[Federal Register Volume 63, Number 173 (Tuesday, September 8, 1998)]
[Rules and Regulations]
[Pages 47419-47423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24016]



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  Federal Register / Vol. 63, No. 173 / Tuesday, September 8, 1998 / 
Rules and Regulations  

[[Page 47419]]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 51

[Docket No. 98-016-2]


Brucellosis; Increased Indemnity for Cattle and Bison

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are adopting as a final rule, with two changes, an interim 
rule that amended the regulations governing Federal indemnity paid 
under the brucellosis eradication program to increase the amount of 
indemnity that may be paid for certain cattle and bison destroyed 
because of brucellosis. The interim rule described two indemnity 
methods--an appraisal method and a fixed-rate method--from which owners 
of certain animals approved for destruction may choose. As amended by 
this document, the rule now allows owners to receive Federal indemnity 
for unweaned, neutered calves in herds approved for depopulation, and 
the fixed-rate indemnity method now accounts for the higher value of 
registered beef cattle and dairy cattle compared to nonregistered beef 
cattle and bison. This action will provide sufficient financial 
incentive for cattle and bison owners to depopulate brucellosis-
affected herds. The continued existence of these herds increases the 
risk of disease spread and prolongs the eradication process.

EFFECTIVE DATE: September 8, 1998.

FOR FURTHER INFORMATION CONTACT: Dr. Valerie Ragan, Senior Staff 
Veterinarian, National Animal Health Programs Staff, VS, APHIS, 4700 
River Road Unit 36, Riverdale, MD 20737-1231, (301) 734-3754.

SUPPLEMENTARY INFORMATION:

Background

    The regulations in part 78 of title 9 of the Code of Federal 
Regulations (CFR) govern the interstate movement of cattle, bison, and 
swine to help prevent the interstate spread of brucellosis, a 
contagious disease affecting animals and humans caused by bacteria of 
the genus Brucella. In humans, brucellosis initially causes flulike 
symptoms, but the disease may develop into a number of chronic 
conditions, such as arthritis. In cattle and bison, brucellosis causes, 
among other things, decreased milk production and loss of young through 
abortion or birth of weak calves. Humans can be treated for brucellosis 
with antibiotics; there is no feasible means of curing brucellosis in 
food animals.
    The regulations in part 78 are part of a cooperative Federal and 
State program, administered by the Animal and Plant Health Inspection 
Service (APHIS), U.S. Department of Agriculture (USDA), to eradicate 
brucellosis from the United States. Program officials are striving to 
eradicate the field strain of Brucella abortus from domestic cattle and 
bison herds by the end of December 1998. Among other things, the 
regulations in part 78 provide a system for classifying States or 
portions of States (areas) according to the rate of B. abortus 
infection present and the general effectiveness of the brucellosis 
control and eradication program in the State or area. The 
classifications are Class Free, Class A, Class B, Class C, and 
quarantined States and areas, with Class Free States being those in 
which there has been no finding of brucellosis in cattle or bison for 
the 12 months preceding classification and quarantined States and areas 
being those States and areas with the highest rates of brucellosis. As 
of July 31, 1998, there were only 8 known affected cattle herds and 1 
known affected bison herd, and APHIS had declared 43 States, Puerto 
Rico, and the U.S. Virgin Islands free of the disease.
    Brucellosis is commonly transmitted to susceptible animals by 
direct contact with infected animals. The disease is also transmitted 
to susceptible animals in contact with an environment that has been 
contaminated by discharges from infected animals. Infected pregnant 
cows may discharge billions of Brucella bacteria at calving or 
abortion. Although it is not common, infected bulls can spread the 
disease to cows during breeding. Because brucellosis is transmitted by 
sexually intact animals, steers and spayed heifers do not pose a risk 
of transmitting brucellosis.
    The basic approach to brucellosis eradication in cattle and bison 
has been to test cattle and bison for infection and send sexually 
intact infected and exposed animals to slaughter. Brucellosis-exposed 
cattle and brucellosis-exposed bison have a high probability of 
contracting brucellosis, and may, in fact, be contagious before they 
react to an official test for brucellosis. Because the continued 
presence of brucellosis in a herd seriously threatens the health of 
animals in that herd and other herds, the prompt destruction of 
sexually intact brucellosis-affected cattle or bison is critical to the 
success of the eradication program.
    To encourage destruction of sexually intact cattle and bison that 
are infected with or that have been exposed to brucellosis, USDA pays 
Federal indemnity to owners of certain animals that are destroyed 
because of brucellosis. The regulations governing indemnification under 
the brucellosis eradication program are in 9 CFR part 51 (referred to 
below as the regulations). Without sufficient financial incentive to 
destroy exposed animals or depopulate affected herds, many owners 
prefer to quarantine exposed animals or, when the exposed animals in a 
herd cannot be isolated, the entire herd. Quarantining is a lengthy and 
expensive process for both the owner and USDA. USDA has to pay to have 
the quarantined herd tested periodically, until the herd is found to be 
free of brucellosis, and the owner may not sell or move any animals 
while they are under quarantine, except for slaughter, which provides 
less revenue than sales for breeding purposes.
    In an interim rule effective March 24, 1998, and published in the 
Federal Register on March 31, 1998 (63 FR 15281-15284, Docket No. 98-
016-1), we amended the regulations to provide additional financial 
incentive for owners to choose depopulation when USDA offers to pay 
indemnity for destruction of a herd. We amended Sec. 51.3, ``Payment to 
owners for animals destroyed,'' by changing the system of determining 
the indemnity to be paid for all cattle and bison destroyed under

[[Page 47420]]

the program, except for individual reactors and sexually intact exposed 
female calves that are not part of a whole-herd depopulation.
    As a result of the interim rule, the Administrator may authorize 
the payment of indemnity by USDA to any owner of the following animals 
destroyed under the brucellosis eradication program: (1) Cattle and 
bison identified as reactors as a result of a complete herd test and 
any sexually intact exposed female calves (defined in Sec. 51.1 as ``a 
female bovine less than 6 months of age that is nursed by a brucellosis 
reactor at the time such reactor is condemned, and that has not been 
altered to make it incapable of reproduction''), (2) cattle and bison 
in a herd that has been approved by APHIS for depopulation, and (3) 
brucellosis-exposed cattle and brucellosis-exposed bison that were 
previously sold or traded from any herd that has, subsequent to the 
sale or trade, been found to be affected with brucellosis.
    For individual cattle and bison identified as reactors on a 
complete herd test and for any sexually intact exposed female calves, 
the interim rule provided a fixed indemnity rate: $250 for any 
registered cattle and nonregistered dairy cattle and $50 for any bison, 
nonregistered cattle other than dairy cattle, or sexually intact 
exposed female calves. For cattle and bison herds that have been 
approved for depopulation and for brucellosis-exposed cattle and 
brucellosis-exposed bison that meet the conditions described above, the 
interim rule allowed owners to choose an appraisal method or a fixed-
rate method for determining the indemnity amounts. As specified in the 
interim rule, under the appraisal method, the indemnity is the 
appraised market value of the animal minus the salvage value, and under 
the fixed-rate method, the indemnity will not exceed $250 per animal. 
The method chosen must be used for all animals to be destroyed.
    According to the interim rule, owners have the option of having an 
appraisal of their animals done prior to choosing the method used. 
Appraisals are conducted by an independent appraiser selected by the 
APHIS Administrator, and the cost of the appraisals is borne by APHIS. 
In all cases, the amount of Federal indemnity is determined in 
accordance with the regulations that were in effect on the date that 
reactors were found or the date that depopulation or removal of 
individual exposed animals was approved. Prior to payment of indemnity, 
proof of destruction 1 must be furnished to the Veterinarian 
in Charge. The Administrator shall authorize the maximum per-head 
amount for animals approved for indemnity under the brucellosis 
eradication program unless: (1) Sufficient funds are not available, (2) 
the State or area in which the animal is located is under Federal 
quarantine, (3) the State does not request payment of Federal 
indemnity, or (4) the State requests a rate lower than the maximum.
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    \1\ The Veterinarian in Charge shall accept any of the following 
documents as proof of destruction: (a) A postmortem report; (b) a 
meat inspection certification of slaughter; (c) a written statement 
by a State representative, APHIS representative, or accredited 
veterinarian attesting to the destruction of the animal; (d) a 
written, sworn statement by the owner or caretaker of the animal 
attesting to the destruction of the animal; (e) a permit (VS Form 1-
27) consigning the animal from a farm or livestock market directly 
to a recognized slaughtering establishment; or (f) in unique 
situations where the documents listed above are not available, other 
similarly reliable forms of proof of destruction.
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    We solicited comments concerning the interim rule for 60 days 
ending June 1, 1998. We received 14 comments by that date. The comments 
were from cattle industry associations, State departments of 
agriculture, and veterinary associations. All of the commenters were in 
favor of the intent of the interim rule: Many stated that increased 
indemnification is important for the rapid completion of the 
brucellosis eradication program because some producers have been 
reluctant to depopulate their affected herds. However, all but one of 
the commenters requested changes to the provisions of the interim rule. 
The suggestions made in the comments are discussed in detail below.
    The comments primarily dealt with two concerns. The most prevalent 
suggestion was to allow cows and nursing calves in herds approved for 
depopulation to be appraised as a pair because these animals are 
generally worth more as a unit than as individuals.
    The second most prevalent suggestion was to allow indemnity to be 
paid for all unweaned calves in herds approved for depopulation and to 
exempt any neutered calves from ``B'' branding and slaughter 
requirements. (Currently, the regulations allow for indemnity to be 
paid for sexually intact calves of both sexes but not for spayed 
heifers or steers, with the exception of work oxen, because neutered 
animals do not present a threat of spreading brucellosis. However, a 
common herd-management practice involves neutering nursing calves, 
especially the males. Owners of herds approved for depopulation are 
reluctant to slaughter cows with nursing calves that have been neutered 
because these calves are not eligible for indemnity and feeding 
unweaned calves is a labor-intensive and frequently unsuccessful 
undertaking.) The commenters expressed concern that owners of herds 
approved for depopulation may either delay depopulation until the 
neutered calves can be weaned (generally at about 6 months of age) or 
opt to test the herd with removal of reactors until the herd qualifies 
for release from quarantine. In either case, the herd remains as a 
potential source of disease transmission for an extended period of 
time. Several commenters stated that herd owners whose management 
practices include neutering of calves are ``seriously disadvantaged'' 
by the provisions in the interim rule.
    One commenter stated that it is important to pay adequate indemnity 
to the owners of cows with nursing bull calves. The commenter stated 
that 4 to 6 months after weaning, the nursing bull calf becomes a 
valuable steer worth approximately $500. Without being offered adequate 
indemnity, owners of exposed cows with nursing bull calves may resist 
depopulation. The commenter further stated that either ``an indemnity 
option to encourage such owners to depopulate should be provided'' or 
the Federal fixed indemnity should be increased by $100 and the States 
should be permitted to apply State indemnity funds to address this 
issue.
    One commenter suggested several other changes to the regulations. 
(1) State clearly that bull calves are eligible for indemnity. These 
calves would include weaned and unweaned bull calves that are to be 
used for breeding and unweaned bull calves that are not to be used for 
breeding. (2) Require destruction of all sexually intact males and 
females for which indemnity is paid. However, bull calves under 18 
months of age for which indemnity is paid could be castrated and not 
destroyed and exempted from reactor tagging and ``B'' branding 
requirements. (3) For the purpose of herd depopulation, define a 
``steer'' as a castrated male that has been weaned and a ``not weaned 
steer'' as a castrated male that has not been weaned. Allow indemnity 
to be paid for not weaned steer calves and exempt these calves from 
reactor tagging, ``B'' branding, and slaughter.
    One commenter ``encourages APHIS to continue to vigorously attack 
the remaining vestiges of this contagious disease affecting animals and 
humans.'' The commenter urged that, as the

[[Page 47421]]

eradication program winds down, APHIS continue adequate monitoring and 
surveillance at first points of market concentration and/or slaughter 
to prevent reinfection of the Nation's cattle herd from undetected 
animals.
    Our final rule incorporates some of the suggestions made in the 
comments.
    We agree with the comments about the increased value of cow--calf 
pairs over individual animals, and the appraisals made under the 
brucellosis program already take into account the increased value of 
such pairs. We further believe that adequate indemnity is currently 
offered for both weaned and unweaned bull calves and that no 
clarification needs to be made to the regulations regarding the 
eligibility of bull calves for indemnity. We also do not believe that 
definitions of steer and bull calves need to be added to the 
regulations. However, we will amend the regulations to allow for 
payment of indemnity for certain neutered calves as explained below.
    In regard to the suggestions regarding unweaned calves in herds 
approved for depopulation, we recognize the problems described 
previously for herd owners caused by slaughtering cows that have 
nursing calves. We have decided to offer herd owners indemnity for 
unweaned, neutered cattle and bison in herds approved for depopulation. 
We are changing the regulations in paragraph (d) of Sec. 51.9, ``Claims 
not allowed,'' to allow for such payment. However, for reasons 
described below, we are not changing our regulations to incorporate the 
suggestion to allow indemnity to be paid for these calves but not 
require them to be destroyed.
    As with all other animals for which Federal indemnity is provided 
under the brucellosis eradication program, we will require that owners 
of unweaned, neutered cattle and bison in herds approved for 
depopulation send these unweaned calves to slaughter or otherwise 
destroy them in accordance with the regulations in order to receive 
indemnity for them. Although these animals do not pose a threat of 
spreading brucellosis, we believe that it is important to require their 
destruction because we do not want to establish a situation in which it 
is financially beneficial for owners to have brucellosis infection in 
their herds. By providing indemnity for these calves and then allowing 
the owners to keep them, the possibility exists that the owners could 
profit from this action if the animals are raised and then sold at a 
later date. As stated previously, our goal in providing indemnification 
to owners under the brucellosis eradication program is to provide 
sufficient financial incentive to encourage destruction of infected and 
exposed animals. Therefore, we are not amending the requirement in 
Sec. 51.3 of the regulations that owners must provide proof of 
destruction of their animals in order to collect Federal indemnity for 
them. We are also not amending the requirements in Sec. 51.5, which 
specifies methods of identification, including an option for ``B'' 
branding, for animals to be destroyed. Owners who choose to seek 
Federal indemnity for unweaned, neutered calves in herds approved for 
depopulation must identify and move these calves to slaughter in 
accordance with Sec. 51.5 of the regulations and provide proof of 
destruction for them in accordance with Sec. 51.3 of the regulations.
    In regard to the comment concerning continued efforts by APHIS to 
identify and eliminate the last vestiges of brucellosis, we recognize 
the need to ensure adequate monitoring and surveillance to detect and 
eliminate any newly discovered sources of the disease and are committed 
to continuing efforts in this regard.
    We are also making a change to the interim rule to correct an 
inadvertent omission. As stated previously, the interim rule specifies 
that, for owners of herds and individual exposed animals that qualify 
for either the appraisal method or the fixed-rate method of indemnity, 
the indemnity rate under the fixed-rate method shall not exceed $250 
per animal. For reasons explained below, the interim rule should have 
stated that, under the fixed-rate system, the indemnity shall not 
exceed $250 per animal for bison and nonregistered cattle other than 
dairy cattle and $750 per animal for registered cattle and 
nonregistered dairy cattle. We are amending the language in Sec. 51.3 
(a)(2)(ii)(B) accordingly.
    Prior to publication of the interim rule, the indemnity regulations 
for herd depopulation in States other than Class Free States took into 
account the higher value of dairy cattle and registered beef cattle in 
comparison with bison and nonregistered beef cattle. The former 
regulations provided that, in States other than Class Free States, the 
indemnity for animals in herds depopulated because of brucellosis would 
not exceed $250 per animal for any bison and nonregistered cattle other 
than dairy cattle and the lesser of 95 percent of appraised value minus 
salvage value or $750 for any registered cattle or nonregistered dairy 
cattle. The regulations essentially provided a fixed-rate system with 
an appraisal component in States other than Class Free States: For 
regulated animals with comparatively lower values (bison and 
nonregistered beef cattle), the indemnity was capped at $250; for 
regulated animals with comparatively higher values (registered beef 
cattle and dairy cattle), the indemnity was capped at $750.
    As stated previously, under the new indemnity system established by 
the interim rule, owners of herds approved for depopulation must choose 
one of the two methods (appraisal or fixed rate) for all of the animals 
in the herd. While the appraisal method obviously accounts for 
differences in value of animals, the fixed-rate method ($250 per 
animal) does not account for any differences in value. In changing the 
former indemnity regulations to the interim rule, we inadvertently 
omitted under the fixed-rate method the higher rates (up to $750 per 
animal) that had been in place under the former regulations for 
registered animals and dairy cattle in States other than Class Free 
States.
    Under the interim rule, owners of nonregistered beef cattle herds 
are expected to choose the fixed-rate method because the rate of $250 
per animal plus salvage value is fair compensation for these animals; 
owners of registered beef cattle herds are expected to choose the 
appraisal method because $250 per animal plus salvage value is 
inadequate compensation for such animals. Owners of beef cattle herds 
with a mixture of registered and nonregistered animals would have to 
choose the appraisal method to obtain adequate compensation for all 
their animals. However, in certain situations, the fixed-rate method 
can be advantageous to both APHIS and the owner, i.e., APHIS can avoid 
the cost of conducting the appraisals, and the owner can receive the 
indemnity money quickly. To make the fixed-rate method under the 
interim rule commensurate with the former indemnity regulations, which 
accounted for the higher value of registered beef cattle and dairy 
cattle, we are splitting the fixed-rate method into the two levels 
described above. This change in the fixed-rate method should not cause 
a significant difference in program expenditures and will facilitate 
depopulation of affected herds with a mixture of registered and 
nonregistered animals.
    Therefore, based on the rationale set forth in the interim rule and 
in this document, we are adopting the provisions of the interim rule as 
a final rule with the changes discussed in this document.
    This final rule also affirms the information contained in the 
interim rule concerning Executive Orders 12372

[[Page 47422]]

and 12988 and the Paperwork Reduction Act. Because the emergency nature 
of the interim rule made compliance with section 603 and timely 
compliance with section 604 of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.) impracticable, we are addressing the Regulatory 
Flexibility Act in this document as set forth below.

Effective Date

    This is a substantive rule that relieves restrictions concerning 
the payment of indemnity for certain cattle and bison. Therefore, 
pursuant to the provisions of 5 U.S.C. 553, it may be made effective 
less than 30 days after publication in the Federal Register.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be not significant for the purposes of Executive 
Order 12866 and, therefore, has not been reviewed by the Office of 
Management and Budget.
    In its effort to eradicate brucellosis, an infectious and 
contagious bacterial disease affecting animals and humans, the Federal 
Government offers indemnity payments to owners of cattle and bison 
destroyed because of brucellosis in accordance with the regulations in 
9 CFR part 51. As completion of the brucellosis eradication program 
approaches, whole-herd depopulation of affected herds has become 
critical. Program officials recently determined that the Federal 
indemnity payments needed to be increased to provide sufficient 
incentive for owners to agree to depopulate herds. When whole-herd 
depopulation is necessary, producers incur costs related not only to 
animal loss, but also to transactions, including expenses of gathering 
and loading, transportation, and commission fees. Furthermore, with the 
loss of an entire herd, producers suffer production losses; dairy 
operations lose milk production, and beef operations lose calves. 
Registered herds may experience the irretrievable loss of valuable 
breeding characteristics.
    In an interim rule published in the Federal Register on March 31, 
1998, (63 FR 15281-15284, Docket No. 98-016-1), APHIS increased the 
Federal indemnity payments under the brucellosis eradication program to 
better reflect the appraised value, or fair market value, of certain 
animals destroyed under the program. Program officials believe that the 
increased payments will provide the necessary inducement for producers 
to depopulate affected herds and replace slaughtered animals with 
healthier ones. The continued existence of these herds increases the 
risk of disease spread and prolongs the eradication process.
    In 1997, the total number of cattle and bison in the United States 
was approximately 101.2 million, valued at about $53 billion. Gross 
income of the U.S. cattle industry was about $31 billion, and total 
U.S. earnings from exports of live cattle, beef, and veal was 
approximately $2.6 billion. More than 97 percent of the 1,167,910 U.S. 
cattle and bison operations had gross cash values of less than 
$500,000, which, according to standards for agricultural producers set 
by the Small Business Administration, categorizes these operations as 
small entities.
    The number of brucellosis-affected herds varies over time. 
According to an informal APHIS estimate, for each herd in quarantine, 
program officials expect the possible existence of two potential 
suspect herds. As of July 31, 1998, eight cattle herds and one bison 
herd were under quarantine. However, only six herds (all owned by 
persons considered to be small entities) were potential candidates for 
depopulation. Five were nonregistered beef herds with a total of 
approximately 1,367 head of cattle, and one was a registered beef herd 
with about 155 head.
    According to the indemnity regulations in place prior to 
publication of the interim rule, the producers accepting herd 
depopulation would have received $250 per head as indemnity payment for 
bison and nonregistered beef cattle destroyed and the lesser of either 
95 percent of appraised value minus salvage value or $750 for any 
registered cattle or nonregistered dairy cattle. In addition to these 
Federal indemnity payments, these owners would have received the 
salvage value for each animal and possibly a State supplement to the 
Federal indemnity payment.
    In 1997, beef and cull dairy cows sold for slaughter brought an 
average of $270 salvage value per 900-lb animal. The replacement cost 
of a nonregistered beef cow with calf averaged $750, and a cow with no 
calf, $500. A replacement cow from a registered beef herd averaged 
$1,200. These figures show that, even before taking into account the 
other costs, the total compensation (the sum of the salvage value and 
the indemnity amounts in place at that time) paid to a nonregistered 
herd owner still fell short of the replacement costs. Specifically, the 
shortfall averaged $230 per nonregistered beef cow with calf. As a 
result, many producers would not opt for whole-herd depopulation if 
offered. The continued existence of affected herds can result in the 
spread of brucellosis, hindering the eradication process and increasing 
long-term costs.
    Under this final rule, which gives producers of herds approved for 
depopulation the option of receiving a fixed rate for their animals or 
an amount based on an appraisal, it is anticipated that many producers 
will choose the fixed-rate method for claiming indemnity for bison and 
nonregistered beef cattle and the appraisal method for registered 
cattle and nonregistered dairy cattle. For owners of bison and 
nonregistered beef cattle, the value per animal would be about $520 
(the fixed rate plus the estimated salvage value), which is very close 
to the market value of the animals. Owners of registered cattle and 
nonregistered dairy cattle would not incur a direct market loss because 
the new indemnity payments would amount to the appraised market value 
of the live animals minus the salvage value realized. Owners of herds 
comprising registered and nonregistered beef cattle could choose either 
indemnity method to receive adequate compensation for their animals as 
a result of a change from the interim rule to the final rule that split 
the flat rate into two levels--$250 for bison and nonregistered beef 
cattle and $750 for registered beef cattle and dairy cattle. Another 
change from the interim rule to the final rule is the inclusion in the 
indemnity payment program of neutered calves that are nursing cows in 
herds approved for depopulation. These calves were formerly excluded 
from eligibility for indemnity. This change will have an additional 
mitigating impact on the losses certain producers would incur through 
herd depopulation.
    The cost to APHIS for paying indemnity to the six eligible herd 
owners if they had decided to participate in whole-herd depopulation 
under the former indemnity regulations would have been approximately 
$322,375; the cost to APHIS under the regulations created by the 
interim and final rules would be approximately $352,450--a difference 
of $30,075. (We estimate that $26,625 of that total is the result of 
paying indemnity for the neutered calves.) Because keeping potentially 
diseased animals or having a herd under quarantine creates a severe 
competitive disadvantage, these producers can be expected to 
participate in whole-herd depopulation if their losses are reasonably 
reduced. These figures do not take into account any currently 
unidentified affected herds for which APHIS may want to encourage 
depopulation in the future. However, the total compensation that APHIS 
will provide in fiscal year 1998 will be limited by available 
appropriated

[[Page 47423]]

funding and will not exceed $3.41 million on a nationwide basis.
    Compared with the value of the U.S. cattle industry and its 
importance to the national economy, the actual costs of increased 
indemnity for depopulating all animals in all brucellosis-affected 
herds is small. Competitiveness in the international market depends 
upon a reputation for producing high-quality, disease-free animals. 
Both the actual product and the purchasers' perception of the product's 
quality contribute to continued world market acceptance. While isolated 
brucellosis outbreaks resulting in relatively small potential losses in 
cattle production can reduce the confidence of importers and cause a 
loss of trade, the damage that would result from a widespread 
brucellosis infection would be extremely costly and harmful to U.S. 
gross national income. Therefore, efforts to eradicate brucellosis and 
secure the health of the cattle industry continue to serve the economic 
interests of the Nation. The increased indemnity payments promulgated 
by this rule are expected to provide a stronger incentive for whole-
herd depopulation of affected cattle. This rule should result in 
savings to the eradication program because the rule will facilitate the 
program's progress. The overall effect of this rule upon supply, price, 
and competitiveness is expected to be minor or none.
    Under these circumstances, the Administrator of the Animal and 
Plant Health Inspection Service has determined that this action will 
not have a significant economic impact on a substantial number of small 
entities.

List of Subjects in 9 CFR Part 51

    Animal diseases, Cattle, Hogs, Indemnity payments, Reporting and 
recordkeeping requirements.

    Accordingly, we are amending 9 CFR part 51 as follows:

PART 51--ANIMALS DESTROYED BECAUSE OF BRUCELLOSIS

    1. The authority citation for part 51 continues to read as follows:

    Authority: 21 U.S.C. 111-113, 114, 114a, 114a-1, 120, 121, 125, 
and 134b; 7 CFR 2.22, 2.80, and 371.2(d).

    2. In Sec. 51.3, paragraph (a)(2)(ii)(B) is revised to read as 
follows:


Sec. 51.3   Payment to owners for animals destroyed.

    (a) * * *
    (2) * * *
    (ii) * * *
    (B) Fixed-rate method. The indemnity shall not exceed $250 per 
animal for bison and nonregistered cattle other than dairy cattle and 
$750 per animal for registered cattle and nonregistered dairy cattle.
* * * * *
    3. In Sec. 51.9, paragraph (d) is revised to read as follows:


Sec. 51.9   Claims not allowed.

* * * * *
    (d) If the animals are:
    (1) Barrows or gilts maintained for feeding purposes; or
    (2) Spayed heifers or steers, unless the steers are work oxen, or 
unless the spayed heifers or steers are unweaned animals in a herd 
approved for depopulation in accordance with Sec. 51.3 of this part.
* * * * *
    Done in Washington, DC, this 28th day of August, 1998.
Joan M. Arnoldi,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 98-24016 Filed 9-4-98; 8:45 am]
BILLING CODE 3410-34-P