[Federal Register Volume 68, Number 50 (Friday, March 14, 2003)]
[Rules and Regulations]
[Pages 12283-12285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6161]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 50 / Friday, March 14, 2003 / Rules 
and Regulations  

[[Page 12283]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 1

[Docket No. 99-087-3]


Licensing and Inspection Requirements for Dealers of Dogs 
Intended for Hunting, Breeding, or Security Purposes

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are amending the animal welfare regulations to reflect our 
policy of regulating only wholesale dealers, and not retail dealers, of 
dogs intended for hunting, breeding, or security purposes. We currently 
regulate these wholesale dealers under the same regulations in place 
for wholesale dealers of other dogs. This action makes the regulations 
consistent with our policy and, therefore, clarifies licensing and 
inspection requirements for affected dealers of dogs intended for 
hunting, breeding, or security purposes.

EFFECTIVE DATE: April 14, 2003.

FOR FURTHER INFORMATION CONTACT: Dr. Jerry DePoyster, Senior Staff 
Veterinarian, Animal Care, APHIS, 4700 River Road Unit 84, Riverdale, 
MD 20737-1234; (301) 734-7586.

SUPPLEMENTARY INFORMATION: 

Background

    The Animal Welfare Act (AWA) (7 U.S.C. 2131 et seq.) authorizes the 
Secretary of Agriculture to promulgate standards and other requirements 
governing the humane handling, housing, care, treatment, and 
transportation of certain animals by dealers, research facilities, 
exhibitors, carriers, and intermediate handlers. The Secretary of 
Agriculture has delegated the responsibility of enforcing the AWA to 
the Administrator of the Animal and Plant Health Inspection Service 
(APHIS). The regulations established under the AWA are contained in 
title 9 of the Code of Federal Regulations (9 CFR), chapter I, 
subchapter A, parts 1, 2, and 3. Part 1 defines various terms used in 
parts 2 and 3. Part 2 contains general requirements for regulated 
parties, and part 3 contains specific requirements for the care and 
handling of certain animals. Subpart A of part 3 contains the 
requirements applicable to cats and dogs.
    Under section 4 of the AWA (7 U.S.C. 2134), a dealer may not sell 
an animal as a pet or for exhibition unless he or she first obtains a 
license from the Secretary. Section 4 also requires a dealer to have a 
license to buy from or sell to another dealer (i.e., at the wholesale 
level). Because dogs sold for hunting, breeding, or security purposes 
are not sold to research facilities, or for use as pets or for 
exhibition, dealers in these dogs do not need a license to buy or sell 
them unless they do so at the wholesale level.
    Section 13 of the AWA (7 U.S.C. 2143) directs the Secretary to 
promulgate standards of care with which regulated dealers must comply. 
Because section 4 of the AWA requires the regulation only of wholesale 
dealers of hunting, breeding, and security dogs, retail dealers of such 
dogs are not subject to the standards promulgated under section 13 of 
the AWA.
    In accordance with the AWA, on July 19, 1999, we published in the 
Federal Register (64 FR 38546-38548, Docket No. 97-018-4) a decision 
and a policy statement that notified the public that, among other 
things, we had established a policy to license and inspect wholesale 
dealers of dogs intended primarily for hunting, breeding, or security 
purposes. This means that we currently regulate these dealers under the 
same regulations in place for wholesale dealers of other dogs. We 
instituted this policy to help ensure the humane handling, care, and 
treatment of hunting, breeding, and security dogs.
    Because the regulations at Sec.  2.1 require that all dealers of 
dogs must be licensed and inspected, we published in the Federal 
Register on December 4, 2000 (65 FR 75635-75637, Docket No. 99-087-1), 
a proposal to amend the regulations to reflect the intent of the AWA 
and our policy of regulating only wholesale dealers of dogs intended 
for hunting, breeding, or security purposes. Specifically, we proposed 
to amend the definition of dealer in Sec.  1.1 to make it clear that, 
with respect to dealers of hunting, breeding, and security dogs, the 
term applies only to wholesale dealers of these dogs.
    We solicited comments concerning our proposal for 60 days ending 
February 2, 2001. We extended the deadline for comments until April 3, 
2001, in a document published in the Federal Register on January 22, 
2001 (66 FR 6491-6492, Docket No. 99-087-2). We received 28,485 
comments by April 3, 2001, the closing date of the extended comment 
period. The comments, which were primarily form letters or variations 
of form letters, were from dog breeders, animal welfare advocates (both 
individuals and organizations), dog owners and fanciers, 
representatives of State and local governments, and members and 
representatives of kennel clubs or specific dog breed associations. 
These comments are discussed below.
    Several thousand commenters suggested that all breeders of dogs 
that can be considered hunting, breeding, or security dogs should be 
regulated at not only the wholesale level, but at the retail level as 
well. Many of these commenters also suggested that our policy and 
proposal were contrary to the intent of the AWA.
    In response, it is important to note that we proposed this action 
in order to bring our regulations into accord with our policy of 
regulating only wholesale dealers of dogs intended for hunting, 
breeding, or security purposes. Our policy statement, discussed 
previously, clarified that we regulate only wholesale dealers of dogs 
intended for hunting, breeding, or security purposes. Again, this 
continuity-creating action helps ensure the humane handling, care, and 
treatment of hunting, breeding, and security dogs.
    As described above, the regulations at Sec.  2.1 require that all 
dealers of dogs must be licensed and inspected. Currently, then, 
because our definition of dealer in Sec.  1.1 can be extended or 
interpreted to include both wholesale and retail dealers of hunting, 
breeding, and security dogs, our regulations have been inconsistent 
with our published policy. As stated previously and in the

[[Page 12284]]

proposed rule, the change will be reflected in the definition of dealer 
in Sec.  1.1.
    We do not believe that modifying the definition of dealer to 
reflect our policy is contrary to the intent of the AWA because the Act 
does not make retail dealers of dogs intended for hunting, breeding, or 
security purposes subject to Federal licensing and regulation. We 
believe it is important to modify the definition of dealer in order to 
make explicit the provisions of the Act. It is important to note that 
our change is consistent with congressional revisions of the AWA in 
which Congress did not alter our definition of retail pet store. 
Therefore, we are confident that the proposed rule and this final rule 
reflect Congress' original and continuing intent that, with respect to 
dealers of hunting, breeding, and security dogs, the definition of 
dealer focus solely on dealers who sell on the wholesale level.
    We also believe that our implementation of the AWA has 
significantly improved the well-being of animals owned by the wholesale 
dealers we regulate, as well as that of animals owned by retail 
dealers. It is likely that many retail outlets have improved the living 
standards of their animals in order to meet the standards of their 
wholesale counterparts.
    Further, we have determined that retail dealers, especially those 
who sell from their homes, are already subject to a degree of self-
regulation and oversight by persons who purchase animals from the 
retailers' homes, as well as by breed and registry organizations, which 
require their registrants to meet certain guidelines related to the 
health and genetic makeup of animals bred and to the education of the 
registrants. Typically, wholesale dealers do not have the same amount 
of oversight from the public.
    Other commenters suggested that unregulated retail dealers of 
purebred dogs have no regard for hereditary diseases they propagate. 
These commenters indicated that unsuspecting customers who purchase 
diseased animals have no means for Federal recourse. Many of these same 
commenters noted that retail dealers who are humane would welcome 
licensing and inspection requirements.
    In response, retail dealers of pets are not unregulated. Many State 
and local laws and ordinances are in place to monitor and respond to 
allegations of inhumane treatment and inadequate housing for animals 
owned by private retail dealers.
    Another large group of commenters supported most of the proposal, 
but requested that we further modify the definition of ``dealer'' in 
Sec.  1.1 to include establishments referred to as ``puppy mills.'' 
These commenters indicated that retail dealers should remain excluded 
from the definition of ``dealer,'' but suggested that we need to 
regulate high-volume dealers.
    Although there is no standard, fully encompassing definition for 
the term ``puppy mill,'' most people use it to refer to high-volume 
breeding establishments that sell dogs at the wholesale level and sell 
few, if any, dogs directly to the public. Therefore, as wholesale 
dealers, the sellers in question are subject to licensing and 
inspection requirements.
    We are not making any changes to the rule as a result of these 
comments because we have determined that this rule will make our 
regulations more consistent with our policy to regulate only wholesale 
dealers of dogs intended for hunting, breeding, or security purposes, 
and will, therefore, clarify licensing and inspection requirements for 
affected dealers of these dogs.
    We received a total of 1,238 comments expressing support for our 
proposal. The vast majority of these comments came from self-identified 
hobby breeders who indicated they were registered with kennel clubs or 
other breed registry organizations.
    Many of these commenters indicated that their breeding dog was a 
family pet and their hobby breeding establishment was a home-based 
business. Most commenters shared the concern that additional regulation 
of retail dealers would require them to become registered dealers and 
to adhere to licensing and inspection requirements. Those who expressed 
this concern were adamantly opposed to paying licensing fees for their 
hobby breeding establishments and having their private homes inspected. 
Many suggested that such requirements would be cumbersome, if not 
impossible, to enforce.
    In response, we are charged with enforcing the provisions of the 
AWA which require the regulation only of wholesale dealers of hunting, 
breeding, or security dogs.
    Therefore, for the reasons given in the proposed rule and in this 
document, we are adopting the proposed rule as a final rule, without 
change.

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 accordance with 5 U.S.C. 604, we have performed a final 
regulatory flexibility analysis, which is set out below, regarding the 
economic effects of this rule on small entities.
    This final rule amends the regulations to reflect our policy of 
regulating only wholesale dealers of dogs intended for hunting, 
breeding, or security purposes. As such, this action does not result in 
any change to our operations. We currently help ensure the humane 
handling, care, and treatment of hunting, breeding, and security dogs 
through the licensing and inspection of wholesale dealers of these 
dogs; we regulate these dealers under the same regulations in place for 
wholesale dealers of other types of dogs.
    We have used all available data to estimate the potential economic 
effects of changing the definition of dealer in Sec.  1.1 to reflect 
our policy of regulating wholesale dealers of hunting, breeding, or 
security dogs. However, specific data concerning the number of small 
entities that will be affected by this rule is not available. In our 
proposed rule, we invited comments. However, none of the comments we 
received specifically addressed potential economic effects.
    To comply with our current policy and the regulations, wholesale 
dealers of dogs intended for hunting, breeding, or security purposes 
incur costs for licensing, as well as other expenses. The costs of 
licensing for affected dealers include an annual application fee of $10 
and an annual class ``A'' license fee based on 50 percent of total 
gross sales or compensation from leased animals. License fee amounts 
are determined according to ranges shown in Table 1 of 9 CFR part 2, 
Sec.  2.6.
    Among other costs incurred by wholesale dealers of hunting, 
breeding, and security dogs are expenses related to veterinary care, 
tagging or tattoo marking for animal identification, recordkeeping, 
health certification of dogs commercially transported, and maintenance 
of appropriate facilities and operating standards (see 9 CFR part 3, 
subpart A). It is reasonable to assume, however, that these 
responsibilities are met by affected dealers simply as a matter of good 
business practice. When dealers satisfy the facilities and operating 
standards of the regulations by, for example, providing a safe and 
healthy environment (including appropriate heating, cooling and 
ventilation of the dogs' housing to adequate feeding and exercising 
programs), those dealers are contributing to their dogs' eventual sale 
value. As another example, records of transactions can only further a 
wholesale dealer's business success.

[[Page 12285]]

Therefore, it is in a dealer's financial interest to promote the health 
and well-being of his or her dogs in accordance with the regulations. 
However, if any wholesale dealers of hunting, breeding, or security 
dogs were not in compliance with the regulations in 9 CFR parts 2 and 3 
prior to our policy announcement on July 19, 1999, they will likely 
have incurred expenses related to meeting these requirements. We do not 
have information on the number of such dealers or what their expenses 
might be.
    The purpose of this rule is actually to remove requirements 
covering dealers who sell hunting, breeding, or security dogs at the 
retail level. Those dealers will experience no economic effects from 
this action since we have never enforced those provisions.
    The Regulatory Flexibility Act requires that agencies consider the 
economic effects of rules on small entities. The Small Business 
Administration determines the criteria by which entities are classified 
as ``small,'' using the North American Industry Classification System 
(NAICS) categories. Wholesale dealers of hunting, breeding, or security 
dogs are included within NAICS category 112990, ``All Other Animal 
Production.'' Small entities in this category are ones with annual 
receipts of $750,000 or less. Although data is not available on the 
number of wholesale dealers of hunting, breeding, or security dogs, or 
their incomes, we presume the majority are small entities.
    While a substantial number of affected dealers may be small 
entities, we expect the effect of this rule on these dealers will be 
insignificant because licensing and inspection fees will remain the 
same. This action simply makes our regulations consistent with our 
policy and, therefore, clarifies licensing and inspection requirements 
for affected dealers of dogs intended for hunting, breeding, and 
security purposes.
    This rule contains various recordkeeping requirements, which were 
described in our proposed rule, and which have been approved by the 
Office of Management and Budget (See ``Paperwork Reduction Act'' 
below).

Executive Order 12372

    This program/activity is listed in the Catalog of Federal Domestic 
Assistance under
    No. 10.025 and is subject to Executive Order 12372, which requires 
intergovernmental consultation with State and local officials. (See 7 
CFR part 3015, subpart V.)

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule. The Animal Welfare Act does not provide administrative procedures 
which must be exhausted prior to a judicial challenge to the provisions 
of this rule.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the information collection or recordkeeping requirements 
included in this rule have been approved by the Office of Management 
and Budget (OMB) under OMB control number 0579-0169.

Government Paperwork Elimination Act Compliance

    The Animal and Plant Health Inspection Service is committed to 
compliance with the Government Paperwork Elimination Act (GPEA), which 
requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible. For information pertinent to GPEA 
compliance related to this rule, please contact Mrs. Celeste Sickles, 
APHIS' Information Collection Coordinator, at (301) 734-7477.

List of Subjects in 9 CFR Part 1

    Animal welfare, Pets, Reporting and recordkeeping requirements, 
Research.

    Accordingly, we are amending 9 CFR Part 1 as follows:

PART 1--DEFINITION OF TERMS

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

    Authority: 7 U.S.C. 2131-2159; 7 CFR 2.22, 2.80, and 371.7.


    2. In Sec.  1.1 the definition for dealer is revised to read as 
follows:


Sec.  1.1  Definitions.

* * * * *
    Dealer means any person who, in commerce, for compensation or 
profit, delivers for transportation, or transports, except as a 
carrier, buys, or sells, or negotiates the purchase or sale of: Any dog 
or other animal whether alive or dead (including unborn animals, 
organs, limbs, blood, serum, or other parts) for research, teaching, 
testing, experimentation, exhibition, or for use as a pet; or any dog 
at the wholesale level for hunting, security, or breeding purposes. 
This term does not include: A retail pet store, as defined in this 
section, unless such store sells any animal to a research facility, an 
exhibitor, or a dealer (wholesale); any retail outlet where dogs are 
sold for hunting, breeding, or security purposes; or any person who 
does not sell or negotiate the purchase or sale of any wild or exotic 
animal, dog, or cat and who derives no more than $500 gross income from 
the sale of animals other than wild or exotic animals, dogs, or cats 
during any calendar year.
* * * * *

    Done in Washington, DC, this 10th day of March, 2003.
Peter Fernandez,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 03-6161 Filed 3-13-03; 8:45 am]
BILLING CODE 3410-34-P