business information, including product
                formulation and recipes, will be kept confidential by AMS, consistent
                with FOIA, 5 U.S.C. 552(b)(4). Section 66.406 does not specify how long
                hearing results will be posted. The duration of posting hearing results
                will be in accordance with relevant departmental policy and FOIA.
                 Comment: Several commenters suggested that regulated entities
                making ``may contain'' disclosures should be subject to periodic
                compliance audits in a separate mode from other regulated entities.
                 AMS Response: The final NBFDS does not provide for ``may contain''
                disclosures.
                 Comment: Several commenters argued a deadline for agency responses
                to complaints should be set, and a standard for when and why further
                investigation is warranted should be established. These comments
                recommended USDA should audit or examine records of manufacturers and
                establish fines for non-compliance violations. In addition, comments
                suggested the audit and hearing process should be undertaken pursuant
                to deadlines to ensure timely resolution, and all results must be made
                public.
                 AMS Response: AMS notes the concern, but determines the optimal
                balance between expeditious enforcement and associated aspects,
                including complaints, audit, examination, investigation, hearing and
                appeal, and the disclosure rule's broad mandate to also facilitate
                commerce, is best met by the rule's mix of strict record access
                deadlines with further timeframes for hearing request and appeal. Other
                response deadlines are deemed impractical, as audits or investigations
                are case specific, require individual time to complete, and reflect
                various factors such as extensiveness of a case under review and AMS
                workload.
                 Comment: Many commenters recommended that AMS include limitations
                on recall authority in the final rule.
                 AMS Response: The amended Act does not authorize product recalls
                based on compliance with the disclosure requirements of the NBFDS.
                Thus, establishing limitations on recall authority is unnecessary.
                18. Compliance Dates
                 AMS proposed an initial compliance date of January 1, 2020, for all
                regulated entities other than small food manufacturers whose initial
                compliance date would be January 1, 2021. We also proposed allowing
                regulated entities until January 1, 2022, to use up labels that have
                been printed by the initial compliance date. We received many comments
                on this proposal.
                 Comment: Several commenters argued that manufacturers have had
                plenty of warning about the NBFDS and that consumers have waited a long
                time for mandatory bioengineered food labeling and should not have to
                wait longer. Other commenters suggested extending compliance deadlines
                for all manufacturers, explaining that label changes are costly and
                time consuming. Still other commenters agreed with the compliance dates
                as proposed, finding that they hit a balance between consumer desire
                for information and industry need for time to make label changes. Other
                commenters advocated that the compliance dates for the NBFDS should
                align with the FDA deadlines related to the recently updated Nutrition
                Facts and Supplement Facts panel.
                 Several commenters claimed that manufacturers could theoretically
                continue printing and using non-compliant labels for up to six years
                after the Act was amended to require mandatory BE food disclosure.
                Those commenters urged AMS to allow a shorter compliance period for
                label use-up. Food manufacturer comments generally supported the
                proposed label use-up provision, but they asked that the final rule
                provide a two-year compliance period after the compliance date, rather
                than specifying a hard date, to allow for regulatory delays.
                 Commenters also urged AMS to allow the use of labels compliant with
                the preempted State GMO labeling laws during the compliance period.
                Some commenters recommended that AMS allow entities to apply stickers
                or ink stamp disclosures to existing labels to reduce waste. Others
                suggested that AMS incorrectly assumes manufacturers maintain large
                label inventories, asserting that manufacturers order labels in the
                smallest batches economically practical.
                 Several commenters requested additional time for regulated entities
                to meet the requirements of the NBFDS because complying with the
                regulatory requirements of the NBFDS will be complex. They explained
                how regulated entities will need time to determine how their specific
                business might be impacted by the labeling and recordkeeping
                requirements of the NBFDS, and the challenges in meeting the proposed
                January 1, 2020, deadline. Several commenters explained how labeling
                costs would not be costly as many companies print labels in minimally
                necessary quantity and print labels themselves using digital equipment.
                Under this view, the proposed January 1, 2020, compliance date would be
                more than enough time for affected entities to make necessary changes
                to achieve compliance.
                 Other comments supported the proposed compliance dates. Conversely,
                many commenters felt that the compliance dates and compliance periods
                proposed in the NPRM were too lenient, and that regulated entities
                should be required to immediately change their labels to denote the
                presence of bioengineered food and/or food ingredients. They explained
                that consumers have a right to know that the food they are buying is
                bioengineered and should have access to this information as soon as
                possible.
                 AMS Response: Because this rule is a major rule, the effective date
                will be February 19, 2019 to comply with the Congressional Review Act.
                After consideration of the comments, AMS has decided to adopt
                implementation dates, a compliance date, and a compliance period. The
                implementation dates are the same as the proposed
                [[Page 65862]]
                compliance dates: January 1, 2020, for regulated entities other than
                small food manufacturers and January 1, 2021, for small food
                manufacturers.
                 As evaluated in the Regulatory Impact Analysis, AMS recognizes that
                this final rule will be complicated to implement, requiring regulated
                entities to modify their existing business practices, and thus,
                regulated entities will need adequate time to come into compliance.
                Requiring compliance on the rule's effective date or by January 1,
                2020, would be overly burdensome because of the time and cost involved
                in determining which foods require disclosure, identifying the required
                records, modifying labels, and providing the appropriate disclosure on
                the labels. In establishing the compliance dates, AMS determined that
                regulated entities should have greater flexibility, beyond using
                existing label inventories, to transition to the mandatory BE
                disclosure and recordkeeping. Thus, the final rule includes a voluntary
                compliance period and the mandatory compliance date. As explained
                above, regulated entities may voluntarily comply with the requirements
                of part 66 until December 31, 2021. Beginning on January 1, 2022, all
                regulated entities must comply with the requirements. Those periods are
                comparable to the extended compliance date of January 1, 2020, for
                FDA's Nutrition Facts and Supplement Facts Label and Serving Size final
                rules, which is approximately 3.5 years after FDA published the final
                rules. We note that many food manufacturers have complied with the
                FDA's final rules well ahead of the compliance date, and we anticipate
                the same for the NBFDS.
                19. Use of Existing Label Inventories
                 AMS recognizes that the new NBFDS will require regulated entities
                to make BE disclosures on their labels. The NPRM included a proposal to
                allow regulated entities a period of time to use their existing label
                inventories and AMS received several comments in support and in
                opposition to this proposal.
                 Comment: Many commenters supported continuing use of existing label
                inventories until the compliance deadline. They believed that ongoing
                use of existing inventories reflects the best economic, environmentally
                valid option to mitigate waste associated with letting existing label
                stock go unused if not depleted before the deadline. Such feedback
                sought an extension of the compliance deadline until existing stock had
                been exhausted or materially depleted. Several commenters were
                concerned that by providing a blanket exemption for unused label stock,
                AMS would be encouraging noncompliance. One commenter expressed concern
                that the rule has insufficient safeguards to prevent or discourage
                excess labels being printed merely to escape or unduly extend the
                compliance deadline.
                 AMS Response: As explained above, AMS is adopting a voluntary
                compliance period until December 31, 2021, to allow regulated entities
                more flexibility. Thus we are not adopting the proposal to allow
                regulated entities to use existing label inventories because it is
                unnecessary.
                 Comment: Commenters suggested an alternative website disclosure
                option be available until new labels can be printed.
                 AMS Response: The amended Act does not authorize AMS to require an
                independent website disclosure. Regulated entities, however, are free
                to include BE disclosures on their websites.
                20. Regulatory Flexibility Analysis
                 The Agricultural Marketing Service sought public comment on several
                aspects of the proposed National Bioengineered Food Disclosure Standard
                rule to guide efforts in creating a final rule for implementation.
                Though the proposed rule was not predicted to have a significant
                adverse economic impact on substantial number of small entities, the
                Agricultural Marketing Service conducted an initial regulatory
                flexibility analysis and provided suggestions and analysis of measures
                to reduce the economic effect on small entities. For purposes of the
                regulatory flexibility analysis, AMS solicited comments regarding
                suggested standards to define ``very small food manufacturer'' based
                upon a range of annual receipts. Additionally, AMS sought comments on
                the defining a ``small food manufacturer'' based upon receipts or upon
                number of employees to determine what firms should receive additional
                time to comply with the disclosure requirements of the rule. Comment
                summaries below represent public input on suggested flexibility
                provisions in the proposed rule.
                 Comment: Commenters supported a range of definitions for a ``very
                small food manufacturer.'' Some commenters suggested that there be no
                exemption for food manufacturers of any size. Many commenters supported
                the alternative definition analyzed by AMS to narrow ``very small food
                manufacturers'' as those with less than $500,000 in annual receipts.
                Several noted this number would comply with similar standards imposed
                by the FDA for nutrition labeling requirements. Many of these
                commenters cited a desire for increased transparency by labeling more
                products. Some commenters supported the proposed definition of food
                manufacturers with $2.5 million or less in annual receipts, citing the
                high costs of bringing their business into compliance with the rule.
                Several commenters also proposed an alternative definition of food
                manufacturers with less than $1 million in annual receipts. These
                commenters cited the FDA's use of this number to define ``very small
                businesses'' in rules not related to food labeling.
                 AMS Response: AMS considered a range of definitions for a ``very
                small food manufacturer'' including the small business definitions
                under FDA and U.S. Census Bureau (USCB) regulations. AMS evaluated the
                impact of applying various definitions by estimating the number of
                firms that would be exempted, the number of products that would likely
                be exempt, and the proportion of annual industry sales that would
                exempt under each exemption level. Exempting manufacturers with annual
                receipts of less than $2.5 million will provide regulatory relief to 74
                percent of food manufacturers and 45 percent of dietary supplement
                manufacturers, while reducing the number of products covered by only
                one percent for both food and dietary supplement manufacturers.
                 Comment: To define ``small food manufacturers,'' some commenters
                expressed interest in aligning the definition with Small Business
                Administration standards on number of employees rather than the
                proposed annual receipts definition to promote consistency. Many of
                these commenters supported the AMS alternative definition of businesses
                with fewer than 500 employees. Other commenters suggested defining
                ``small food manufacturers'' as those with less than $2.5 million in
                annual receipts.
                 AMS Response: The Small Business Administration uses both the
                number of employees and annual receipts to describe business size
                categories. Because food and dietary supplement manufacturers are in
                the manufacturing sector, they are both defined by number of employees
                for purposes of SBA size categorization. However, the firms defined as
                small or very small for purposes of the NBFDS all fall well below the
                SBA definition of small, so we do not feel we need to be bound by that
                methodology. The FDA nutrition labeling definition of small is based on
                sales rather than number of employees, and it is important to remain
                consistent with that definition. We decided to extend the use of
                receipts to define very small food manufacturers because we
                [[Page 65863]]
                believe it to be administratively simpler, as it does not require
                development of an averaging system to track employees over time
                (especially in firms that may have some degree of seasonality).
                 Comment: Some commenters specifically suggested that we define very
                small manufacturer as a manufacturer with annual receipts below
                $2,500,000 or less than 50 employees.
                 AMS Response: While we do not have data on manufacturers with less
                than 50 employees (Census has data cutoffs at 20 employees and 100
                employees), we do know that defining very small manufacturers as those
                with less than 20 employees would exempt the same 74 percent of firms
                as receipts less than $2,500,000. So, the compound definition would
                result in significantly more exemptions. When Census uses the term very
                small enterprise, it refers to 20 employees. The fact that the results
                of estimating exemptions at 20 employees and $2,500,000 annual receipts
                are so close gives us confidence that we are not outside of the
                reasonable norm in using this cutoff.
                 Comment: Several commenters also sought shorter compliance
                deadlines and no implementation extensions for small food manufacturers
                with more than $2.5 million in annual receipts. Several commenters
                insisted no entities be exempted from the NBFDS, including those
                defined as very small and small food manufacturers.
                 AMS Response: AMS appreciates that several commenters insisted no
                entities be exempted from the NBFDS including those defined as very
                small and small food manufacturers, however, the very small food
                manufacturer exemption is a statutory requirement. Congress
                contemplated some level of undisclosed use of bioengineered foods to
                avoid undue burden on very small food manufacturers. Our goal is to
                find a reasonable balance between the number of small firms that are
                exempted and the number of products for which the consumer may not
                receive full disclosure of bioengineered content. By defining ``very
                small food manufacturers'' as those with annual receipts below
                $2,500,000, about 74 percent of food manufacturers are exempt from
                mandatory disclosure, but 96 percent of products will still be covered.
                 Comment: Some comments further suggested the proposed exemption for
                very small food manufacturers be extended to very small food retailers
                using the standard in FDA's Menu Labeling Rule applicable only to
                restaurants and similar retail food establishments that are part of a
                chain with 20 or more locations doing business under the same name and
                offering for sale substantially the same menu items.
                 AMS Response: The exemption for ``very small food manufacturers''
                is provided for in the amended Act. The amended Act also provides an
                exemption for all restaurants and similar food establishments. The
                amended Act does not contain a similar exemption for retail
                establishments that are not manufacturers or restaurants. However, the
                portions of grocery stores and similar retail establishments that
                prepare food for immediate consumption (e.g. deli or prepared food
                section) fall within the definition of restaurant and are exempt from
                the disclosure requirement. So unpackaged food in the produce section
                would be subject to disclosure if it meets the definition of
                bioengineered food, while the same product used as an ingredient in a
                sandwich in the deli would not.
                21. Regulatory Impact Analysis
                 AMS provided a Regulatory Impact Analysis (RIA) with the proposed
                rule that provided details on the expected costs and benefits of the
                rule, and solicited comments.
                 Comment: One commenter provided a detailed analysis of the costs
                and benefits of the NBFDS conducted by John Dunham and Associates (JDA)
                (National Bioengineered Food Disclosure Standard: A Review of the
                United States Department of Agriculture's Regulatory Impact Analysis
                (Brooklyn, NY: June 2018)). The JDA assessment estimated much higher
                costs than the AMS analysis, though since it also estimated much higher
                benefits, the JDA analysis concluded that the Federal disclosure
                standard would be the most cost-effective method to provide information
                and minimize inefficiencies caused by inconsistent State-level
                standards. JBA found cost savings of avoiding compliance with twenty
                separate state rules to be $97.3 billion over twenty years and $129.7
                billion cost savings over the same period if all 51 states implemented
                different labeling provisions.
                 AMS Response: The JDA assessment provides valuable corroborating
                evidence of the net benefits of the NBFDS. However, AMS could not adopt
                JDA's methodology--and higher cost and benefit estimates--for the RIA
                since this methodology incorporates a broader set of impacts and
                transfers than recommended by OMB for regulatory impact assessment. OMB
                Circular A-4 admonishes agencies to focus on opportunity costs, the
                real expenditure of society's resources, and to avoid counting
                transfers as benefits or costs. JDA uses a partial equilibrium input-
                output model (IMPLAN) to estimate the costs of the NBFDS. This model
                estimates the cost of labeling to specific industries/sectors and then
                calculates the multiplier effects on other industries and consumers
                (prices held constant) within the study region. Such an analysis tracks
                transfers rather than the commitment of real resources to compliance.
                OMB Circular A-94 states ``Employment or output multipliers that
                purport to measure the secondary effects of government expenditures on
                employment and output should not be included in measured social
                benefits or costs.'' Moreover, the JDA analysis only tracks half of the
                equation in that it follows the changes in upstream expenditures
                resulting from decreased expenditures by food manufacturers, but does
                not track the increased downstream expenditures related to additional
                income to label printers. While partial equilibrium models can be very
                useful for evaluating local effects of a specific policy and for other
                purposes, its results for purposes of evaluating compliance costs tends
                to inflate the compliance costs by the velocity of money. However,
                because the velocity of money is constant within the region, the
                relative attractiveness of individual policy choices would be the same
                as if those alternatives were evaluated based on opportunity cost
                alone.
                 Comment: Many comments addressed the RIA's discussion of signage in
                stores selling fresh produce. These generally disagreed with the
                proposal that retailers be responsible for disclosure in any
                circumstances because manufacturers and suppliers are better equipped
                to provide labelling information and costs will be too burdensome on
                retailers. A common concern identified proposed producer requirements
                regarding modifying contracts for manufacturers to notify end users
                when a product is reformulated (or otherwise changed) as time consuming
                and costly. However, these comments agreed with the RIA that if
                retailers must be responsible for labeling, signage as posted by the
                retailer may be an appropriate method to help keep costs low for
                retailers and provide consistency for consumers. Some comments asked
                the final rule allow retailers to post signage such as a single sign
                near a produce section listing all BE foods in that section, to further
                reduce retailer burden.
                 AMS Response: Retailers should not have to take into account costs
                associated with modifying contracts to provide for end user
                notification of
                [[Page 65864]]
                product reformulations since packaged food will be labeled by the
                manufacturers. For prepared foods sold by grocers in in-store delis or
                salad bars, Sec. 66.5(a) provides an exemption for food served in a
                restaurant or similar retail food establishment from disclosure under
                the NBFDS. Section 66.1 now defines ``similar retail food
                establishment'' as a cafeteria, lunch room, food stand, food truck,
                transportation carrier (such as a train or airplane), saloon, tavern,
                bar, lounge, other similar establishment operated as an enterprise
                engaged in the business of selling prepared food to the public, or
                salad bars, delicatessens, and other food enterprises located within
                retail establishments that provide ready-to-eat foods that are consumed
                either on or outside of the retailer's premises.
                 Comment: Some comments further suggested the proposed exemption for
                very small food manufacturers be extended to very small food retailers
                using the standard in FDA's Menu Labeling Rule applicable only to
                restaurants and similar retail food establishments that are part of a
                chain with 20 or more locations doing business under the same name and
                offering for sale substantially the same menu items.
                 AMS Response: The exemption for ``very small food manufacturers''
                is provided for in the amended Act. The amended Act also provides an
                exemption for all restaurants and similar food establishments. The
                amended Act does not contain a similar exemption for retail
                establishments that are not manufacturers or restaurants. However, the
                portions of grocery stores and similar retail establishments that
                prepare food for immediate consumption (e.g. deli or prepared food
                section) fall within the definition of restaurant and are exempt from
                the disclosure requirement. So unpackaged food in the produce section
                would be subject to disclosure if it meets the definition of
                bioengineered food, while the same product used as an ingredient in a
                sandwich in the deli would not.
                 Comment: Some comments noted the RIA does not address all market
                impacts under a rule that includes products containing highly refined
                ingredients within the definition of a bioengineered food. The
                expressed concern was this does not consider price impacts of presuming
                refined ingredients not containing modified genetic material are BE
                foods under Position 2, when in fact they are identical to all other
                refined ingredients from conventional crops. Such input recommended AMS
                exclude refined ingredients from definition of BE foods because of
                these unidentified likely significant harmful effects on the
                agricultural value chain. Related comments addressed economic
                consequences of presuming beet sugar is a BE food when it is identical
                to other refined sugar products, noting costs will be greater than the
                RIA estimates. Citing Vermont's labeling law as an example, such
                feedback advised there will be significant market consequences
                resulting from market discrimination resulting in higher consumer
                prices if refined sugar is included in a BE food definition. Farms will
                bear the brunt of the economic impact as there are currently no non-
                bioengineered sugar beets grown for sugar production. A commenter
                expands this concern and concludes adverse market and agricultural
                impacts will flow from any RIA presumption that refined food
                ingredients are presumptive BE foods, and will trigger market
                discrimination against such entities. Several comments express the
                broad concern that the RIA and underlying rule presume refined
                ingredients are BE, resulting in competitive harm and undue costs to
                the American farmer. Associated comments asserts the RIA significantly
                understates the costs of the rule to the sugar industry, claiming such
                industry's product is identical to all other refined sugar products,
                but would be selectively burdened under BE standards.
                 AMS Response: The commenter is referring largely to incidence of
                costs rather than the estimated magnitude. The RIA did not estimate
                cost increases across the board and does not believe that doing so is
                consistent with recent real-world experience. What the RIA does do is
                assume that manufacturers of 20 percent of products will seek to
                replace BE ingredients with non-BE alternatives. The costs associated
                with trying to avoid a cost differential is, therefore, accounted for
                in the RIA. Nevertheless, the final rule would allow manufacturers to
                demonstrate through records (potentially including test results) that a
                food or ingredient does not contain modified genetic material and would
                not be required to disclose the food or ingredient as BE. The concern
                raised by the commenter has been addressed by the final rule.
                 Comment: A number of commenters suggested that there could be
                distributional effects of the NBFDS that were not considered in the
                RIA, including impacts on farmers through segregation costs and
                consumers through higher food prices.
                 AMS Response: Potential impacts on farmers arise in the case where
                manufacturers and retailers take the marketing decision to replace BE
                ingredients with their non-BE counterparts. The RIA notes that this
                decision would entail higher costs stretching back to the farm,
                including the extra cost to farmers of supplying non-BE commodities and
                crops include the costs of sourcing non-BE seeds; avoiding cross
                contamination with BE varieties during planting, harvesting and
                transporting; driving to an elevator or handler that is farther away
                than the nearest bulk elevator; and foregoing the benefits of BE
                production. However, as noted in the RIA, these extra costs are
                reflected in price premiums paid to farmers for non-BE varieties. The
                RIA provides current estimates of this price premiums in the United
                States. AMS does not include estimates of impacts on consumer food
                prices in the RIA for two reasons. First, in the case of BE labeled
                products, it is unlikely that manufacturers will pass labeling costs on
                to consumers (manufacturers will not want to jeopardize demand for
                these newly labeled products). Second, in the case of non-BE labeled
                products, there is no evidence that the extra costs for production and
                segregation are any higher than currently paid by consumers who prefer
                non-BE products. As a result, while availability of these products
                could rise as a result of the NBFDS, non-BE prices could remain
                constant or actually decline in the long run as production expands.
                 Comment: Some comments found the RIA inadequately assessed societal
                costs associated with electronic and digital disclosure. Such input
                asserted these disclosure methods would ultimately burden consumers who
                would not have sufficient product information, given retailers will be
                reluctant to purchase expensive scanning equipment. Consumers in low-
                income rural areas already lacking connective capabilities equivalent
                to urban areas would be especially burdened.
                 AMS Response: Potential impact associated with electronic and
                digital disclosure is more fully addressed by comment responses
                directly assessing electronic and digital link disclosures herein. AMS
                strikes a reasonable balance between offering various label disclosure
                alternatives, realizing stakeholder phone, internet or digital access
                may vary by locale, customer expertise, income or related factors. Not
                all BE food packaging and presentation will be amenable to electronic
                or digital disclosure. By offering several disclosure alternatives, AMS
                seeks least burdensome commercial impact consistent with the regulatory
                objective to meet public demand for consistent accurate label
                information.
                 Comment: Several comments identified specific burden to small
                [[Page 65865]]
                entities from labeling and associated requirements, asserting food
                retailers would also be selectively burdened by labelling and other
                regulatory aspects. Other negative input alleged inconsistency and
                conflict with international norms, potentially promoting trade
                disputes.
                 AMS Response: On analysis of comments and other data, including
                studies, AMS concludes impacts to producers are mitigated by exemptions
                for qualifying ``small'' and ``very small'' entities, by offsetting
                efficiencies of a uniform standard, and by consideration to
                international norms and trade. The proposed rule subjects importers to
                the same disclosure and compliance regimen as domestic entities. AMS's
                interest is to facilitate imports and exports under arrangements where
                BE labeling is consistent with the NBFDS. Under such arrangements,
                countries could agree to recognize each other's BE labeling
                requirements as comparable. This would allow foreign food products with
                comparable BE labeling to be sold in the US, assuming they meet all
                other labeling and safety requirements. Overall, AMS's economic
                analysis indicates it is likely this rule would not have a significant
                impact on a substantial number of small businesses.
                 Comment: A number of commenters referred to an assessment conducted
                by the Grocery Manufacturers Association (GMA) in 2017 that found that
                the exclusion of refined ingredient would result in 78 percent (78%)
                fewer products being disclosed, as opposed to USDA's assessment that
                exclusion of refined ingredients would result in 25 percent (25%) fewer
                products being disclosed.
                 AMS Response: The GMA assessment considered a categorical exemption
                of all refined ingredients. In contrast, USDA's estimate for scenario 2
                considered an exemption for only sugar and oil and in scenario 3, an
                exemption for ingredients that test negative for rDNA (not a blanket
                exemption of all refined ingredients). In both cases, since the
                exemptions are smaller than assumed in the GMA study, it is reasonable
                to expect that the number of exempted food products would also be
                smaller. In addition, the USDA study considered ``nesting'' when
                calculating the impact of exempting refined ingredients such as sugar.
                Nesting recognizes that most labeled foods contain more than one
                ingredient. If products are not required to label due to the presence
                of sugar, for example, that does not mean that the product itself does
                not need to be labeled if it contains other ingredients that are not
                part of the categorical sugar exemption. For example, just looking at
                the first product that shows up on a search of food products that
                contain ``sugars'' as an ingredient in LabelInsight, we find a breaded
                chicken product. The first few ingredients listed on the product label
                include Salt, Spice, Sugars, Water, Onion Powder, Garlic Powder,
                Dextrose, and Modified Food Starch. The categorical exemption would
                apply to Sugars and Dextrose, but the product would still require
                disclosure to the presence of Spice and Modified Food Starch. Nesting
                results in fewer products being exempted from labeling than might be
                assumed from a count of refined ingredients. Since the USDA and GMA
                assessments are based on two different data sets, it is impossible to
                directly compare results.
                 Also, the two estimates are based on different data sources. USDA
                relied on ingredient data reported on food labels while GMA relied on a
                survey of its membership. It is not surprising that the two approaches
                might come up with somewhat different results.
                 That said, the final version of the RIA takes another look at which
                ingredients are likely to be exempt under the condition that mandatory
                disclosure only applies to foods or ingredients that meet the statutory
                definition of bioengineering. This reevaluation has led us to remove
                some ingredients that we had assumed would universally require
                disclosure. This has resulted in an estimate that is closer to the GMA
                estimate.
                 Comment: One commenter specifically took issue with the USDA's use
                of shielding to explain why administrative costs could increase for
                products still required to disclose in the instance of an exemption of
                refined products. The commenter argued that since manufacturers look at
                the BE status of all ingredients when they develop a new product the
                existence of low administrative costs ingredients does not obviate the
                need for manufacturers to understand the BE status of administratively
                higher cost ingredients especially for products seeking non-GMO project
                certification.
                 AMS Response: AMS disagrees with the commenter. First, the rule
                requires a disclosure determination to be made for existing as well as
                new products and the RIA is based exclusively on the costs associated
                with making this determination for existing products. As the commenter
                points out, making this determination for new products is lower because
                the BE status of ingredients is something that manufacturers do today
                as a matter of course. However there is no reason to believe that a
                product that is already on the market looked at the issue in as much
                detail as new products might. Manufacturers of existing products would
                therefore need to evaluate their ingredients and would be able to stop
                doing so as soon as they discovered an ingredient that caused the
                product to require disclosure. The fact that manufacturers may
                voluntarily subject themselves to costs beyond what the rule requires
                is not relevant to the RIA. Also, the RIA assumes that products that
                have obtained non-GMO project certification incur no costs as a result
                of this rule.
                 Comment: One commenter noted that the RIA makes many references to
                uncertainty in the estimates, and often provides upper and lower
                estimates to account for some level of uncertainty. The commenter goes
                on to note, however, that the RIA does not include a formal uncertainty
                analysis.
                 AMS Response: As noted by the commenter, in the RIA we provided
                upper and lower bound estimates where necessary to account for
                uncertainty. We incorporated more formal uncertainty analysis where
                distributional information was available, such as for the estimates for
                printing and label design costs (the upper bound represents the 95th
                percentile of the distribution of costs estimated by FDA for its
                Labeling Cost Model while the lower bound represents the 5th
                percentile) and for the analytical testing costs for bioengineered
                ingredients (with lower bound estimate set at the 5th percentile of the
                cost distribution and the upper bound at the 95th percentile, as per
                FDA's Labeling Cost Model).
                 Comment: One commenter stated that for the most part, the RIA is
                based on quality data but that the supporting documentation for the RTI
                (FDA) labeling cost model was not available to the public.
                 AMS Response: AMS posted the description of the FDA Labeling Cost
                Model in the supporting documentation for the rule.
                 Comment: One commenter stated that OMB requires a discount rate of
                0.2 percent and that because AMS used discount rates of three percent
                and seven percent, the discounting performed for the RIA was not
                properly conducted.
                 AMS Response: AMS used the discount rates specified in OMB Circular
                A-4 that are still commonly used for regulatory analysis. The 0.2
                percent discount rate referenced in the comment is from OMB Circular A-
                94 and represents the cost of money to the Federal Government to be
                used in cost-effectiveness analysis of Federal projects, not the
                average before-tax rate
                [[Page 65866]]
                of return to private capital in the U.S. that is appropriate for
                regulatory analysis.
                VI. Rulemaking Analyses and Notices
                A. Paperwork Reduction Act
                 In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
                3501-3520), AMS published a 60-day notice on reporting and
                recordkeeping requirements related to the proposed NBFDS published in
                the Federal Register on May 4, 2018. AMS submitted a request to OMB on
                May 7, 2018, for approval for a new information collection totaling
                7,973,566 hours. OMB subsequently assigned reference number 0581-0315
                to the reporting and recordkeeping requirements. As part of the
                preparation of the final rule, AMS has recalculated the information
                collection estimates based on the final requirements of the NBFDS.
                Based on this, AMS is requesting approval of a new information
                collection totaling 20,512,720 hours. Comments received on the
                reporting and recordkeeping burden are referenced below.
                1. Comments on Information Collection and Recordkeeping
                 AMS solicited comments concerning the information collection and
                recordkeeping required as a result of this rule. Specifically, AMS
                wanted to know if the proposed collection of information had a
                practical use and if the information would be needed for the agency to
                properly conduct its functions. AMS requested feedback regarding its
                estimate of the burden the proposed information collection and process
                would pose on businesses. The proposed rule also sought comments on
                ways to enhance the quality, utility, and clarity of the information to
                be collected, as well as ways to minimize the burden of the information
                collection on those required to respond.
                 Comment: Many commenters generally support the required collection
                of records to demonstrate compliance with the NFBDS, including the
                requirement for entities to maintain records for two years after a
                food's distribution for retail sale. Many commenters also agree that
                required records should rely on existing records that are customary,
                reasonable, and regularly kept and maintained in the ordinary course of
                business, and urge AMS to retain these principles in the final rule.
                One commenter asked for clarification on the rule's definition of
                ``sufficient detail.''
                 While many commenters support using the twelve categories of
                documentation AMS identified as appropriate to verify that foods are
                not bioengineered and not subject to disclosure, several have requested
                AMS offer flexibility in the types of records required to document BE
                status as long as the documentation can sufficiently prove that foods
                are not subject to mandatory disclosure. A few commenters suggest
                supplier documentation is the most important recordkeeping component
                since the disclosure requirement for finished products are based on how
                the component ingredients are derived. For foods subject to disclosure,
                some commenters believe that maintaining a record documenting the
                presence of BE ingredients should be sufficient.
                 Many commenters support AMS's decision to exempt foods certified
                under the National Organic Program from BE disclosure so manufacturers
                of these certified products would not be required to maintain
                additional records to demonstrate a certified product is not
                bioengineered. Similarly, a commenter suggests AMS should also exempt
                from disclosure any foods verified as ``non-GMO'' through commercial
                verification systems, like the Non-GMO Project, whose standards may
                meet or exceed the proposed BE standard. The commenter further suggests
                this type of verification suffices as records that establish a food or
                ingredient is not bioengineered. For other exempt foods--such as those
                derived from animals fed BE food--another commenter strongly agrees no
                records should be required from the entity producing these products.
                 Some commenters believe BE labeling requirements on BE products on
                the ``highly adopted'' or ``not highly adopted'' lists are appropriate
                and what Congress intended. These commenters also believe that, as
                proposed, the BE recordkeeping requirements inappropriately place the
                burden of proof on conventional food producers that have chosen not to
                use or produce BE products. The commenters contend the expense, time
                and responsibility of additional recordkeeping should fall on the
                entities that use or produce BE products, not those who have chosen not
                to use BE products. As such, they suggest the rule provides for an
                alternate approach to the currently proposed recordkeeping burden. The
                new approach would allow AMS to challenge foods not properly labeled as
                BE.
                 Several commenters support the rule's requirement for imported
                foods to provide the same recordkeeping documentation as food produced
                domestically. According to this input, without such requirements, U.S.
                food manufacturers would be at a profound disadvantage to international
                food manufacturers. Another commenter suggests the rule may not need to
                require a mutual recognition agreement when a prior processing
                agreement exists between the U.S. and a foreign country, unless a BE
                ingredient is introduced to a product during processing in that foreign
                country. For example, when products are shipped to a foreign country
                for further processing, shipped back to the U.S. for secondary
                processing, and then sold in the U.S. market, the mutual recognition
                agreement would not be needed.
                 AMS Response: AMS appreciates the range of comments provided
                regarding recordkeeping requirements resulting from this rule and notes
                commenters generally support AMS's need to collect customary business
                records to establish a regulated entity's compliance with the NBFDS.
                AMS agrees that regulated entities may need flexibility in the types of
                records required to document compliance with the NBFDS. As such, AMS
                does not specify the records that must be maintained, but allows
                regulated entities discretion in determining what records will
                demonstrate compliance. AMS also notes that, for the purposes of this
                rule, any food manufacturer, importer or retailer offering for retail
                sale foods on the List of Bioengineered Foods is considered a regulated
                entity. Regulated entities must maintain records on foods that trigger
                a BE disclosure and to verify food without a disclosure is not
                bioengineered. Section IV.A.1 further details AMS's position on
                recordkeeping.
                 Comment: Commenters suggest, in the final rule, AMS establish an
                exemption from the NBFDS for raw fruits and vegetables, consistent with
                the exemption in FDA's traditional nutrition facts panel (NFP) labeling
                requirements. Commenters contend labeling raw fruits and vegetables is
                not practical and would be burdensome to the regulated entities. They
                further explain fruits and vegetables of the same variety may be
                sourced from different suppliers and are often mixed together in large
                bins. As such, requiring BE disclosure for these unpackaged foods would
                be difficult and may lead to consumer confusion.
                 In addition, commenters suggest AMS should explore other methods of
                traceability similar to those used by major U.S. trading partners.
                Because highly refined products may not always have detectable modified
                genetic material, this input suggests AMS seek recordkeeping, reporting
                and compliance methods that validate a
                [[Page 65867]]
                food's BE status based on the entire food production process that led
                to the final product's labeling.
                 AMS Response: AMS appreciates comments suggesting raw fruits and
                vegetables be excluded from the BE disclosure requirements. AMS
                believes that such an exemption would conflict with the statutory
                requirement that foods subject to FDCA's labeling requirements are
                subject to disclosure under the NBFDS. We also appreciate that some
                commenters would like AMS to explore other traceability methods to
                detect modified genetic material in highly refined products, thereby
                causing the products to be subject to BE disclosure. However, AMS
                believes that determinations about what constitutes BE food for the
                purposes of the NBFDS should focus on the characteristics of the
                biotechnology product and not on the process by which the product is
                created. As such, highly refined products remain outside the scope of
                products subject to mandatory BE disclosure.
                 Comment: Many commenters did not specifically address accuracy of
                the estimated cost of compliance. A commenter averred prescriptive
                requirements such as the mandatory placement of disclosure text or
                symbol would add significant costs for label redesign or revamping of
                handling practices. The commenter suggests BE disclosure requirements
                remain adequately flexible to facilitate practical implementation.
                 AMS Response: AMS agrees that regulated entities may need some
                flexibility when determining the size and placement of a BE disclosure.
                The NBFDS allows flexibility for both. For further details regarding
                AMS's position on the appearance and placement of the BE disclosure,
                refer to Section III.A.3 and Section III.A.4 of this rule,
                respectively.
                 Comment: Most commenters believe foods on or containing ingredients
                from either of the proposed lists of commercially available foods are
                BE or contain BE ingredients, thereby requiring no additional
                documentation. Many also believe AMS should not create recordkeeping
                requirements for foods not on nor containing ingredients from either
                list. Other feedback supports the proposed presumption foods on or
                containing ingredients from either list are BE or contain BE
                ingredients, unless the regulated entity maintains records to
                demonstrate non-disclosure is appropriate.
                 AMS Response: AMS agrees that regulated entities may be able to
                demonstrate compliance with the NBFDS for foods on or containing
                ingredients from the consolidated List of Bioengineered Foods using
                their customary business records. AMS contends that, for the purposes
                of this rule, any food manufacturer, importer or retailer offering for
                retail sale foods on the List of Bioengineered Foods is considered a
                regulated entity. As stated in an earlier comment response, regulated
                entities must maintain records on foods that trigger a BE disclosure
                and must keep records to verify food without a disclosure is not
                bioengineered. Section IV.A.1 further details AMS's position on
                recordkeeping.
                 Comment: In the proposed rule, AMS provided flexibility to
                responsible record keepers by enabling use of multiple documentation
                sources. As such, several commenters asked that AMS incorporate
                examples of appropriate records into final rule text. Suggested
                examples include identity preserved (IP) certification, supplier
                affidavits, continuing guarantees, and statements from suppliers.
                Commenters also requested AMS clarify in the final regulation that
                appropriate records to support non-disclosure when foods contain
                ingredients from either list are not limited to testing results and
                should include traceability records. For example, if a regulated entity
                does not make a disclosure for a food containing a soy ingredient, it
                could maintain supplier records demonstrating non-BE soybeans were used
                in a product or records showing the soy ingredient accounts for less
                than 0.9% of total product weight. The commenter suggested that by
                recognizing traceability records are sufficient to support non-
                disclosure, AMS would help ensure recordkeeping requirements are
                consistent with records customary or reasonable to maintain in the food
                industry. The commenter contended food manufacturers generally do not
                maintain or receive from their suppliers testing records for
                ingredients or finished foods that demonstrate presence or absence of
                rDNA.
                 One commenter asserted AMS should clarify what ``supplier
                attestations'' refers to when regulated entities opt not to disclose
                under the rule, but choose to rely on such attestations. This input
                suggests ``supplier attestations'' is intended to refer to contractual
                documents, confirmations or other certifications entered into or
                provided by suppliers, and does not require buyers to engage in
                supplier verification programs for a marketing rather than food safety
                standard which would impose significant costs and regulatory burdens.
                 Some commenters requested AMS clarify disclosure and recordkeeping
                requirements for foods included on the commercially available, but not
                highly adopted list, be more narrowly focused on cultivars directly the
                result of bioengineering. More specifically, several commenters
                highlighted the need for AMS to avoid consumer confusion and incorrect
                labeling of certain cultivated varieties of apples by clarifying
                correct application of the definition of cultivar.
                 A commenter urged AMS to adopt the 5% total BE food substance
                option in the final rule as the threshold for exempting foods from BE
                disclosure. Since records for BE status of ingredients, as well as
                amounts of any ingredients present in a food already exist as common
                business practice, this option would not present an excessive
                recordkeeping or cost burden on regulated entities.
                 AMS Response: AMS appreciates the range of comments offering ways
                to improve the information collection and recordkeeping processes. For
                information regarding recordkeeping flexibilities, see our responses to
                other comments in the Paperwork Reduction Act section. In addition,
                Section IV.A.1 further details AMS's position on recordkeeping.
                 Comment: Commenters generally support many of the proposed rule's
                recordkeeping and information collection requirements. Some, however,
                identified requirements that would pose undue burden on entities;
                others proposed ways AMS could minimize the burden. Several commenters
                proposed AMS simplify recordkeeping requirements for food manufacturers
                by establishing one consolidated list of BE foods. Some requested any
                information necessary for verification of compliance be limited to
                protect confidential business information like product formulations and
                recipes. Since organic food processors and manufacturers regularly
                secure written verification from ingredient suppliers that highly
                refined sugars and oils are not derived from genetically engineered
                crops or organisms, commenters from that industry contend stakeholders
                across the food supply chain have already developed necessary
                recordkeeping systems to provide this type of verification regarding
                ingredients. Thus, including these types of ingredients under labeling
                disclosure requirements would not introduce new burdens or
                complications for the food industry.
                 Other commenters suggest it would be burdensome to require entities
                provide specific attestation or testing
                [[Page 65868]]
                documentation from suppliers to confirm a highly adopted crop is BE
                based on merely being on the list of highly adopted, commercially
                available BE foods. Several other commenters believe 5 business days is
                not a reasonable timeframe for companies to produce records to AMS on
                the bioengineered status of a food/food ingredient; instead, they
                suggest AMS should provide businesses four to six weeks to respond to
                records requests. Some input explains the longer timeframe, consistent
                with FDA's Menu Labeling requirements, recognizes the Disclosure
                Standard is a marketing standard not requiring the priority of a health
                and safety concern. Another commenter states maintaining records for
                two years is burdensome for regulated entities, and suggests the final
                rule should establish a one year maintenance period as is the case for
                COOL.
                 Some commenters stated analytical testing to detect presence of
                modified genetic material would present undue financial burden on the
                industry and unnecessarily increase food prices without significantly
                increasing reliability of proof in support of non-disclosure. Such
                input encouraged AMS to allow recordkeeping to focus on traceability
                and segregation, rather than analytical testing. Another commenter
                states unless a ``non-GMO''-type claim is made about a food or
                ingredient, manufacturers do not typically test for, nor maintain
                documentation about, genetic material content. The testing is costly
                when performed and it is cost-prohibitive to buy equipment and hire
                skilled laboratory personnel for in-house testing. According to the
                commenter, screening tests, which are less expensive, are often
                unreliable or inappropriate for certain products.
                 If AMS decides to exempt refined ingredients from disclosure when
                they do not contain modified genetic material, one commenter suggests
                AMS establish and maintain a list of refined ingredients considered to
                be devoid of modified genetic material. This list would significantly
                reduce the burden on entities and eliminate the need for testing and
                maintaining documentation to demonstrate an ingredient is refined.
                 Some commenters believe AMS efforts to align effective date of this
                rule with compliance date for FDA's Nutrition Facts and Supplement
                Facts label final rule will have limited effectiveness in reducing cost
                and burden of this rule. In their view, implementation of this rule
                will require completely separate cost and burden.
                 Some commenters request the proposed rule not require complicated
                calculations to demonstrate if a food falls below the set threshold
                level to be maintained. The commenters further explain dairy
                manufacturers were subject to such requirements to demonstrate
                compliance with Vermont's disclosure law. According to commenters,
                these records were time-consuming and extremely burdensome to compile.
                 AMS Response: AMS appreciates the many comments submitted offering
                ways to minimize the recordkeeping burden resulting from this rule, and
                we have made changes to the final rule to reflect commenters input. We
                consolidated the List of Bioengineered Foods to simplify recordkeeping
                requirements. We agree that recordkeeping requirements under the NBFDS
                should align with those under other AMS programs to minimize the
                recordkeeping burden on regulated entities, and we have provided
                recordkeeping flexibilities, as outlined in responses to previous
                comments in this section.
                B. E-Gov
                 USDA is committed to complying with the E-Government Act by
                promoting the use of the internet and other information technologies to
                provide increased opportunities for citizen access to Government
                information and services, and for other purposes.
                C. Civil Rights Review
                 AMS has considered the potential civil rights implications of this
                rule on minorities, women, or persons with disabilities to ensure that
                no person or group shall be discriminated against on the basis of race,
                color, national origin, gender, religion, age, disability, sexual
                orientation, marital or family status, political beliefs, parental
                status, or protected genetic information. This review included persons
                that are employees of the entities that are subject to these
                regulations.
                 A 60-day comment period was provided to allow interested persons to
                respond to the proposed rule. All written comments received in response
                to the proposed rule by the date specified were considered. A number of
                commenters expressed concern that the proposed labeling options were
                discriminatory in some fashion. The major issue expressed was that the
                lack of a smart phone would inhibit older, more rural, poorer, and/or
                minority groups from being able to access bioengineering information
                that is not visible and available directly on the packaging. Some
                commenters argued that the USDA study, conducted by Deloitte, on access
                to bioengineering disclosures using electronic and digital link
                disclosures showed that the alternatives to on-package labeling (QR
                codes, website URLs, text messaging numbers, and other alternatives)
                will be ineffective and are discriminatory. A commenter cited a Pew
                Research Center study from 2015 which purportedly shows that of the
                U.S. citizens owning a smartphone at the time, 23% had to cancel or
                suspend service due to financial constraints. The same study, being
                cited by the same commenter, is said to show that ``African Americans
                and Latinos are around twice as likely as whites to have canceled or
                cut off their smartphone service.''
                 Other commenters argued that there are access problems even for
                those who have a smartphone. Some asserted that where stores don't
                provide internet access, it could be difficult for people to access
                information provided by alternatives to on-package labeling. A
                commenter pointed to the 2015 Pew Research data alleging that African
                Americans have disproportionate functionality problems with
                smartphones, some of which is related to ``running out of data during
                the month.'' It was also pointed out that the Deloitte report showed
                certain tribal lands had limited broadband capabilities, thus
                preventing consumers in those areas from obtaining adequate access to
                the BE disclosure outside of on-package labels.
                 This final rule does not require regulated entities to alter their
                operations in ways that could adversely affect such persons or groups,
                in a discriminatory fashion. Although the electronic or digital
                disclosure option is mandated by the amended Act, the amended Act does
                not require regulated entities to utilize that disclosure option.
                Rather, the amended Act allows regulated entities to select a
                disclosure method from among several options (text, symbol, electronic
                or digital link, or text message). Regulated entities that select the
                electronic or digital disclosure option must also provide options for
                the consumer to access the BE disclosure, regardless of time of day, by
                calling a phone number. Requiring the electronic or digital disclosure
                to be accompanied by a telephone number that consumers may call to
                access the BE disclosure provides the disclosure in an accessible
                manner. Accordingly, this final rule offers several distinct avenues of
                compliance for regulated entities that can be catered to the needs of
                their consumers. Applying this approach does not deny any persons or
                groups the benefits of the program or subject any persons or groups to
                discrimination.
                [[Page 65869]]
                D. Executive Orders 12866, 13563, and 13771
                 USDA is issuing this rule in conformance with Executive Orders
                12866 and 13563, which direct agencies to assess all costs and benefits
                of available regulatory alternatives and, if regulation is necessary,
                to select regulatory approaches that maximize net benefits, which
                include potential economic, environmental, public health and safety
                effects, distributive impacts, and equity. Executive Order 13563
                emphasizes the importance of quantifying both costs and benefits,
                reducing costs, harmonizing rules, and promoting flexibility.
                 USDA estimates that the costs of the NBFDS would range from $569
                million to $3.9 billion for the first year, with ongoing annual costs
                of between $51 million and $117 million. The annualized costs in
                perpetuity would be $68 million to $234 million at a three percent
                discount rate and $91 million to $391 million at a seven percent
                discount rate.
                 These cost estimates represent the cost of the standard relative to
                a baseline in which there are no requirements for the labeling of food
                containing bioengineered foods or ingredients.
                 The NBFDS is not expected to have any benefits to human health or
                the environment. Any benefits to consumers from the provision of
                reliable information about BE food products are difficult to measure.
                Under some, but not all, potentially informative analytic baselines
                (see the accompanying regulatory impact analysis for this rule), a more
                clear-cut benefit of the NBFDS is that it eliminates costly
                inefficiencies of a state-level approach to BE disclosure. We estimate
                the size of these benefits by focusing on Vermont's BE labeling law
                because that law had been signed into law before the NBFDS was passed.
                The annualized net benefit from replacing the Vermont BE labeling law
                would be between $40 million and $49 million at a three percent
                discount rate and between $70 million and $84 million at a seven
                percent discount rate. This is our best estimate of these potential
                benefits, but we note that there is uncertainty in these estimates
                given the difficulty in predicting how implementation of the Vermont BE
                labeling law would have occurred absent the prospect of a national
                labeling law.
                 This rule meets the definition of an economically significant
                regulatory action under Executive Order 12866, as it is likely to
                result in a rule that would have an annual effect on the economy of
                $100 million or more, and thereby triggers the requirements contained
                in Executive Order 13771. See OMB's Memorandum titled ``Interim
                Guidance Implementing Section 2 of the Executive Order of January 30,
                2017, titled `Reducing Regulation and Controlling Regulatory
                Costs'[thinsp]'' (February 2, 2017).
                 The status of the rule under Executive Order 13771 depends on its
                costs relative to the regulatory requirements that would have applied
                to the regulated community before enactment of the new Federal
                standard. The analysis presented here finds that in comparison to a
                state-level approach to mandatory BE labeling, the NBFDS would impose
                less cost on the regulated community and would therefore be
                deregulatory. While acknowledging the uncertainties associated with
                estimating the magnitude of the actual reduction in costs, we use the
                midpoint of the estimated net benefits as an approximation of the
                primary estimate of annualized savings in perpetuity. This results in
                an estimated annual savings of $77 million using a discount rate of
                seven percent ($45 million using a discount rate of three percent).
                E. Final Regulatory Flexibility Analysis
                1. Introduction
                 We have examined the economic implications of this rule as required
                by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a rule has
                significant economic impact on a substantial number of small entities,
                the Regulatory Flexibility Act requires agencies to analyze regulatory
                options that would lessen the economic effect of the rule on small
                entities consistent with statutory objectives. We have concluded that
                the rule will not have a significant economic impact on a substantial
                number of small entities.
                2. Economic Effects on Small Entities
                 Guidance on rulemaking recommends SBA's definition of small
                business as it applies to the relevant economic sector, which for this
                rule are NAICS 311, 312, and 325, with indirect effects on sectors 115,
                424, 445 and 446. SBA recently revised the definition for small
                businesses. Under SBA's definition of small firms within the each 6-
                digit NAICS code expected to be impacted by the rule--164,329, or 98
                percent of 166,975 total firms. With the new SBA definitions of small
                business, the share of potentially affected manufacturers now
                classified as small is 96 percent (26,213 out of 27,176 total
                manufacturing firms).
                3. Definition of Small Business
                 The definition of small business for the Regulatory Flexibility
                Analysis are those codified in 13 CFR 121.201.
                4. Coordination of Definition of Small Food Manufacturers With FDA
                Definition
                 For the purposes of the implementation of the delay for ``small
                food manufacturers,'' AMS proposed that USDA adopt a definition of
                small food manufacturer that would align with FDA. AMS has attempted to
                be as consistent as possible with other similar existing regulations in
                order to minimize the cost burden on the industry.
                 The definition of small food manufacturer is ``any food
                manufacturer with annual receipts of at least $2,500,000, but less than
                $10,000,000.'' This definition would be similar to FDA's criteria for
                allowing an extended compliance period in its recent revision
                requirements for food labeling (Docket numbers FDA-2012-N-1210 and FDA-
                2004-N0258).
                 The final rule maintains this definition of small food
                manufacturer.
                 This maintains consistency between the NBFDS and the FDA nutrition
                labeling requirements. The delay provided to small food manufacturers
                applies only to the initial compliance date. Where the final rule
                provides additional time to use up existing label stock the deadline
                for exercising this additional flexibility is the same for all
                manufacturers regardless of size.
                5. Exemptions for Very Small Food Manufacturers
                 AMS proposed to define very small food manufacturer as ``any food
                manufacturer with annual receipts of less than $2,500,000.'' We also
                analyzed the following scenarios for comparison:
                 Alternative A: A food manufacturer with less than $500,000 in
                annual receipts.
                 Alternative B: A food manufacturer with less than $5,000,000 in
                annual receipts.
                 Currently, there are roughly 18,530 businesses that would fall into
                the very small category under the proposed definition; 11,170
                businesses that would fall into the very small category under
                Alternative A; and, 20,440 businesses that would fall into the very
                small category under Alternative B. This is out of an estimated 27,176
                total firms.
                 Table 3 presents data showing the number of establishments by size
                classification according to the different definitions of very small,
                small, and large manufacturers.
                [[Page 65870]]
                 Table 3--Number of Manufacturers for Alternative Size Classifications
                ----------------------------------------------------------------------------------------------------------------
                
                ----------------------------------------------------------------------------------------------------------------
                 Size classification options for manufacturers Number of firms
                ----------------------------------------------------------------------------------------------------------------
                All manufacturing establishments................................ 27,176
                ----------------------------------------------------------------------------------------------------------------
                 Very small Small Large
                ----------------------------------------------------------------------------------------------------------------
                Small Firm Criteria:
                 Firms with less than $10 million in annual food sales (FDA N/A 23,029 4,147
                 definition)................................................
                Very Small Firm Alternatives:
                Very small alternative A:
                 Firms with less than $500,000 in annual receipts............ 11,527 11,502 4,147
                Very small alternative B:
                 Firms with less than $5,000,000 in annual receipts.......... 21,581 1,448 4,147
                Very small proposed definition:
                 Firms with less than $2,500,000 in annual receipts.......... 19,455 3,574 4,147
                ----------------------------------------------------------------------------------------------------------------
                6. Costs to Small Entities
                 We compared the maximum annualized cost in our analysis of the rule
                to the revenue of firms in each size category (by receipts) using 2012
                Census data. There was no covered size category of firms for which
                costs were greater than one percent of revenues.
                7. Summary
                 Under the Regulatory Flexibility Act (5 U.S.C. 606(b)), we conclude
                that the rule will not have a significant economic impact on a
                substantial number of small entities. The statutory exemption of very
                small food manufacturers further reduces the impact on the entities
                that are likely to face the highest costs relative to revenue.
                F. Executive Order 13175
                 This rule has been reviewed in accordance with the requirements of
                Executive Order 13175, Consultation and Coordination with Indian Tribal
                Governments. Executive Order 13175 requires Federal agencies to consult
                and coordinate with tribes on a government-to-government basis on: (1)
                Policies that have tribal implications, including regulations,
                legislative comments or proposed legislation; and (2) other policy
                statements or actions that have substantial direct effects on one or
                more Indian tribes, on the relationship between the Federal Government
                and Indian tribes, or on the distribution of power and responsibilities
                between the Federal Government and Indian tribes.
                 AMS has assessed the impact of this rule on Indian tribes and
                determined that this rule would not, to our knowledge, have tribal
                implications that require tribal consultation under E.O. 13175. AMS
                hosts a quarterly teleconference with Tribal Leaders where matters of
                mutual interest regarding the marketing of agricultural products are
                discussed. Information about the congressionally mandated NBFDS was
                shared during those quarterly calls, and Tribal leaders were invited to
                provide input into the development of the new national Standard. As
                well, in the NPRM that was published on May 4, 2018 (83 FR 19860), AMS
                invited Tribal Leaders to consult on the Tribal implications of the
                proposed rule. AMS received no requests for a consultation. On June 21,
                2018, AMS hosted a quarterly conference call with Tribal
                representatives to update them on upcoming policies, regulations,
                programs, and services that could have a substantial effect on or
                benefit to Tribes. During the call, AMS provided fourteen (14) Tribal
                representatives with an overview of the proposed rule and extended
                opportunities for questions or requests for more information. At that
                time, none were expressed.
                 On July 3, 2018, the comment period for the proposed rule closed.
                None of the approximately 14,000 responses received on the NPRM were
                identified as being submitted from Tribal representatives. AMS did
                receive public comments in response to the NPRM's request for input
                about the use of electronic or digital disclosures to convey
                information about bioengineered food content to consumers. Commenters
                asserted that Native Americans, along with elderly Americans and other
                U.S. minority populations, may lack adequate access to smartphone
                technology that would enable them to use electronic or digital
                disclosures. The Secretary acknowledged this potential lack and
                determined to provide a comparable bioengineered food disclosure option
                to allow greater access to food information for all consumers. Such
                provision is made in Sec. 66.108 of the final rule.
                 Based on the above, AMS has concluded that this final rule will not
                have Tribal implications that require a consultation. In implementing
                the final rule, AMS will develop and deliver outreach and education for
                and to all regulated entities. In addition, AMS will work with the
                Office of Tribal Relations to ensure ongoing meaningful consultation is
                provided, where needed or requested. If a tribe requests consultation,
                AMS will work with the USDA Office of Tribal Relations to ensure
                meaningful consultation is provided where changes, additions, and
                modifications identified herein are not expressly mandated by Congress.
                G. Executive Order 12988
                 This final rule has been reviewed under Executive Order 12988,
                Civil Justice Reform. The final rule is not intended to have
                retroactive effect. The amended Act specifies that no State or
                political subdivision of a State may directly or indirectly establish
                under any authority or continue in effect as to any food or seed in
                interstate commerce any requirement relating to the labeling or
                disclosure of whether a food is bioengineered or was developed or
                produced using bioengineering for a food subject to the national
                bioengineered food disclosure standard that is not identical to the
                mandatory disclosure requirements under that standard. With regard to
                other Federal statutes, all labeling claims made in conjunction with
                this regulation must be consistent with other applicable Federal
                requirements. There are no administrative procedures that must be
                exhausted prior to any judicial challenge to the provisions of this
                rule.
                H. Executive Order 13132
                 This rule has been reviewed under Executive Order 13132,
                Federalism. Executive Order 13132 directs agencies to construe, in
                regulations and otherwise, a Federal statute to preempt State law only
                where the statute contains an express preemption provision or there is
                some other clear evidence to conclude that Congress
                [[Page 65871]]
                intended preemption of State law, or where the exercise of State
                authority conflicts with the exercise of Federal authority under the
                Federal statute. The amended Act includes an express preemption of
                State law. Sections 293(e) and 295(b) provide that no State may
                directly or indirectly establish or continue with any food or seed
                requirement relating to the labeling or disclosure of whether the food
                or seed is bioengineered or was developed or produced using
                bioengineering, including any requirement for claims that a food or
                seed is or contains an ingredient that was developed by or produced
                using bioengineering.
                 Upon establishment of the NBFDS, States may adopt standards that
                are identical to the NBFDS, and States may impose remedies for
                violations of their standards, such as monetary damages and injunctive
                relief.
                 With regard to consultation with States, as directed by Executive
                Order 13132, USDA notified the governors of each U.S. State of the
                amended Act's purpose and preemption provisions by letter in August
                2016. Copies of the letters may be viewed at https://www.ams.usda.gov/rules-regulations/be.
                List of Subjects in 7 CFR Part 66
                 Agricultural commodities, Bioengineering, Food labeling, Reporting
                and recordkeeping requirements.
                0
                For the reasons set forth in the preamble, 7 CFR chapter I is amended
                by adding part 66 to read as follows:
                PART 66--NATIONAL BIOENGINEERED FOOD DISCLOSURE STANDARD
                Subpart A--General Provisions
                Sec.
                66.1 Definitions.
                66.3 Disclosure requirement and applicability.
                66.5 Exemptions.
                66.6 List of Bioengineered Foods.
                66.7 Updates to the List of Bioengineered Foods.
                66.9 Detectability.
                66.11 Severability.
                66.13 Implementation and compliance.
                Subpart B--Bioengineered Food Disclosure
                66.100 General.
                66.102 Text disclosure.
                66.104 Symbol disclosure.
                66.106 Electronic or digital link disclosure.
                66.108 Text message disclosure.
                66.109 Required disclosure with actual knowledge.
                66.110 Small food manufacturers.
                66.112 Small and very small packages.
                66.114 Food sold in bulk containers.
                66.116 Voluntary disclosure.
                66.118 Other claims.
                Subpart C--Other Factors and Conditions for Bioengineered Food
                66.200 Request or petition for determination.
                66.202 Standards for consideration.
                66.204 Submission of request or petition.
                Subpart D--Recordkeeping
                66.300 Scope.
                66.302 Recordkeeping requirements.
                66.304 Access to records.
                Subpart E--Enforcement
                66.400 Prohibited act.
                66.402 Audit or examination of records.
                66.404 Hearing.
                66.406 Summary of results.
                 Authority: 7 U.S.C. 1621 et seq.
                Subpart A--General Provisions
                Sec. 66.1 Definitions.
                 Act means the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et
                seq.), as amended to include Subtitle E--National Bioengineered Food
                Disclosure Standard and Subtitle F--Labeling of Certain Food.
                 Administrator means the Administrator of the Agricultural Marketing
                Service, United States Department of Agriculture, or the representative
                to whom authority has been delegated to act in the stead of the
                Administrator.
                 AMS means the Agricultural Marketing Service of the United States
                Department of Agriculture.
                 Bioengineered food means--
                 (1) Subject to the factors, conditions, and limitations in
                paragraph (2) of this definition:
                 (i) A food that contains genetic material that has been modified
                through in vitro recombinant deoxyribonucleic acid (rDNA) techniques
                and for which the modification could not otherwise be obtained through
                conventional breeding or found in nature; provided that
                 (ii) Such a food does not contain modified genetic material if the
                genetic material is not detectable pursuant to Sec. 66.9.
                 (2) A food that meets one of the following factors and conditions
                is not a bioengineered food.
                 (i) An incidental additive present in food at an insignificant
                level and that does not have any technical or functional effect in the
                food, as described in 21 CFR 101.100(a)(3).
                 (ii) [Reserved]
                 Bioengineered substance means substance that contains genetic
                material that has been modified through in vitro recombinant
                deoxyribonucleic acid (rDNA) techniques and for which the modification
                could not otherwise be obtained through conventional breeding or found
                in nature.
                 Compliance date means--
                 (1) Mandatory compliance date. Entities responsible for
                bioengineered food disclosure must comply with the requirements of this
                part by January 1, 2022.
                 (2) Updates to the List of Bioengineered Foods. When AMS updates
                the List of Bioengineered Foods pursuant to Sec. 66.7, entities
                responsible for bioengineered food disclosures must comply with the
                updates no later than 18 months after the effective date of the update.
                 Food means a food (as defined in section 201 of the Federal Food,
                Drug, and Cosmetic Act (21 U.S.C. 321)) that is intended for human
                consumption.
                 Food manufacturer means an entity that manufactures, processes, or
                packs human food and labels the food or food product for U.S. retail
                sale.
                 Importer means the importer of record, as determined by U.S.
                Customs and Border Protection (19 U.S.C. 1484(a)(2)(B)), who engages in
                the importation of food or food products labeled for retail sale into
                the United States.
                 Information panel means that part of the label of a packaged
                product that is immediately contiguous to and to the right of the
                principal display panel as observed by an individual facing the
                principal display panel, unless another section of the label is
                designated as the information panel because of package size or other
                package attributes (e.g. irregular shape with one usable surface).
                 Label means a display of written, printed, or graphic matter upon
                the immediate container or outside wrapper of any retail package or
                article that is easily legible on or through the outside container or
                wrapper.
                 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.
                 List of Bioengineered Foods means a list, maintained and updated by
                AMS and provided in Sec. 66.6, of foods for which bioengineered
                versions have been developed.
                 Marketing and promotional information means any written, printed,
                audiovisual, or graphic information, including advertising, pamphlets,
                flyers, catalogues, posters, and signs that are distributed, broadcast,
                or made available to assist in the sale or promotion of a product.
                 Predominance means an ingredient's position in the ingredient list
                on a product's label. Predominant ingredients are those most abundant
                by weight in the product, as required under 21 CFR 101.4(a)(1).
                [[Page 65872]]
                 Principal display panel means that part of a label that is most
                likely to be displayed, presented, shown, or examined under customary
                conditions of display for retail sale.
                 Processed food means any food other than a raw agricultural
                commodity, and includes any raw agricultural commodity that has been
                subject to processing, such as canning, cooking, freezing, dehydration,
                or milling.
                 Raw agricultural commodity means any agricultural commodity in its
                raw or natural state, including all fruits that are washed, colored, or
                otherwise treated in their unpeeled natural form prior to marketing.
                 Regulated entity means the food manufacturer, importer, or retailer
                that is responsible for making bioengineered food disclosures under
                Sec. 66.100(a).
                 Secretary means the United States Secretary of Agriculture or a
                representative to whom authority has been delegated to act in the
                Secretary's stead.
                 Similar retail food establishment means a cafeteria, lunch room,
                food stand, food truck, transportation carrier (such as a train or
                airplane), saloon, tavern, bar, lounge, other similar establishment
                operated as an enterprise engaged in the business of selling prepared
                food to the public, or salad bars, delicatessens, and other food
                enterprises located within retail establishments that provide ready-to-
                eat foods that are consumed either on or outside of the retailer's
                premises.
                 Small food manufacturer means any food manufacturer with annual
                receipts of at least $2,500,000, but less than $10,000,000.
                 Small package means food packages that have a total surface area of
                less than 40 square inches.
                 Very small food manufacturer means any food manufacturer with
                annual receipts of less than $2,500,000.
                 Very small package means food packages that have a total surface
                area of less than 12 square inches.
                Sec. 66.3 Disclosure requirement and applicability.
                 (a) General. (1) A label for a bioengineered food must bear a
                disclosure indicating that the food is a bioengineered food or contains
                a bioengineered food ingredient consistent with this part.
                 (2) Except as provided in Sec. 66.116 for voluntary disclosure, a
                label shall not bear a disclosure that a food is a bioengineered food
                or contains a bioengineered food ingredient if the records maintained
                in accordance with Sec. 66.302 demonstrate that the food is not a
                bioengineered food or does not contain a bioengineered food ingredient.
                 (b) Application to food. This part applies only to a food subject
                to:
                 (1) The labeling requirements under the Federal Food, Drug, and
                Cosmetic Act (``FDCA''); or
                 (2) The labeling requirements under the Federal Meat Inspection
                Act, the Poultry Products Inspection Act, or the Egg Products
                Inspection Act only if:
                 (i) The most predominant ingredient of the food would independently
                be subject to the labeling requirements under the FDCA; or
                 (ii) The most predominant ingredient of the food is broth, stock,
                water, or a similar solution and the second-most predominant ingredient
                of the food would independently be subject to the labeling requirements
                under the FDCA.
                Sec. 66.5 Exemptions.
                 This part shall not apply to the food and entities described in
                this section.
                 (a) Food served in a restaurant or similar retail food
                establishment.
                 (b) Very small food manufacturers.
                 (c) A food in which no ingredient intentionally contains a
                bioengineered (BE) substance, with an allowance for inadvertent or
                technically unavoidable BE presence of up to five percent (5%) for each
                ingredient.
                 (d) A food derived from an animal shall not be considered a
                bioengineered food solely because the animal consumed feed produced
                from, containing, or consisting of a bioengineered substance.
                 (e) Food certified under the National Organic Program.
                Sec. 66.6 List of Bioengineered Foods.
                 The List of Bioengineered Foods consists of the following: Alfalfa,
                apple (Arctic\TM\ varieties), canola, corn, cotton, eggplant (BARI Bt
                Begun varieties), papaya (ringspot virus-resistant varieties),
                pineapple (pink flesh varieties), potato, salmon
                (AquAdvantage[supreg]), soybean, squash (summer), and sugarbeet.
                Sec. 66.7 Updates to the List of Bioengineered Foods.
                 (a) Updates to the List. AMS will review and consider updates to
                the List on an annual basis and will solicit recommendations regarding
                updates to the List through notification in the Federal Register and on
                the AMS website.
                 (1) Recommendations regarding additions to and subtractions from
                the List may be submitted to AMS at any time or as part of the annual
                review process.
                 (2) Recommendations should be accompanied by data and other
                information to support the recommended action.
                 (3) AMS will post public recommendations on its website, along with
                information about other revisions to the List that the agency may be
                considering, including input based on consultation with the government
                agencies responsible for oversight of the products of biotechnology:
                USDA's Animal and Plant Health Inspection Service (USDA-APHIS), the
                U.S. Environmental Protection Agency (EPA), and the Department of
                Health and Human Services' Food and Drug Administration (FDA), and
                appropriate members of the Coordinated Framework for the Regulation of
                Biotechnology or a similar successor.
                 (4) AMS will consider whether foods proposed for inclusion on the
                List have been authorized for commercial production somewhere in the
                world, and whether the food is currently in legal commercial production
                for human food somewhere in the world.
                 (5) If AMS determines that an update to the List is appropriate
                following its review of all relevant information provided, AMS will
                modify the List.
                 (b) Compliance period. Regulated entities will have 18 months
                following the effective date of the updated List of Bioengineered Foods
                to revise food labels to reflect changes to the List in accordance with
                the disclosure requirements of this part.
                Sec. 66.9 Detectability.
                 (a) Recordkeeping requirements. Modified genetic material is not
                detectable if, pursuant to the recordkeeping requirements of Sec.
                66.302, the entity responsible for making a BE food disclosure
                maintains:
                 (1) Records to verify that the food is sourced from a non-
                bioengineered crop or source; or
                 (2) Records to verify that the food has been subjected to a
                refinement process validated to make the modified genetic material in
                the food undetectable; or
                 (3) Certificates of analysis or other records of testing
                appropriate to the specific food that confirm the absence of modified
                genetic material.
                 (b) Validated refining process. (1) Analytical testing that meets
                the standards described in paragraph (c) of this section must be used
                to validate that a refining process renders modified genetic material
                in a food undetectable.
                 (2) Once a refining process has been so validated, additional
                testing is not necessary to confirm the absence of detectable modified
                genetic material in food subsequently refined through that process,
                provided that no significant changes are made to the validated
                [[Page 65873]]
                process and provided that records are maintained to demonstrate that
                the refining process has been validated and that the validated refining
                process is followed.
                 (c) Standards of performance for detectability testing. Analytical
                testing for purposes of detecting the presence of modified genetic
                material in refined foods pursuant to paragraph (a) of this section
                shall meet the following standard:
                 (1) Laboratory quality assurance must ensure the validity and
                reliability of test results;
                 (2) Analytical method selection, validation, and verification must
                ensure that the testing method used is appropriate (fit for purpose)
                and that the laboratory can successfully perform the testing;
                 (3) The demonstration of testing validity must ensure consistent
                accurate analytical performance; and
                 (4) Method performance specifications must ensure analytical tests
                are sufficiently sensitive for the purposes of the detectability
                requirements of this part.
                Sec. 66.11 Severability.
                 If any provision of this part is declared invalid or the
                applicability thereof to any person or circumstances is held invalid,
                the validity of the remainder of this part or the applicability thereof
                to other persons or circumstances shall not be affected thereby.
                Sec. 66.13 Implementation and compliance.
                 (a) Implementation. Except for small food manufacturers, the
                implementation date for this part is January 1, 2020. For small food
                manufacturers, the implementation date is January 11, 2021.
                (b) Voluntary compliance. (1) Regulated entities may voluntarily
                comply with the requirements in this part until December 31, 2021.
                 (2) During this period, regulated entities may use labels that meet
                requirements of preempted State labeling regulations for genetically
                engineered food. Stickers or ink stamps may be applied to existing
                labels to provide appropriate bioengineered food disclosures provided
                that the stickers or ink stamps do not obscure other required label
                information.
                 (c) Mandatory compliance. All regulated entities must comply with
                the requirements of this part beginning on January 1, 2022.
                Subpart B--Bioengineered Food Disclosure
                Sec. 66.100 General.
                 (a) Responsibility for disclosure. (1) For a food that is packaged
                prior to receipt by a retailer, the food manufacturer or importer is
                responsible for ensuring that the food label bears a bioengineered food
                disclosure in accordance with this part.
                 (2) If a retailer packages a food or sells a food in bulk, that
                retailer is responsible for ensuring that the food bears a
                bioengineered food disclosure in accordance with this part.
                 (b) Type of disclosure. If a food must bear a bioengineered food
                disclosure under this part, the disclosure must be in one of the forms
                described in this paragraph (b), except as provided in Sec. Sec.
                66.110 and 66.112.
                 (1) A text disclosure in accordance with Sec. 66.102.
                 (2) A symbol disclosure in accordance with Sec. 66.104.
                 (3) An electronic or digital link disclosure in accordance with
                Sec. 66.106.
                 (4) A text message disclosure in accordance with Sec. 66.108.
                 (c) Appearance of disclosure. The required disclosure must be of
                sufficient size and clarity to appear prominently and conspicuously on
                the label, making it likely to be read and understood by the consumer
                under ordinary shopping conditions.
                 (d) Placement of the disclosure. Except as provided in Sec. 66.114
                for bulk food, the disclosure must be placed on the label in one of the
                manners described in this paragraph (d).
                 (1) The disclosure is placed in the information panel directly
                adjacent to the statement identifying the name and location of the
                handler, distributor, packer, manufacturer, importer, or any statement
                disclosing similar information.
                 (2) The disclosure is placed in the principal display panel.
                 (3) The disclosure is placed in an alternate panel likely to be
                seen by a consumer under ordinary shopping conditions if there is
                insufficient space to place the disclosure on the information panel or
                the principal display panel.
                 (e) Uniform Resource Locator (URL). Except for disclosures made by
                small manufacturers and for disclosures on very small packages, a
                bioengineered food disclosure may not include an internet website URL
                that is not embedded in an electronic or digital link.
                Sec. 66.102 Text disclosure.
                 A text disclosure must bear the text as described in this section.
                A text disclosure may use a plural form if applicable, e.g. if a food
                product includes more than one bioengineered food, then ``bioengineered
                foods'' or ``bioengineered food ingredients'' may be used.
                 (a) Bioengineered foods. If a food (including any ingredient
                produced from such food) is on the List of Bioengineered Foods, and
                records maintained by a regulated entity demonstrate that the food is
                bioengineered, the text disclosure must be one of the following, as
                applicable:
                 (1) ``Bioengineered food'' for bioengineered food that is a raw
                agricultural commodity or processed food that contains only
                bioengineered food ingredients; or
                 (2) ``Contains a bioengineered food ingredient'' for multi-
                ingredient food that is not described in paragraph (a)(1) of this
                section but contains one or more bioengineered food ingredients.
                 (b) Predominant language in U.S. Food subject to disclosure that is
                distributed solely in a U.S. territory may be labeled with statements
                equivalent to those required in this part, using the predominant
                language used in that territory.
                Sec. 66.104 Symbol disclosure.
                 A symbol disclosure must replicate the form and design of Figure 1
                to this section.
                 (a) The symbol is a circle with a green circumference, and a white
                outer band. The bottom portion of the circle contains an arch, filled
                in green to the bottom of the circle. The arch contains two light green
                terrace lines, sloping downward from left to right. On the left side of
                the arch is a stem arching towards the center of the circle, ending in
                a four-pointed starburst. The stem contains two leaves originating on
                the upper side of the stem and pointing towards the top of the circle.
                In the background of the leaves, at the top of the circle and to the
                left of center, is approximately one-half of a circle filled in yellow.
                The remainder of the circle is filled in light blue. The symbol must
                contain the words ``BIOENGINEERED.''
                 (b) If a food (including any ingredient produced from such food) is
                on the List of Bioengineered Foods, and records maintained by a
                regulated entity demonstrate that the food is bioengineered, or do not
                demonstrate whether the food is bioengineered, the symbol disclosure
                must be the following:
                [[Page 65874]]
                [GRAPHIC] [TIFF OMITTED] TR21DE18.000
                 (c) The symbol may be printed in black and white.
                 (d) Nothing can be added to or removed from the bioengineered food
                symbol design except as allowed in this part.
                Sec. 66.106 Electronic or digital link disclosure.
                 If a required bioengineered food disclosure is made through an
                electronic or digital link printed on the label, the disclosure must
                comply with the requirements described in this section.
                 (a) Accompanying statement. (1) An electronic or digital disclosure
                must be accompanied by, and be placed directly above or below, this
                statement: ``Scan here for more food information'' or equivalent
                language that only reflects technological changes (e.g., ``Scan
                anywhere on package for more food information'' or ``Scan icon for more
                food information'').
                 (2) The electronic or digital disclosure must also be accompanied
                by a telephone number that will provide the bioengineered food
                disclosure to the consumer, regardless of the time of day. The
                telephone number instructions must be in close proximity to the digital
                link and the accompanying statement described in paragraph (a)(1) of
                this section, must indicate that calling the telephone number will
                provide more food information, and must be accompanied by the statement
                ``Call [1-000-000-0000] for more food information.''
                 (b) Product information page. When the electronic or digital link
                is accessed, the link must go directly to the product information page
                for display on the electronic or digital device. The product
                information page must comply with the requirements described in this
                paragraph (b).
                 (1) The product information page must be the first screen to appear
                on an electronic or digital device after the link is accessed as
                directed.
                 (2) The product information page must include a bioengineered food
                disclosure that is consistent with Sec. 66.102 or Sec. 66.104.
                 (3) The product information page must exclude marketing and
                promotional information.
                 (4) The electronic or digital link disclosure may not collect,
                analyze, or sell any personally identifiable information about
                consumers or the devices of consumers; however, if this information
                must be collected to carry out the purposes of this part, the
                information must be deleted immediately and not used for any other
                purpose.
                Sec. 66.108 Text message disclosure.
                 The regulated entity must not charge a person any fee to access the
                bioengineered food information through text message and must comply
                with the requirements described in this section.
                 (a) The label must include this statement ``Text [command word] to
                [number] for bioengineered food information.'' The number must be a
                number, including a short code, that sends an immediate response to the
                consumer's mobile device.
                 (b) The response must be a one-time response and the only
                information in the response must be the appropriate bioengineered food
                disclosure described in Sec. 66.102 or Sec. 66.116.
                 (c) The response must exclude marketing and promotional
                information.
                 (d) A regulated entity that selects the text message option must
                comply with the requirements of this paragraph (d).
                 (1) The regulated entity must not collect, analyze, or sell any
                personally identifiable information about consumers or the devices of
                consumers.
                 (2) The regulated entity must not use any information related to
                the text message option for any marketing purposes.
                 (3) If any information must be collected to carry out the purposes
                of this part, the information must be deleted as soon as possible and
                not be used for any other purpose.
                Sec. 66.109 Required disclosure with actual knowledge.
                 Notwithstanding any provision in this subpart, if a food
                manufacturer (other than a very small food manufacturer), a retailer,
                or an importer has actual knowledge that the food is a bioengineered
                food or contains a bioengineered food ingredient, it must disclose that
                the food is bioengineered or contains a bioengineered food ingredient,
                as applicable, using appropriate text, symbol, electronic or digital
                link disclosure, or text message.
                Sec. 66.110 Small food manufacturers.
                 A small food manufacturer must make the required bioengineered food
                disclosure using one of the bioengineered food disclosure options
                permitted under Sec. Sec. 66.102, 66.104, 66.106, and 66.108 or as
                described in this section.
                 (a) The label bears the statement: ``Call for more food
                information,'' which accompanies a telephone number that will provide
                the bioengineered food disclosure to the consumer, regardless of the
                time of day. Disclosure via telephone number must include a
                bioengineered food disclosure that is consistent with Sec. 66.102 in
                audio form and may be pre-recorded.
                 (b) The label bears the statement: ``Visit [URL of the website] for
                more food information,'' which accompanies a website that meets the
                requirements of Sec. 66.106(b). Disclosure via website must include a
                bioengineered food disclosure that is consistent with Sec. 66.102 or
                Sec. 66.104 in written form.
                Sec. 66.112 Small and very small packages.
                 In addition to the disclosures described in this subpart, for food
                in small and very small packages, the required disclosure may be in the
                form described in paragraph (a), (b), or (c) of this section.
                 (a) The label bears the electronic or digital disclosure described
                in Sec. 66.106, and replaces the statement and phone number required
                in Sec. 66.106(a) with the statement ``Scan for info.''
                 (b) The label bears a number or short code as described in Sec.
                66.108(a), and replaces the statement with ``Text for info.''
                 (c) The label bears a phone number as described in Sec. 66.110(a),
                and replaces the statement with ``Call for info.''
                 (d) For very small packages only, if the label includes a
                preexisting Uniform Resource Locator for a website or a telephone
                number that a consumer can use to obtain food information, that website
                or telephone number may also be used for the required bioengineered
                food disclosure, provided that the disclosure is consistent with Sec.
                66.102 or Sec. 66.104 in written or audio form, as applicable.
                Sec. 66.114 Food sold in bulk containers.
                 (a) Bioengineered food sold in bulk containers (e.g., display case,
                bin, carton, and barrel), used at the retail level to present product
                to consumers, including a display at a fresh seafood counter, must use
                one of the disclosure options described in Sec. 66.102, Sec. 66.104,
                Sec. 66.106, or Sec. 66.108.
                 (b) The disclosure must appear on signage or other materials (e.g.,
                placard, sign, label, sticker, band, twist tie, or other similar
                format) that allows consumers to easily identify and understand the
                bioengineered status of the food.
                Sec. 66.116 Voluntary disclosure.
                 (a) Disclosure of bioengineered food by exempt entities. If a food
                on the List of Bioengineered Foods is subject to
                [[Page 65875]]
                disclosure, a very small food manufacturer, restaurant, or similar
                retail food establishment may voluntarily provide that disclosure. The
                disclosure must be in one or more of the forms described in this
                paragraph (a).
                 (1) A text disclosure, in accordance with Sec. 66.102.
                 (2) A symbol disclosure, in accordance with Sec. 66.104.
                 (3) An electronic or digital link disclosure, in accordance with
                Sec. 66.106.
                 (4) A text message disclosure, in accordance with Sec. 66.108.
                 (5) Appropriate small manufacturer and small and very small package
                disclosure options, in accordance with Sec. Sec. 66.110 and 66.112.
                 (b) Disclosure of foods derived from bioengineering. For foods or
                food ingredients that do not meet paragraph (1) of the definition of
                bioengineered food in Sec. 66.1, that do not qualify as a factor or
                condition under paragraph (2) of the definition of bioengineered food
                in Sec. 66.1, that are not exempt from disclosure under Sec. 66.5,
                and that are derived from a food on the List of Bioengineered Foods,
                regulated entities may disclose such foods with one of the disclosures
                described in this paragraph (b).
                 (1) A text disclosure with the following statement: ``derived from
                bioengineering'' or ``ingredient(s) derived from a bioengineered
                source.'' The word ``ingredient(s)'' may be replaced with the name of
                the specific crop(s) or food ingredient(s).
                 (2) A symbol disclosure using the following symbol:
                 [GRAPHIC] [TIFF OMITTED] TR21DE18.001
                
                 (3) An electronic or digital link disclosure, in accordance with
                Sec. 66.106, provided that the disclosure is the text described in
                paragraph (b)(1) of this section or the symbol in Figure 1 to this
                section.
                 (4) A text message disclosure, in accordance with Sec. 66.108,
                provided that the response is the text described in paragraph (b)(1) of
                this section or the symbol in Figure 1 to this section.
                 (5) Appropriate small manufacturer and small and very small package
                disclosure options, in accordance with Sec. Sec. 66.110 and 66.112,
                provided that the disclosure is the text described in paragraph (b)(1)
                of this section or the symbol in Figure 1 to this section.
                 (c) Appearance of disclosure. The disclosure should be of
                sufficient size and clarity to appear prominently and conspicuously on
                the label, making it likely to be read and understood by the consumer
                under ordinary shopping conditions.
                 (d) Recordkeeping. Reasonable and customary records should be
                maintained to verify disclosures made under this section, in accordance
                with Sec. 66.302.
                Sec. 66.118 Other claims.
                 Nothing in this subpart will prohibit regulated entities from
                making other claims regarding bioengineered foods, provided that such
                claims are consistent with applicable Federal law.
                Subpart C--Other Factors and Conditions for Bioengineered Food
                Sec. 66.200 Request or petition for determination.
                 (a) Any person may submit a request or petition for a determination
                by the Administrator regarding other factors and conditions under which
                a food is considered a bioengineered food. A request or petition must
                be submitted in accordance with Sec. 66.204.
                 (b) The request or petition may be supplemented, amended, or
                withdrawn in writing at any time without prior approval of the
                Administrator, and without affecting resubmission, except when the
                Administrator has responded to the request or petition.
                 (c) If the Administrator determines that the request or petition
                satisfies the standards for consideration in Sec. 66.202, AMS will
                initiate a rulemaking that would amend the definition of
                ``bioengineered food'' in Sec. 66.1 to include the requested factor or
                condition.
                 (d) The Administrator's determination that the request or petition
                does not satisfy the standards for consideration in Sec. 66.202
                constitutes final agency action for purposes of judicial review.
                Sec. 66.202 Standards for consideration.
                 In evaluating a request or petition, the Administrator must apply
                the applicable standards described in this section.
                 (a) The requested factor or condition is within the scope of the
                definition of ``bioengineering'' in 7 U.S.C. 1639(1).
                 (b) The Administrator must evaluate the difficulty and cost of
                implementation and compliance related to the requested factor or
                condition.
                 (c) The Administrator may consider other relevant information,
                including whether the requested factor or condition is compatible with
                the food labeling requirements of other agencies or countries, as part
                of the evaluation.
                Sec. 66.204 Submission of request or petition.
                 (a) Submission procedures and format. A person must submit the
                request to the Agricultural Marketing Service in the form and manner
                established by AMS.
                 (b) Required information. The request or petition must include the
                information described in this paragraph (b).
                 (1) Description of the requested factor or condition.
                 (2) Analysis of why the requested factor or condition should be
                included in considering whether a food is a bioengineered food,
                including any relevant information, publications, and/or data. The
                analysis should include how the Administrator should apply the
                standards for consideration in Sec. 66.202.
                 (3) If the request or petition contains Confidential Business
                Information (CBI), the submission must comply with the requirements of
                this paragraph (b)(3).
                 (i) The requester or petitioner must submit one copy that is marked
                as ``CBI Copy'' on the first page and on each page containing CBI.
                 (ii) The requester or petitioner must submit a second copy with the
                CBI deleted. This copy must be marked as ``CBI Redacted'' on the first
                page and on each page where the CBI was deleted.
                 (iii) The submission must include an explanation as to why the
                redacted information is CBI.
                Subpart D--Recordkeeping
                Sec. 66.300 Scope.
                 This subpart applies to records regarding mandatory and voluntary
                disclosures under this part for foods offered for retail sale in the
                United States.
                Sec. 66.302 Recordkeeping requirements.
                 (a) General. (1) Regulated entities must maintain records that are
                customary or reasonable to demonstrate compliance with the disclosure
                requirements of this part.
                 (2) The records must be in electronic or paper formats and must
                contain sufficient detail as to be readily understood and audited by
                AMS.
                 (3) Records must be maintained for at least two years beyond the
                date the food or food product is sold or distributed for retail sale.
                 (4) Examples of customary or reasonable records that could be used
                to demonstrate compliance with the disclosure requirements of this part
                include, but are not limited to: Supply chain records, bills of lading,
                invoices, supplier attestations, labels, contracts,
                [[Page 65876]]
                brokers' statements, third party certifications, laboratory testing
                results, validated process verifications, and other records generated
                or maintained by the regulated entity in the normal course of business.
                 (b) Recordkeeping requirements. (1) If a food (including an
                ingredient produced from such food) is on the List of Bioengineered
                Foods, the regulated entity must maintain records regarding that food
                or food ingredient.
                 (2) If a food (including an ingredient produced from such food)
                bears a bioengineered food disclosure based on actual knowledge and is
                not on the List of Bioengineered Foods, regulated entities must
                maintain records for such food or food ingredient.
                Sec. 66.304 Access to records.
                 (a) Request for records. When AMS makes a request for records, the
                entity must provide the records to AMS within five (5) business days,
                unless AMS extends the deadline.
                 (b) On-site access. If AMS needs to access the records at the
                entity's place of business, AMS will provide prior notice of at least
                three (3) business days. AMS will examine the records during normal
                business hours, and the records will be made available during those
                times. Access to any necessary facilities for an examination of the
                records must be extended to AMS.
                 (c) Failure to provide access. If the entity fails to provide
                access to the records as required under this section, the result of the
                audit or examination of records will be that the entity did not comply
                with the requirement to provide access to records and that AMS could
                not confirm whether the entity is in compliance with the bioengineered
                food disclosure standard for purposes of Sec. 66.402.
                Subpart E--Enforcement
                Sec. 66.400 Prohibited act.
                 It is a violation of 7 U.S.C. 1639b for any person to knowingly
                fail to make a bioengineered food disclosure in accordance with this
                part.
                Sec. 66.402 Audit or examination of records.
                 (a) Any interested person who has knowledge of or information
                regarding a possible violation of this part may file a written
                statement or complaint with the Administrator.
                 (1) Written statements or complaints filed with the Administrator
                must include the following:
                 (i) Complete identifying information about the product in question;
                 (ii) A detailed explanation of the alleged regulatory violation;
                and
                 (iii) Name and contact information of the person filing the
                statement or complaint.
                 (2) Written statements or complaints should be addressed to
                Director, Food Disclosure and Labeling Division, AMS Fair Trade
                Practices Program, 1400 Independence Avenue SW, Washington, DC 20250;
                or submitted through the NBFDS Compliance Portal on the AMS website at
                https://www.ams.usda.gov/be.
                 (3) The Administrator will determine whether reasonable grounds
                exist for an investigation of such complaint.
                 (b) If the Administrator determines that further investigation of a
                complaint is warranted, an audit, examination, or similar activity may
                be conducted with respect to the records of the entity responsible for
                the disclosures.
                 (c) Notice regarding records audits or examinations or similar
                activities will be provided in accordance with Sec. 66.304(a) and (b).
                 (d) At the conclusion of the audit or examination of records or
                similar activity, AMS will make the findings available to the entity
                that was the subject of the investigation.
                 (e) If the entity that is the subject of the audit or examination
                of records or similar activity objects to any findings, it may request
                a hearing in accordance with Sec. 66.404.
                Sec. 66.404 Hearing.
                 (a) Within 30 days of receiving the results of an audit or
                examination of records or similar activity to which the entity that was
                the subject of the investigation objects, the entity may request a
                hearing by filing a request, along with the entity's response to the
                findings and any supporting documents, with AMS.
                 (b) The response to the findings of the audit or examination of
                records or similar activity must identify any objection to the findings
                and the basis for the objection.
                 (c) The AMS Administrator or designee will review the findings of
                the audit or examination of records or similar activity, the response,
                and any supporting documents, and may allow the entity that was the
                subject of the investigation to make an oral presentation.
                 (d) At the conclusion of the hearing, the AMS Administrator or
                designee may revise the findings of the audit or examination of records
                or similar activity.
                Sec. 66.406 Summary of results.
                 (a) If the entity that was the subject of the audit or examination
                of records or similar activity does not request a hearing in accordance
                with Sec. 66.404, or at the conclusion of a hearing, AMS will make
                public the summary of the final results of the investigation.
                 (b) AMS's decision to make public the summary of the final results
                constitutes final agency action for purposes of judicial review.
                 Dated: December 12, 2018.
                Erin Morris,
                Associate Administrator.
                [FR Doc. 2018-27283 Filed 12-20-18; 8:45 am]
                BILLING CODE P
                

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