(a) Definitions

(1) Appropriate State agency
The term "appropriate State agency" means a State agency described in section 454(a)(1) of this title.

(2) Designated personnel
The term "designated personnel" means inspection personnel of a State agency that have undergone all necessary inspection training and certification to assist the Secretary in the administration and enforcement of this chapter, including rules and regulations issued under this chapter.

(3) Eligible establishment
The term "eligible establishment" means an establishment that is in compliance with—

(A) the State inspection program of the State in which the establishment is located; and

(B) this chapter, including rules and regulations issued under this chapter.

(4) Poultry item
The term "poultry item" means—

(A) a portion of poultry; and

(B) a poultry product.

(5) Selected establishment
The term "selected establishment" means an eligible establishment that is selected by the Secretary, in coordination with the appropriate State agency of the State in which the eligible establishment is located, under subsection (b) to ship poultry items in interstate commerce.

(b) Authority of Secretary to allow shipments

(1) In general
Subject to paragraph (2), the Secretary, in coordination with the appropriate State agency of the State in which an establishment is located, may select the establishment to ship poultry items in interstate commerce, and place on each poultry item shipped in interstate commerce a Federal mark, stamp, tag, or label of inspection, if—

(A) the poultry item qualifies for the Federal mark, stamp, tag, or label of inspection under the requirements of this chapter;

(B) the establishment is an eligible establishment; and

(C) inspection services for the establishment are provided by designated personnel.

(2) Prohibited establishments
In carrying out paragraph (1), the Secretary, in coordination with an appropriate State agency, shall not select an establishment that—

(A) on average, employs more than 25 employees (including supervisory and nonsupervisory employees), as defined by the Secretary;

(B) as of the date of the enactment of this section, ships in interstate commerce carcasses, portions of carcasses, or poultry items that are inspected by the Secretary in accordance with this chapter;

(C)

(i) is a Federal establishment;

(ii) was a Federal establishment as of the date of the enactment of this section, and was reorganized on a later date under the same name or a different name or person by the person, firm, or corporation that controlled the establishment as of the date of the enactment of this section; or

(iii) was a State establishment as of the date of the enactment of this section that—

(I) as of the date of the enactment of this section, employed more than 25 employees; and

(II) was reorganized on a later date by the person, firm, or corporation that controlled the establishment as of the date of the enactment of this section;

(D) is in violation of this chapter;

(E) is located in a State that does not have a State inspection program; or

(F) is the subject of a transition carried out in accordance with a procedure developed by the Secretary under paragraph (3)(A).

(3) Establishments that employ more than 25 employees

(A) Development of procedure
The Secretary may develop a procedure to transition to a Federal establishment any establishment under this section that, on average, consistently employs more than 25 employees.

(B) Eligibility of certain establishments

(i) In general
A State establishment that employs more than 25 employees but less than 35 employees as of the date of the enactment of this section may be selected as a selected establishment under this subsection.

(ii) Procedures
A State establishment shall be subject to the procedures established under subparagraph (A) beginning on the date that is 3 years after the effective date described in subsection (i).

(c) Reimbursement of State costs
The Secretary shall reimburse a State for costs related to the inspection of selected establishments in the State in accordance with Federal requirements in an amount of not less than 60 percent of eligible State costs.

(d) Coordination between Federal and State agencies

(1) In general
The Secretary shall designate an employee of the Federal Government as State coordinator for each appropriate State agency—

(A) to provide oversight and enforcement of this section; and

(B) to oversee the training and inspection activities of designated personnel of the State agency.

(2) Supervision
A State coordinator shall be under the direct supervision of the Secretary.

(3) Duties of State coordinator

(A) In general
A State coordinator shall visit selected establishments with a frequency that is appropriate to ensure that selected establishments are operating in a manner that is consistent with this chapter (including regulations and policies under this chapter).

(B) Quarterly reports
A State coordinator shall, on a quarterly basis, submit to the Secretary a report that describes the status of each selected establishment that is under the jurisdiction of the State coordinator with respect to the level of compliance of each selected establishment with the requirements of this chapter.

(C) Immediate notification requirement
If a State coordinator determines that any selected establishment that is under the jurisdiction of the State coordinator is in violation of any requirement of this chapter, the State coordinator shall—

(i) immediately notify the Secretary of the violation; and

(ii) deselect the selected establishment or suspend inspection at the selected establishment.

(4) Performance evaluations
Performance evaluations of State coordinators designated under this subsection shall be conducted by the Secretary as part of the Federal agency management control system.

(e) Audits

(1) Periodic audits conducted by Inspector General of the Department of Agriculture
Not later than 2 years after the effective date described in subsection (i), and not less often than every 3 years thereafter, the Inspector General of the Department of Agriculture shall conduct an audit of each activity taken by the Secretary under this section for the period covered by the audit to determine compliance with this section.

(2) Audit conducted by Comptroller General of the United States
Not earlier than 3 years, nor later than 5 years, after the date of the enactment of this section, the Comptroller General of the United States shall conduct an audit of the implementation of this section to determine—

(A) the effectiveness of the implementation of this section; and

(B) the number of selected establishments selected by the Secretary to ship poultry items under this section.

(f) Transition grants
The Secretary may provide grants to appropriate State agencies to assist the appropriate State agencies in helping establishments covered by this chapter to transition to selected establishments.

(g) Violations
Any selected establishment that the Secretary determines to be in violation of any requirement of this chapter shall be transitioned to a Federal establishment in accordance with a procedure developed by the Secretary under subsection (b)(3)(A).

(h) Effect
Nothing in this section limits the jurisdiction of the Secretary with respect to the regulation of poultry and poultry products under this chapter.

(i) Effective date

(1) In general
This section takes effect on the date on which the Secretary, after providing a period of public comment (including through the conduct of public meetings or hearings), promulgates final regulations to carry out this section.

(2) Requirement
Not later than 18 months after the date of the enactment of this section, the Secretary shall promulgate final regulations in accordance with paragraph (1).