[Federal Register Volume 68, Number 130 (Tuesday, July 8, 2003)]
[Proposed Rules]
[Pages 40541-40553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17042]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 373

9 CFR Part 60

[Docket No. 02-062-1]
RIN 0579-AB50


Cost-Sharing for Animal and Plant Health Emergency Programs

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: We are proposing new regulations that would establish criteria 
to determine the Federal share of financial responsibility relative to 
States and other cooperators in an emergency in which an animal or 
plant pest or disease threatens the agricultural production of the 
United States. The increasing frequency of new pest and disease 
incursions, the variation in cost-sharing arrangements among past and 
present emergency programs, and constraints on Federal and State 
resources necessitate a more consistent and predictable approach to 
cost allocation among program participants. The cost-sharing 
arrangements provided in this proposed rule would apply to most 
emergency program activities, including the payment of compensation, 
that are authorized under the Plant Protection Act and the Animal 
Health Protection Act. This would include funding provided to respond 
to an emergency, as well as funding included in the annual budget 
request for ongoing actions previously funded through emergency 
authority. The intent of this proposal is to facilitate long-term 
resource planning and funding decisions by both the Federal Government 
and cooperators. Since infestations can have a national impact, as well 
as affect State and local governments, industry, and producers, and 
remedial actions will benefit all affected interests, there needs to be 
a way to determine the appropriate allocation of responsibility in 
combating these infestations. The purpose of this rulemaking is to 
describe the criteria that would be used to determine the appropriate 
levels of responsibility between the Federal Government and 
cooperators.

DATES: We will consider all comments that we receive on or before 
September 8, 2003.

ADDRESSES: You may submit comments by postal mail/commercial delivery 
or by e-mail. If you use postal mail/commercial delivery, please send 
four copies of your comment (an original and three copies) to: Docket 
No. 02-062-1, Regulatory Analysis and Development, PPD, APHIS, Station 
3C71, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state 
that your comment refers to Docket No. 02-062-1. If you use e-mail, 
address your comment to [email protected]. Your comment must 
be contained in the body of your message; do not send attached files. 
Please include your name and address in your message and ``Docket No. 
02-062-1'' on the subject line.
    You may read any comments that we receive on this docket in our 
reading room. The reading room is located in room 1141 of the USDA 
South Building, 14th Street and Independence Avenue SW., Washington, 
DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through 
Friday, except holidays. To be sure someone is there to help you, 
please call (202) 690-2817 before coming.
    APHIS documents published in the Federal Register, and related 
information, including the names of organizations and individuals who 
have commented on APHIS dockets, are available on the Internet at 
http://www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: Mr. Kevin Shea, Director, Policy and 
Program Development, APHIS, 4700 River Road, Unit 116, Riverdale, MD 
20737-1237; (301) 734-5136.

SUPPLEMENTARY INFORMATION:

Background

Emergency Program Authorities and Operations

    The Plant Protection Act (7 U.S.C. 7701-7772) and the Animal Health

[[Page 40542]]

Protection Act (7 U.S.C. 8301-8317) assign to the Federal Government 
responsibility to prevent the introduction, spread, and establishment 
of plant pests, noxious weeds, and pests and diseases of livestock in 
the United States.\1\ These Acts authorize the Secretary of Agriculture 
(Secretary) to regulate animals and plants, their products, and other 
articles in foreign and interstate commerce; to hold, treat, and 
destroy such articles; and to cooperate with various entities, 
including State and local governments and industry groups 
(cooperators), to carry out programs to detect, control, and eradicate 
pests and diseases. These Acts also provide the Secretary additional 
regulatory and funding authority, including the payment of 
compensation, in cases of pest and disease emergencies.
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    \1\ The Plant Protection Act and the Animal Health Protection 
Act give specific meaning to the terms ``plant pest'' and ``noxious 
weed,'' and ``pest'' and ``disease'' of ``livestock.'' In this 
Supplementary Information, we frequently use the term ``pests and 
diseases'' or ``pests or diseases'' to encompass the terms found in 
the Acts.
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    The occurrence of pests or diseases that are either foreign to or 
not widely prevalent in the United States poses a serious threat to the 
health and economic viability of U.S. animal and plant resources. These 
outbreaks are generally easier and less costly to control and eradicate 
if action is taken immediately following detection. The Animal and 
Plant Health Inspection Service (APHIS) of the U.S. Department of 
Agriculture (USDA) provides national leadership in implementing the 
Secretary's authorities, including emergency authorities, to detect, 
control, and eradicate invasive pests and diseases. APHIS frequently 
conducts these emergency programs in conjunction with affected States 
and other cooperators.

Emergency Program Costs; Recent Trends; Constraints on Federal 
Resources

    The cost of activities carried out under emergency program 
authorities to detect, control, and eradicate pests and diseases 
generally has been shared by APHIS and the State(s). These cost-sharing 
arrangements may also include industries, organizations, and groups 
that benefit from or are affected by these animal and plant protection 
activities. The allocation of emergency program costs among APHIS and 
other cooperators has varied depending upon the particular pest or 
disease, as well as other factors, such as the location of the outbreak 
or occurrence. For example, cooperative programs for eradicating fruit 
flies have historically operated on an equal cost-sharing basis with 
the affected States. In the recent outbreak of plum pox virus, a new 
pest in the United States, the State of Pennsylvania assumed a 
significant portion of the financial obligation for the operational 
program within the State, while APHIS contributed to the financing of 
activities to guard against the spread of the pest to other stone fruit 
producing States. However, in the case of Asian longhorned beetle 
(ALB), APHIS has assumed most of the cost of the operational program.
    A close examination of these programs reveals that cost allocations 
have been implicitly based on at least three factors: The size of the 
outbreak area, the area at risk beyond the initial outbreak, and the 
nature of the pest. APHIS' actions to eradicate the plum pox virus and 
ALB outbreaks were based on the technical feasibility in carrying out 
each action (presented by the small size of the initial outbreak areas) 
and the risk of spread to nonaffected areas in the absence of early and 
rapid response by the Federal Government. The Federal share of costs 
for both pest outbreaks has been greater than the cooperators' share as 
the resources at risk in the nonaffected areas were much larger than 
those in the affected areas. The nature of the pest is an additional 
factor taken into consideration in determining the Federal cost share 
level in an emergency program. As a proportion of the total cost, the 
Federal share of the plum pox control program is smaller than the 
Federal share of the ALB emergency program. This reflects the greater 
responsibility of the Federal Government in safeguarding public 
resources as the pest in the ALB case largely affects non-commercial, 
urban trees and forests.
    In recent years, the number of infestations, as well as the average 
and total cost of eradication programs to the Federal Government have 
increased significantly, as the following Table 1 illustrates:

                  Table 1.--Emergency Funding Transferred From the Commodity Credit Corporation
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                                                            FY 1981-86   FY 1987-92   FY 1993-98   FY 1999-2003
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Total funding ($ in millions)............................           41           66          136           1,234
Average annual funding ($ in millions)...................            7           11           23             264
No. of pest infestations.................................            3            4            4              19
No. of times annual funding for an infestation was:
    $10 million or more..................................            1            1            5              27
    $25 million or more..................................            0            1            0              14
    $50 million or more..................................            0            0            0               7
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    We believe that a better defined, more consistent approach to cost 
sharing and the allocation of financial responsibility among the 
Federal Government, State(s), and other cooperators would improve 
planning and funding decisions in emergency programs. In response to 
this need, and as explained in greater detail below, we are proposing 
that predetermined cost-sharing percentages apply to certain emergency 
program activities.

Emergency Program Activities Subject to Cost-Sharing

    There are a number of activities conducted as part of an emergency 
program, beginning with the detection of the pest or disease, that we 
believe should be subject to a predetermined cost-sharing arrangement. 
These would include such activities as:
    [sbull] Delimiting surveys and diagnostics.
    [sbull] Control or eradication operations (e.g., chemical, 
biological, and/or mechanical treatment regimens, including animal, 
plant, and product destruction and/or disposal).
    [sbull] Research and methods development specific to outbreaks, if 
such activities are anticipated to rapidly contribute to the success of 
the control or eradication operations.
    [sbull] Public information activities specific to outbreaks and 
designed to contribute to the success of the control or eradication 
operations.

[[Page 40543]]

    [sbull] The payment of compensation.
    Allocating the financial responsibility among the Federal 
government, State(s), and other cooperators would depend on the nature 
of the pest or disease, the extent of areas affected by the pest or 
disease versus currently nonaffected, but potentially threatened areas, 
the amount of time that has elapsed since the commencement of the 
emergency program, and the ability of States and local cooperators to 
conduct and/or fund the activities, as discussed later.
    We believe that the costs for enforcement of regulations on 
interstate and intrastate movements in conjunction with specific 
emergency programs should be allocated directly to APHIS and the States 
as appropriate. We recognize that in practice, however, these 
activities may be indistinguishable from one another, and that these 
activities could be subject to a predetermined cost-sharing arrangement 
on a case-by-case basis. We also recognize that compensation payments 
are sometimes used in conjunction with other emergency program 
activities (e.g., to encourage expedited reporting of an infestation, 
thereby contributing to control or eradication of the pest or disease). 
As described in the following section, we invite comments on the 
inclusion of the cost of these payments in a predetermined cost-sharing 
arrangement.

Compensation

    In some emergency programs, compensation payments are made to 
producers and other persons for the destruction of animals and 
materials affected by pest or disease, or for related cleaning and 
disinfection costs. Since the Federal Government and States often share 
the payment of these costs, our proposal to establish predetermined 
cost-sharing arrangements for emergency programs would also apply to 
compensation payments to producers and other affected persons. If the 
emergency program includes the payment of compensation, then the cost-
sharing percentage would be applied either to the emergency program 
costs in total (including payments of compensation) or to the 
compensation and non-compensation components separately, at the 
discretion of the Secretary.
    By applying the proposed cost-sharing criteria to the payment of 
compensation, this proposed rule, if implemented, could affect other 
APHIS regulations that cover the payment of compensation and other 
emergency program costs for specific animal and plant pests and 
diseases. The rule portion of this document does not specify what those 
potential changes would be. However, the final rule, if implemented, 
would include any necessary changes to other APHIS regulations.

Factors Affecting the Federal Share of Emergency Program Costs

    We have identified certain factors that we believe should influence 
the relative levels of Federal and cooperator support in emergency 
program activities covered by our proposal.

Priority Pests and Diseases

    Of particular concern are highly contagious, virulent diseases, 
such as foot-and-mouth disease, and other pests or diseases that can 
spread rapidly, and quickly affect production, markets, and/or the 
environment over a large area. Also of concern are pests or diseases 
that, while not contagious (or as contagious), affect human health with 
resulting effects on the marketing of agricultural products. Full, 
immediate, and sustained application of Federal resources generally is 
required to eliminate these pests and diseases or minimize their 
effects. Our proposed rule, as discussed below, would refer to these 
pests and diseases as ``priority pests and diseases.'' We believe that 
the following pests and diseases would likely fall into this category:
    [sbull] Foot-and-mouth disease
    [sbull] Hog cholera (classical swine fever)
    [sbull] Highly pathogenic avian influenza
    [sbull] Exotic Newcastle disease
    [sbull] Rinderpest
    [sbull] African swine fever
    [sbull] Contagious bovine pleuropneumonia
    [sbull] Lumpy skin disease
    [sbull] Bovine spongiform encephalopathy
    [sbull] Downy mildew of corn
    [sbull] Wheat rust

The Extent of Affected Versus Nonaffected Areas

    Pest and disease outbreaks usually (if inspection, monitoring, and 
surveillance programs are effective) begin at only one or a few loci. 
The Federal government has a statutory responsibility under the Plant 
Protection Act and the Animal Health Protection Act to protect 
susceptible animal, plant, and environmental resources that are free of 
the pest or disease by preventing its interstate spread and taking 
actions to eliminate the outbreak. When a pest or disease outbreak 
occurs, program specialists conduct assessments of its potential rate 
of spread and consequences. We believe that the Federal share of 
emergency program costs should be higher in situations where the areas 
or resources affected by the pest or disease occurrence are small, but 
the nonaffected areas or resources at risk are high. While there are 
innumerable such scenarios, we believe that the nonaffected areas or 
resources at risk in these situations should be at least 10 times 
greater than the affected areas or resources. Nonaffected areas or 
resources at risk would include those areas where the pest or disease 
could spread within 1 year in the absence of any action to control or 
eradicate the pest or disease. For larger outbreaks in which many 
States are affected (particularly States with commercial interests) and 
participating in the emergency program, the Federal share of program 
costs should be lower.

Timing of Emergency Program Operations--Financial Resources of 
Cooperators

    Long-standing relationships between APHIS and State and industry 
cooperators usually enable an effective programmatic response to 
serious outbreaks. However, cooperator contributions are frequently in-
kind or intangible, especially in the early stages of a program. States 
or other cooperators may lack financial resources of the magnitude 
required, or they may lack the capability to quickly access those 
resources.
    In situations where the success of detection, control, or 
eradication operations is especially time sensitive and program 
objectives may be achieved in a relatively short period of time, 
leading to lower total program costs, we believe that the Federal 
government should be prepared to provide more financial support early 
in the program to ensure a timely and cost-effective response to a pest 
or disease occurrence. We also believe that even in emergency programs 
of longer anticipated duration, for reasons stated above, our 
cooperators may not be able to provide their full share during the 
program's early stages. In these situations, we would expect that 
cooperator contributions would increase after the emergency program has 
been in operation for several years.
    As we have said, we believe that the Federal government has a 
responsibility to take leadership in rapidly responding to a pest or 
disease occurrence. We are committed to carrying out that 
responsibility. We also believe that States and other cooperators have 
and should continue to share in that responsibility. In that regard, it 
is our desire that our cooperators continue to develop the capacity, 
including funding, to be full participants in emergency programs.
    We intend to continue to work with our cooperators to develop 
emergency response capabilities, including

[[Page 40544]]

commitment and capacity for cost sharing. In recent years, APHIS has 
worked with States to develop Standards for State Animal Health 
Emergency Management Systems. These standards include a standard 
addressing the adequacy of funding mechanisms and the sufficiency of 
funding to meet animal health emergency needs. APHIS and the States 
should work toward achieving performance goals for the development of 
the standards and tie financial support of State involvement in a given 
program activity to meeting these goals. We intend to carry out similar 
efforts to help strengthen Federal and State plant health emergency 
management systems.

Cost-Sharing Percentages

    We believe that, as a starting point, the Federal share of covered 
emergency program costs should be up to 50 percent. We believe that the 
following factors could cause an increase in this percentage:
    [sbull] If higher Federal involvement in the early stages of an 
emergency program would lead to lower total program costs.
    [sbull] If the areas or value of resources at risk (e.g., 
nonaffected areas) are very large compared to the affected area.
    [sbull] If a State or other cooperator lacks financial resources.
    [sbull] If the emergency involves a priority pest or disease.
    We also believe that if the pest or disease directly affects one or 
more State commercial interests within the affected area, then the 
Federal share would be slightly lower.

Duration of Programs

    We propose that Federal funding would continue for no more than 10 
years for new emergency programs or 5 years for programs already 
underway, unless the Secretary determines that Federal payments for a 
longer period are necessary. We would also provide that if the same 
pest or disease occurs in a location that is geographically separate 
from the original outbreak, or reoccurs in the area of the original 
outbreak following a prescribed time period after eradication is 
completed, as determined by a USDA scientific assessment, then it could 
be considered a new outbreak and subject to new cost-sharing and 
program duration requirements.

Proposed Rule

    Based on the general principles just discussed, we are proposing 
regulations that would establish criteria to determine the Federal 
share of emergency program costs relative to States and other 
cooperators. The regulations would be in two new parts in the Code of 
Federal Regulations (CFR), one part in the plant-related provisions of 
title 7, chapter III, and one part in the animal-related provisions of 
title 9, chapter I, subchapter B.
    The two new parts, ``Cost Sharing for Plant Health Emergency 
Programs'' to appear at 7 CFR part 373, and ``Cost Sharing for Animal 
Health Emergency Programs'' to appear at 9 CFR part 60, would be 
constructed similarly: Each would contain a section that provides 
definitions for specific terms used in the part; a section that 
authorizes the Administrator of APHIS, USDA (Administrator) to assign 
``priority'' status to certain pests and diseases; a section that 
provides criteria for determining the Federal share of emergency 
program costs; a section on funding shortfalls and other funding 
adjustments among cooperating parties; a section on activities not 
subject to cost-sharing; and a section that clarifies the authority of 
the Secretary to implement agreements with respect to funding 
responsibilities of APHIS and other cooperators in carrying out an 
emergency program. These two parts are almost identical in structure 
and content except that 7 CFR part 373 would cover emergency program 
activities carried out under the authority of the Plant Protection Act, 
and 9 CFR part 60 would cover emergency program activities carried out 
under the authority of the Animal Health Protection Act.

Definitions

    Both 7 CFR part 373 and 9 CFR part 60 would begin with a definition 
section, Sec.  373.1 and Sec.  60.1, respectively. The terms defined in 
each section would be the same: Administrator, commencement of the 
emergency program, cooperator(s), emergency program, emergency program 
costs, Federal base percentage, OMB, Secretary, and State.
    Proposed Sec. Sec.  373.1 and 60.1 would define Administrator as 
the Administrator of the Animal and Plant Health Inspection Service, 
United States Department of Agriculture, or any person authorized to 
act for the Administrator.
    In proposed Sec. Sec.  373.1 and 60.1, the term commencement of the 
emergency program would refer to the date that the Secretary determines 
an emergency exists or the date that emergency funding is approved, 
whichever comes first.
    In proposed Sec.  373.1, a cooperator(s) would refer to a State or 
political subdivision of a State, a domestic organization or 
association, or other person who participates in an emergency program 
with the Federal government. To parallel the statutory language found 
in the Animal Health Protection Act, proposed Sec.  60.1 would vary 
slightly from Sec.  373.1 by also referring to Indian tribes.
    In proposed Sec.  373.1, an emergency program would refer to those 
activities carried out under the authority of the Plant Protection Act 
in connection with an emergency, including delimiting surveys; testing 
and related diagnostic activities; regulatory enforcement; chemical, 
biological, mechanical, and other detection, control, and eradication 
activities, including destruction and disposal of plants, plant 
products, and other articles; the payment of compensation; and 
research, methods development, and public information activities 
carried out specifically in connection with an emergency. The proposed 
definition of emergency program in Sec.  60.1 would parallel the 
proposed definition of emergency program in Sec.  373.1 except that 
Sec.  60.1 would refer to the authority of the Animal Health Protection 
Act instead of the Plant Protection Act.
    Proposed Sec. Sec.  373.1 and 60.1 would define emergency program 
costs as financial, personnel, and other resources necessary to carry 
out an emergency program, without regard to the entity or individual 
that provides the resources or the manner in which they are provided.
    Proposed Sec. Sec.  373.1 would define Federal base percentage as 
the initial percentage share of emergency program costs the Secretary 
is authorized to pay in connection with an emergency involving a plant 
pest or noxious weed, while proposed Sec.  60.1 would define the same 
term as the initial percentage share of emergency program costs the 
Secretary is authorized to pay in connection with an emergency 
involving a pest or disease of livestock.
    In proposed Sec. Sec.  373.1 and 60.1, OMB would refer to the 
Office of Management and Budget of the United States Government.
    Proposed Sec. Sec.  373.1 and 60.1 would define State as each of 
the States of the United States, the District of Columbia, Puerto Rico, 
the Northern Mariana Islands, Guam, the Virgin Islands of the United 
States, or any other territory or possession of the United States.
    Finally, proposed Sec. Sec.  373.1 and 60.1 would define Secretary 
as the Secretary of Agriculture of the United States or any officer or 
employee of the United States Department of Agriculture authorized to 
act for the Secretary.

Priority Pests and Diseases

    In proposed Sec.  373.2, the Administrator would be authorized to

[[Page 40545]]

designate certain plant pests and noxious weeds as priority plant pests 
and noxious weeds. In making such a determination, the Administrator 
would consider the degree of contagion and the human health and market 
effects of the plant pest or noxious weed and other relevant factors. 
The Administrator may notify the public from time to time, through 
publication of a list in the Federal Register, of the priority plant 
pests and noxious weeds. Proposed Sec.  60.2 would contain a similar 
provision providing the Administrator with the authority to designate 
certain pests and diseases of livestock as priority pests and diseases 
of livestock. Assuming the final rule is implemented, we intend to 
publish a notice that would list those pests, noxious weeds, and 
diseases that we consider to be priority pests and diseases at the time 
of publication of the final rule.

Federal Share of Emergency Program Costs

    Proposed Sec. Sec.  373.3 and 60.3 would set forth criteria and 
cost-sharing percentages that would be used to determine the Federal 
share of emergency program costs. Both sections are almost identical in 
construction, other than referring to plant pests or noxious weeds (in 
the case of proposed Sec.  373.3) or pests or diseases of livestock (in 
the case of proposed Sec.  60.3).
    Proposed Sec.  373.3(a) would provide that, in connection with an 
emergency involving a plant pest or noxious weed and upon agreement of 
the States or political subdivisions of States, domestic organizations 
or associations, or other persons to participate in an emergency 
program, the Secretary would be authorized to pay, subject to the 
availability of funding, emergency program costs as provided under 
proposed Sec.  373.3(b). Paragraph (a) of Sec.  373.3 would also 
provide that such payments could be made for no more than 10 years (or, 
for emergency programs currently underway, for no more than 5 years 
after the effective date of the final rule), unless the Secretary 
determines that payments for a longer period are necessary. However, if 
the same pest or disease occurs in a location that is geographically 
separate from the original outbreak, or reoccurs in the area of the 
original outbreak following a prescribed time period after eradication 
is completed, as determined by a USDA scientific assessment, then it 
could be considered a new outbreak and subject to new cost-sharing and 
program duration requirements. Proposed Sec.  60.3(a) would provide the 
same requirements. However, in order to parallel the statutory language 
found in the Animal Health Protection Act, Sec.  60.3(a) would vary 
slightly from Sec.  373.3(a) by also referring to Indian tribes among 
the list of cooperators.
    Proposed Sec. Sec.  373.3(b) and 60.3(b) set forth the basic 
criteria for determining the Federal share of costs in an emergency 
program. In connection with an emergency involving a plant pest or 
noxious weed (in the case of proposed 7 CFR part 373), or a pest or 
disease of livestock (in the case of proposed 9 CFR part 60), the 
Secretary could make payments of Federal funds of up to 50 percent of 
emergency program costs. We would refer to this percentage figure as 
the ``Federal base percentage.'' Further, the Secretary, in 
consultation with the Office of Management and Budget (OMB), could 
increase or decrease the Federal share of emergency program costs 
relative to the Federal base percentage as follows:
    [sbull] Timing of program and its effect on total program costs. If 
the Secretary determines that a higher level of Federal involvement in 
the early stages of an emergency program would lead to lower total 
emergency program costs, then the Secretary, in consultation with OMB, 
could increase the Federal share of emergency program costs by up to 30 
percent above the Federal base percentage during the first 8 months 
after commencement of the emergency program, and could increase the 
Federal share of emergency program costs by up to 15 percent above the 
Federal base percentage from the ninth month through the 24th month 
after commencement of the emergency program.
    [sbull] The extent of affected versus nonaffected areas. If the 
Secretary determines that the area or value of resources at risk in the 
United States is at least 10 times greater than the area or value of 
resources covered by the emergency program, then the Secretary, in 
consultation with OMB, could increase the Federal share of emergency 
program costs by up to 20 percent above the Federal base percentage. 
The area or value of resources at risk in the United States would 
include those areas where the pest or disease could spread within 1 
year in the absence of any action to control or eradicate the pest or 
disease. We invite comment on the criteria that would be used in making 
such a determination.
    [sbull] Lack of financial resources. If the Secretary determines 
that a State or other cooperator lacks the financial resources required 
to cover its share of emergency program costs, or lacks the capability 
to quickly access those resources, then the Secretary, in consultation 
with OMB, could increase the Federal share of emergency program costs 
by up to 10 percent above the Federal base percentage during the first 
24 months after commencement of the emergency program. In order to 
qualify for this additional Federal funding, the cooperator would have 
to demonstrate either that a funding body, such as the State 
legislature, was unable to meet in time to provide the necessary 
resources, or that the affected State or local area was experiencing a 
significant and unexpected reduction in resources. We invite comment on 
the proposed criteria for determining a cooperator's lack of financial 
resources, as well as the need for and effect of limiting this higher 
Federal share in the case of a priority pest or disease to the first 24 
months of the emergency program.
    [sbull] Commercial interest. If the Secretary determines that the 
pest or disease directly affects one or more State commercial interests 
within the area covered by the emergency program, then the Secretary, 
in consultation with OMB, could reduce the Federal share of emergency 
program costs by up to 3 percent under the Federal base percentage.
    [sbull] Priority pests and diseases. If the emergency involves a 
priority plant pest or noxious weed (in the case of proposed 7 CFR part 
373) or a priority pest or disease of livestock (in the case of 
proposed 9 CFR part 60), then the Secretary, in consultation with OMB, 
could pay up to 100 percent of the total emergency program costs 
authorized under proposed part 373 or proposed part 60 during the first 
24 months after commencement of the emergency program. We invite 
comment on the need for and effect of limiting this higher Federal 
share in the case of a priority pest or disease to the first 24 months 
of the emergency program.
    [sbull] Certain emergency program activities. We believe that 
particular emergency situations may necessitate deviation from the 
cost-sharing percentages just discussed, either for an entire emergency 
program or for particular activities of an emergency program. 
Therefore, we are proposing that the Secretary may determine, in 
consultation with OMB and the cooperating entities, that an emergency 
program or certain activities within that emergency program be excluded 
from the percentage calculations provided under proposed Sec. Sec.  
373.3(b) and 60.3(b) or, alternatively, be subject to a different 
Federal share of emergency program costs. We expect that such authority 
would be exercised infrequently.
    [sbull] Percentages are cumulative. Any applicable percentage 
changes to the Federal share of emergency program

[[Page 40546]]

costs, as just discussed, would be cumulative, but could not exceed 100 
percent of total emergency program costs authorized under proposed 7 
CFR part 373 or proposed 9 CFR part 60.
    [sbull] Payment of compensation. If the emergency program includes 
the payment of compensation, then the cost-sharing percentage would be 
applied either to the emergency program costs in total (including 
payments of compensation) or to the compensation and non-compensation 
components separately, at the discretion of the Secretary.
    The funding percentages provided in proposed Sec. Sec.  373.3 and 
60.3 would serve as guidelines for the Federal government, States, and 
other cooperator participants to facilitate long-term cooperator 
resource planning and funding decisions, and may vary slightly in 
actual application. The Federal share percentages would not be 
dependent on the source of funds (e.g., transfers from the Commodity 
Credit Corporation, annual appropriations, user fees). Traditionally, 
however, the source of Federal funds in the event of an emergency is 
the Commodity Credit Corporation.
    Proposed Sec. Sec.  373.3(c) and 60.3(c) would provide that the 
Federal share of emergency program costs, as determined under proposed 
Sec. Sec.  373.3(b) and 60.3(b), would be subject to periodic review by 
the Secretary, in consultation with OMB, as conditions warrant.
    We recognize the uncertainties inherent in formulating the specific 
percentages and thresholds in our proposed cost-sharing arrangements, 
and we invite comment and suggestions on alternatives to those proposed 
here. We also recognize that implementing predetermined cost-sharing 
arrangements such as we are proposing is a complex undertaking, 
involving many entities and a variety of legal authorities and 
organizational capabilities. We solicit your comments on the length of 
time necessary to implement these arrangements. We anticipate that a 
minimum of 60 days would be necessary to implement these arrangements 
once the applicable requirements are published as a final rule.

Shortfalls in Obligations and Other Funding Adjustments

    Proposed Sec. Sec.  373.4 and 60.4 would provide that the cost 
allocation assigned to the Federal government and each cooperator would 
be based on cumulative funding over the duration of the emergency 
program. Should the Federal government or any cooperator fail to 
provide adequate program funding to meet their funding obligation for a 
given year, then such funding shortfall would have to be made up prior 
to the end of the emergency program. Similarly, should the shortfall in 
funding by the Federal government or any cooperator require other 
parties to provide funding that exceeds their obligation in any given 
year, then those parties making excess payments in one year would have 
the latitude to reduce their payments in subsequent years in an amount 
that equals the amount of excess payment.
    Proposed Sec. Sec.  373.4 and 60.4 would also provide that, to the 
extent that actual funding levels change, the difference (plus or 
minus) would be applied to the calculation of cumulative funding as 
soon as practicable. In addition, if approved by APHIS in consultation 
with cooperators, any in-kind payment (i.e., in the form of services, 
equipment, etc.) provided by a cooperator could be counted towards 
their funding obligation if the in-kind payment represents an expense 
that is not a normal program cost to the cooperator and directly 
affects emergency program objectives.

Activities Not Subject to Cost Sharing

    Under proposed Sec. Sec.  373.5 and 60.5, certain activities 
conducted by APHIS and other Federal entities that relate to the 
control and eradication of pests and diseases would not be subject to 
the cost-sharing requirements in this proposal. Specifically, the 
Federal government would provide full funding and cost-sharing criteria 
would not apply to control and eradication activities that do not 
directly affect the targeted area, pest, or disease that is the focus 
of the emergency program. For example, this would include national 
surveys and diagnostics; research not specific to the outbreak; public 
awareness not related to the outbreak; control and eradication programs 
in other countries; preclearance of passengers, cargo and means of 
conveyance; and port-of-entry inspection of passengers, cargo and means 
of conveyance.

Implementing Agreements

    As discussed previously under proposed Sec. Sec.  373.3(a) and 
60.3(a), the payment of Federal funds by the Secretary for emergency 
program costs would depend, in part, upon the ``agreement'' of the 
States or other cooperators to participate in the emergency program.
    Proposed Sec. Sec.  373.6 and 60.6 would provide that the Secretary 
may, as a condition of providing the Federal funding pursuant to 
proposed Sec.  373.3 (in the case of emergencies involving plant pests 
and noxious weeds) or Sec.  60.3 (in the case of emergencies involving 
pests and diseases of livestock), enter into agreements with 
cooperating entities. Such agreements would cover the particular 
responsibilities of the cooperating parties, including funding 
obligations, in conducting the emergency program.

Executive Order 12866 and Regulatory Flexibility Act

    This proposed rule has been reviewed under Executive Order 12866. 
The rule has been determined to be significant for purposes of 
Executive Order 12866 and, therefore, has been reviewed by OMB.
    Below is an economic analysis for the proposed rule that would 
establish criteria for determining the share of financial 
responsibility of the Federal government, States, and other cooperators 
should an outbreak of an animal or plant pest or disease occur in the 
United States. The economic analysis provides a cost-benefit analysis 
as required by Executive Order 12866, as well as an analysis of the 
potential economic effects of this proposed rule on small entities, as 
required by the Regulatory Flexibility Act.
    Under the Plant Protection Act (7 U.S.C. 7701-7772) and the Animal 
Health Protection Act (7 U.S.C. 8301-8317), the Secretary of 
Agriculture is authorized to regulate plants and animals, their 
products, and other articles in foreign and interstate commerce; to 
hold, treat, and destroy such articles; and to cooperate with various 
entities, including State and local governments and industry groups 
(cooperators), to carry out programs to detect, control, and eradicate 
plant pests, noxious weeds, and pests and diseases of livestock. These 
Acts also provide the Secretary additional regulatory and funding 
authority, including the payment of compensation, in cases of pest and 
disease emergencies.

Economic Analysis

    The Federal Government, primarily through APHIS, has the statutory 
responsibility to prevent the introduction, spread and establishment of 
pests or diseases of plants and animals in the United States. APHIS 
frequently conducts prevention, detection, control and eradication 
programs in conjunction with State counterparts. In a cooperative 
arrangement, the program funding is generally shared by APHIS and the 
State, where each party is financially responsible for a portion of the 
program

[[Page 40547]]

costs. The funding allocations in these arrangements have varied 
depending upon the specific pest or disease and its location. There 
appears to be a lack of consistent basis for determining how the 
financial responsibility between the Federal Government and its 
cooperator is allocated. This has raised questions regarding the 
appropriate Federal role in light of the large increase in emergency 
funding transfers by APHIS over the past few years.
    This proposed rule sets forth specific cost-sharing percentages to 
apply to certain emergency program activities, including the payment of 
compensation. Greater certainty about cost-sharing would facilitate 
improved planning and funding decisions by the Federal government and 
its cooperators regarding future plant and animal pest and disease 
emergency programs.

Need for Regulation

    The public good aspect of pest and disease management suggests that 
prevention, detection, control, and eradication programs are most 
effectively delivered under governmental guidance. These governmental 
actions confer direct benefits to affected entities and the public at 
large. Without such actions by the Federal Government, States, and 
other cooperators, it is unlikely that affected individuals could or 
would take sufficient actions to prevent the establishment and spread 
of exotic pests and diseases of plants and livestock.
    Some animal pests and diseases threaten not only livestock but also 
wildlife populations that inhabit public land. Certain animal pests and 
diseases may also be transmitted to humans. Because of the interstate 
movement of livestock and poultry through marketing and distribution 
channels, animal pests and diseases are further able to spread rapidly 
beyond a localized area. Rapid response by the Federal Government, 
States, and other cooperators at the first sign of a pest or disease 
outbreak is critical to prevent widespread losses. Greater funding 
certainty would be one way to enhance the timeliness and effectiveness 
of responses to pest or disease outbreaks.
    APHIS, from its inception over 30 years ago, has participated in a 
variety of emergency programs with cooperators to detect, control, and 
eradicate pests and diseases of plants and animals. In the early 1990s, 
emergency programs involving new pest and disease outbreaks were 
largely associated with fruit fly incursions. When a pest was 
introduced into the United States on several occasions in the same 
geographical locations, such as Mediterranean fruit fly (Medfly) in 
Florida and California, Federal and State roles became more defined 
with each reintroduction. Memoranda-of-understanding as well as work 
plans and cost-sharing formulas were agreed upon on an annual basis. 
However, since the mid-1990's, there has been a dramatic increase in 
the number of new pest and disease occurrences beginning with the 
discovery of Karnal bunt in 1995. The cost to the Federal government 
has correspondingly risen as it responds to these emergency outbreaks. 
Given today's highly mobile environment and global agricultural 
economy, the threat to U.S. agricultural and nonagricultural resources 
from new pest and disease incursions is ever present. The need for a 
more consistent and predictable cost allocation approach among program 
participants is warranted in a world of constrained resources.
    Recent occurrences of the highly contagious foot-and-mouth (FMD) 
disease in the United Kingdom and other countries demonstrate the need 
for advanced planning to minimize delays in eradicating an outbreak of 
serious livestock diseases such as FMD. The specific cost-sharing 
percentages between the Federal government and its cooperators as set 
forth in this proposed rule would eliminate uncertainty in program 
funding allocations, which could delay eradication activities. The 
fixed-formula approach to cost-sharing as set forth in this proposed 
rule would make resource planning decisions simpler for all parties and 
lessen the chances for delays in eradication.

Economic Impact

    The intent of the proposed rule is to lessen funding uncertainties 
in conducting emergency programs. An examination of the funding of past 
emergency programs reveals that cost allocations have often been based 
implicitly on three factors: The size of the outbreak, the area at risk 
beyond the initial outbreak, and the commercial interest at stake. The 
specific percentages for cost sharing as provided for in this proposed 
rule incorporate these implicit elements. Particular pest or disease 
outbreaks may necessitate deviations from these percentages. As 
compared to the current flexible cost arrangement, some redistribution 
of costs among cooperators may occur due to the greater specificity in 
cost-sharing percentages. The most significant change in this proposed 
rule would be the provision that stipulates that the amount of Federal 
contribution should be based on a specified duration of an infestation 
or disease occurrence. The Federal government would be less obligated 
financially for emergency programs that are extended in time.
    This proposed rule specifies a base Federal share of up to 50 
percent (i.e., Federal base percentage). If the funding is for an 
emergency situation which has occurred within the previous 8 months, an 
additional allotment of up to 30 percent could be added to the Federal 
base percentage. For emergency programs that are 9 months to 2 years in 
duration, the Federal contribution could be increased by up to 15 
percent above the Federal base percentage. A deduction of up to 3 
percent could be applied in situations where the pest or disease 
affects one or more commercial interests within an area covered by the 
emergency program.
    Pest and disease outbreaks may occur in States that lack the 
resources or the incentive to make large expenditures. Further 
consideration may be given to States that are financially unable to 
contribute. In such cases, the Federal share may increase by up to 10 
percent. Up to 20 percent could also be allotted by the Federal 
government in situations where the pest or disease threat outside the 
outbreak area may be significant. Such was the case with the recent 
outbreak of the Asian longhorned beetle, which affected urban trees in 
New York and Illinois. Should this pest spread to forest trees in the 
affected States and beyond, the impact could be economically and 
environmentally devastating.
    The application of the cost-sharing percentages as specified in 
this proposed rule is anticipated to increase the costs to the Federal 
government in the first 2 years of a pest or disease outbreak because 
of the Federal additional share (i.e., up to 30 percent and 15 percent) 
paid, but may lower costs in subsequent years. Table 2 shows that in FY 
1999, APHIS spent about $46 million in emergency funds for three pest 
outbreaks that would have been subject to the cost-sharing provisions 
as proposed in this rule. The actual Federal share comprised 55 percent 
of total program costs. Cooperators contributed the remaining 45 
percent of overall program costs ($37 million). Due to the detection of 
citrus canker in the previous year, under the proposed rule, the 
Federal cost share in FY 1999 would have been slightly higher by 2 
percent. For FY 2000, the overall Federal contribution to emergency 
programs, if allocated according to the criteria specified in this 
proposed rule, would have been lower by nearly $12 million, and the 
Federal cost-share would have fallen by about 5 percent. In FY 2001, 
the cost savings

[[Page 40548]]

would have been larger. Applying the Federal cost-share rate according 
to the criteria specified in the proposed rule would have saved about 
$64 million in FY 2001, lowering the overall Federal share from 78 
percent (the actual cost share percentage in that year) to 58 percent.
    The adoption of the proposed rule is anticipated to yield savings 
to the Federal Government in future years largely due to the limits 
placed on Federal financial contributions to long-term emergency 
programs, especially those involving commodities with commercial 
interests. As an emergency situation dissipates, a greater share of the 
funding of these extended programs should appropriately be assumed by 
the affected States and other cooperators who, with time, would be in a 
better position to obtain the necessary resources to address a long-
term pest or disease situation.
    Additionally, the increased program effectiveness that is expected 
to result from more reliable State participation and funding certainty 
would yield economic and environmental benefits over the long run. 
These gains are expected to balance the costs to State cooperators from 
redistribution.

                            Table 2.--Distribution of the Federal Share in Emergency Programs, Actual and Under Proposed Rule
                                                                    ($ millions) \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Actual federal share                                                 Federal
                                                      ---------------------------------------- Actual non-    Total      Proposed     share     Savings
                       Program                                                                   Federal     program     Federal      under      under
                                                        Operations   Compensation     Total       share        cost     percentage   proposed   proposed
                                                                                                                          share        rule       rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         FY 1999
--------------------------------------------------------------------------------------------------------------------------------------------------------
ALB 2, 3.............................................        9,010               0      9,010        2,572     11,582           75      8,687        324
Citrus canker........................................       25,000               0     25,000       22,441     47,441           57     27,041     -2,041
Medfly...............................................       11,935               0     11,935       12,353     24,288           47     11,415        520
                                                      --------------
    Total............................................       45,945               0     45,945       37,366     83,311  ...........     47,143     -1,198
% of total...........................................  ...........  ..............        55%  ...........  .........  ...........        57%  .........
------------------------------------------------------
                                                                         FY 2000
--------------------------------------------------------------------------------------------------------------------------------------------------------
ALB 2, 3.............................................       16,180               0     16,180        1,555     17,735           60     10,641      5,539
Belgian sheep........................................        1,400             700      2,100            0      2,100           77      1,617        483
Citrus canker........................................       81,821           9,000     90,821       53,981    144,739           57     82,501      8,320
Pierce's disease.....................................       22,289               0     22,289       32,423     54,712           62     33,921    -11,632
Plum pox virus.......................................        3,653          13,200     16,853        6,800     23,653           62     14,665      2,188
Scrapie 3............................................       11,791           1,200     12,991            0     12,991           47      6,106      6,885
                                                      --------------
    Total............................................      137,134          24,100    161,234       94,696    255,930  ...........    149,451     11,783
% of total...........................................  ...........  ..............        63%  ...........  .........  ...........        58%  .........
------------------------------------------------------
                                                                         FY 2001
--------------------------------------------------------------------------------------------------------------------------------------------------------
ALB 2, 3.............................................       51,698               0     51,698        2,654     54,352           60     32,611     19,087
Belgian sheep........................................        1,578               0      1,578            0      1,578           62        978        600
Bovine TB 4..........................................       14,524          45,600     60,124       10,400     70,524           47     33,146     26,978
Citrus canker........................................       59,574          57,872    117,446       41,235    158,681           62     98,382     19,064
Chronic wasting disease..............................          701           1,950      2,651        2,200      4,851           72      3,493       -842
Karnal bunt..........................................        1,223           6,100      7,323        2,000      9,323           47      4,382      2,941
Plum pox virus.......................................        2,112               0      2,112        2,500      4,612           62      2,859       -747
Rabies...............................................        4,200               0      4,200        8,886     13,086           52      6,805     -2,605
                                                      --------------
    Total............................................      135,610         111,522    247,132       69,875    317,007  ...........    182,657     64,475
% of total...........................................  ...........  ..............        78%  ...........  .........  ...........        58%  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Unless otherwise indicated, Federal expenditures for emergency programs are based on transfer funds from the CCC. These figures represent funds
  available for use in a fiscal year.
\2\ ALB = Asian longhorned beetle.
\3\ The actual Federal share included funds from CCC transfers and agency-level appropriated funds available for emergency activities.
\4\ TB = Tuberculosis.

Economic Effects on Small Entities

    The Regulatory Flexibility Act requires that agencies specifically 
consider the economic effect of their rules on small entities. The 
Small Business Administration (SBA) has established guidelines for 
determining when establishments are to be considered small under the 
Act. This proposed rule is not expected to directly affect commercial 
entities as defined by the SBA.
    Under these circumstances, the Administrator of the Animal and 
Plant Health Inspection Service has determined that this action would 
not have a significant impact on a substantial number of small 
entities.

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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. If this proposed rule is adopted: (1) All State 
and local laws and regulations that are inconsistent with

[[Page 40549]]

this rule will be preempted; (2) no retroactive effect will be given to 
this rule; and (3) administrative proceedings will not be required 
before parties may file suit in court challenging this rule.

Executive Order 13132

    We have reviewed this proposed rule under Executive Order 13132 and 
determined that it does not have sufficient federalism implications to 
warrant the preparation of a federalism assessment. The provisions 
contained in this proposed rule would not have a substantial direct 
effect on States or their political subdivisions, or on the 
distribution of power and responsibilities among the various levels of 
government.
    The Administrator has examined the federalism implications of the 
requirements in this proposal, i.e., criteria for determining the 
Federal share of emergency program costs relative to States and other 
cooperators in the event of animal or plant pest or disease outbreak in 
the United States. The Administrator believes that this action adheres 
to Constitutional principles for the exercise of Federal power and is 
clearly authorized by statutory authorities delegated to APHIS.
    This proposed action focuses primarily on the criteria and cost-
sharing percentages that would be used to determine the Federal share 
of emergency program costs. The proposed rule does not absolutely 
impose any new compliance costs on States or local governments or 
require that States or local governments incur new costs in support of 
emergency programs to prevent, detect, control, or eradicate disease.
    APHIS already conducts cooperative control and eradication programs 
in conjunction with State counterparts and other cooperators. In a 
cooperative arrangement, program funding is generally shared by APHIS 
and the State, with each party being financially responsible for a 
portion of the program costs. The cost-sharing arrangements generally 
have been the result of case-by-case negotiations between APHIS and 
cooperators. The funding allocations in these arrangements have varied 
depending on the specific pest or disease and its location. We believe 
that establishing criteria, including predetermined percentages of the 
Federal share of program costs, will foster greater certainty about 
emergency program cost sharing and facilitate improved planning and 
funding decisions by the Federal government and its cooperators.
    State and local governments have the opportunity to comment on this 
proposed rule, and we encourage them to submit comments on federalism 
concerns or any other issues.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, tribal 
governments, and the private sector. Under section 202 of the UMRA, 
APHIS generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires APHIS to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, more cost-effective, or least burdensome alternative that 
achieves the objectives of the rule.
    We do not expect, based on historical data, that this proposed rule 
would contain Federal mandates (under the regulatory provisions of 
Title II of the UMRA) that may result in new expenditures by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100 million or more in any one year. Thus, this proposed 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.

Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection or 
recordkeeping requirements included in this proposed rule have been 
submitted for approval to the Office of Management and Budget (OMB). 
Please send written comments to the Office of Information and 
Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, 
DC 20503. Please state that your comments refer to Docket No. 02-062-1. 
Please send a copy of your comments to: (1) Docket No. 02-062-1, 
Regulatory Analysis and Development, PPD, APHIS, Station 3C71, 4700 
River Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance 
Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue 
SW., Washington, DC 20250. A comment to OMB is best assured of having 
its full effect if OMB receives it within 30 days of publication of 
this proposed rule.
    The Secretary of Agriculture may, as a condition of providing 
Federal funding under proposed 7 CFR part 373 and proposed 9 CFR part 
60, enter into agreements with States and other cooperating entities. 
Such agreements would specify the particular responsibilities, 
including funding obligations, of the Federal Government and 
cooperators in conducting the emergency program. Such agreements also 
could impose other information collection and recordkeeping 
requirements on affected States or other cooperating entities. We are 
therefore asking OMB to approve, for 3 years, our use of this 
information collection.
    We are soliciting comments from the public (as well as affected 
agencies) concerning our proposed information collection and 
recordkeeping requirements. These comments will help us:
    (1) Evaluate whether the proposed information collection is 
necessary for the proper performance of our agency's functions, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of our estimate of the burden of the 
proposed information collection, including the validity of the 
methodology and assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the information collection on those who 
are to respond (such as through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology; e.g., permitting electronic 
submission of responses).

    Note: Our estimate below shows a minimal burden of 1 hour total 
because the need for States or other cooperating entities to enter 
into such agreements, as described above, would be at the 
Secretary's discretion. Further, the scope and nature of the 
potential information collection or recordkeeping burden, if any, 
would depend on the particular agreement. Therefore, we currently 
are not collecting information until the Secretary enters into such 
agreements with cooperators. At that time, we will describe any 
specific burden, as well as the estimated number of respondents and 
estimated burden accordingly based on the number of expected 
respondents.

    Estimate of burden: Public reporting burden for this collection of 
information is estimated to average 1.0 hour per response.
    Respondents: States and other cooperating entities who enter into 
agreements with the Secretary of Agriculture in connection with an 
emergency program involving a plant

[[Page 40550]]

pest or noxious weed or a pest or disease of livestock.
    Estimated annual number of respondents: 1.
    Estimated annual number of responses per respondent: 1.
    Estimated annual number of responses: 1.
    Estimated total annual burden on respondents: 1 hour.
    Copies of this information collection can be obtained from Mrs. 
Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 
734-7477.

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 proposed rule, please contact Mrs. Celeste 
Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477.

List of Subjects

7 CFR Part 373

    Indemnity payments, Plant diseases and pests, Plant products, 
Plants (Agriculture).

9 CFR Part 60

    Animal diseases and pests, Indemnity payments, Livestock, Poultry 
and poultry products.

    Accordingly, we propose to amend 7 CFR chapter III by adding a new 
part 373, and to amend 9 CFR chapter I, subchapter B, by adding a new 
part 60 to read as follows:

PART 373--COST SHARING FOR PLANT HEALTH EMERGENCY PROGRAMS

Sec.
373.1 Definitions.
373.2 Priority plant pests and noxious weeds.
373.3 Federal share of emergency program costs.
373.4 Shortfall in obligations and other funding adjustments.
373.5 Activities not subject to cost sharing.
373.6 Implementing agreements.

    Authority: 7 U.S.C. 7701-7772; 7 CFR 2.22, 2.80, and 371.3.


Sec.  373.1  Definitions.

    Administrator. The Administrator of the Animal and Plant Health 
Inspection Service, United States Department of Agriculture, or any 
person authorized to act for the Administrator.
    Commencement of the emergency program. The date that the Secretary 
determines an emergency exists or the date that emergency funding is 
approved, whichever comes first.
    Cooperator(s). A State or political subdivision of a State, a 
domestic organization or association, or other person who participates 
in an emergency program with the Federal Government.
    Emergency program. Activities carried out under the authority of 
the Plant Protection Act (7 U.S.C. 7701-7772) in connection with an 
emergency, including delimiting surveys; testing and related diagnostic 
activities; regulatory enforcement; chemical, biological, mechanical, 
and other detection, control, and eradication activities, including 
destruction and disposal of plants, plant products, and other articles; 
the payment of compensation; and research, methods development, and 
public information activities carried out specifically in connection 
with an emergency.
    Emergency program costs. Financial, personnel, and other resources 
necessary to carry out an emergency program, without regard to the 
entity or individual that provides the resources or the manner in which 
they are provided.
    Federal base percentage. The initial percentage share of emergency 
program costs the Secretary is authorized to pay in connection with an 
emergency involving a plant pest or noxious weed.
    OMB. The Office of Management and Budget of the United States 
Government.
    Secretary. The Secretary of Agriculture of the United States or any 
officer or employee of the United States Department of Agriculture 
authorized to act for the Secretary.
    State. Each of the States of the United States, the District of 
Columbia, Puerto Rico, the Northern Mariana Islands, Guam, the Virgin 
Islands of the United States, or any other territory or possession of 
the United States.


Sec.  373.2  Priority plant pests and noxious weeds.

    The Administrator may identify certain plant pests and noxious 
weeds as priority plant pests and noxious weeds. In making such an 
identification, the Administrator shall consider the degree of 
contagion and the human health and market effects of the plant pest or 
noxious weed and other relevant factors. The Administrator may notify 
the public from time to time, through publication of a list in the 
Federal Register, of the priority plant pests and noxious weeds.


Sec.  373.3  Federal share of emergency program costs.

    (a) General. In connection with an emergency involving a plant pest 
or noxious weed and upon agreement of the States or political 
subdivisions of States, domestic organizations or associations, or 
other persons to participate in an emergency program, the Secretary may 
pay, subject to the availability of funding, emergency program costs as 
provided in paragraph (b) of this section. Unless the Secretary 
determines that payments for a longer period are necessary, such 
payments may be made for no more than 10 years for any emergency 
program, or, for emergency programs begun prior to [effective date of 
final rule], for no more than 5 years after that date. However, if the 
same plant pest or noxious weed occurs in a location that is 
geographically separate from the original outbreak, or reoccurs in the 
area of the original outbreak following a prescribed time period after 
eradication is completed, as determined by a USDA scientific 
assessment, then it could be considered a new outbreak and subject to 
new cost-sharing and program duration requirements.
    (b) Determining Federal share of costs. In connection with an 
emergency involving a plant pest or noxious weed, the Secretary may 
make payments of Federal funds of up to 50 percent (i.e., Federal base 
percentage) of emergency program costs. Further, the Secretary, in 
consultation with OMB, may increase or decrease the Federal share of 
emergency program costs relative to the Federal base percentage as 
follows:
    (1) Timing of program and its effect on total program costs. If the 
Secretary determines that a higher level of Federal involvement in the 
early stages of an emergency program would lead to lower total 
emergency program costs, then the Secretary, in consultation with OMB, 
may increase the Federal share of emergency program costs by up to 30 
percent above the Federal base percentage during the first 8 months 
after commencement of the emergency program, and may increase the 
Federal share of emergency program costs by up to 15 percent above the 
Federal base percentage from the ninth month through the 24th month 
after commencement of the emergency program.
    (2) The extent of affected versus nonaffected areas. If the 
Secretary determines that the area or value of resources at risk in the 
United States is at least 10 times greater than the area or

[[Page 40551]]

value of resources covered by the emergency program, then the 
Secretary, in consultation with OMB, may increase the Federal share of 
emergency program costs by up to 20 percent above the Federal base 
percentage. The area or value of resources at risk in the United States 
includes those areas where the plant pest or noxious weed could spread 
within 1 year in the absence of any action to control or eradicate the 
pest or disease.
    (3) Lack of financial resources. If the Secretary determines that a 
State or other cooperator lacks the financial resources required to 
cover its share of emergency program costs, or lacks the capability to 
quickly access those resources, then the Secretary, in consultation 
with OMB, may increase the Federal share of emergency program costs by 
up to 10 percent above the Federal base percentage during the first 24 
months after commencement of the emergency program. To qualify for this 
additional Federal funding, the cooperator must demonstrate either that 
a funding body, such as the State legislature, is unable to meet in 
time to provide the necessary resources, or that the affected State or 
local area is experiencing a significant and unexpected reduction in 
resources.
    (4) Commercial interest. If the Secretary determines that the plant 
pest or noxious weed directly affects one or more State commercial 
interests within the area covered by the emergency program, then the 
Secretary, in consultation with OMB, may reduce the Federal share of 
emergency program costs by up to 3 percent under the Federal base 
percentage.
    (5) Priority plant pests and noxious weeds. If the emergency 
involves a priority plant pest or noxious weed, as provided in Sec.  
373.2 of this part, then the Secretary, in consultation with OMB, may 
pay up to 100 percent of the total emergency program costs authorized 
under this part during the first 24 months after commencement of the 
emergency program.
    (6) Certain emergency program activities. The Secretary may 
determine, in consultation with OMB and the cooperating entities listed 
in paragraph (a) of this section, that an emergency program or certain 
activities within that emergency program be excluded from the 
percentage calculations provided in this paragraph, or, alternatively, 
be subject to a different Federal share of emergency program costs.
    (7) Percentages are cumulative. Any applicable percentage changes 
to the Federal share of emergency program costs, as provided in 
paragraphs (b)(1) through (b)(6) of this section may be cumulative, but 
may not exceed 100 percent of total emergency program costs authorized 
under this part.
    (8) Payment of compensation. If the emergency program includes the 
payment of compensation, then the cost-sharing percentage will be 
applied either to the emergency program costs in total (including 
payments of compensation) or to the compensation and non-compensation 
components separately, at the discretion of the Secretary.
    (c) Periodic review. The Federal share of emergency program costs, 
as determined under paragraph (b) of this section, is subject to 
periodic review by the Secretary, in consultation with OMB, as 
conditions warrant.


Sec.  373.4  Shortfall in obligations and other funding adjustments.

    (a) The cost allocation assigned to the Federal Government and each 
cooperator is to be based on cumulative funding over the duration of 
the emergency program. Should the Federal Government or any cooperator 
fail to provide adequate program funding to meet their funding 
obligation for a given year, then such funding shortfall must be made 
up prior to the end of the emergency program. Similarly, should the 
shortfall in funding by one or more parties require other parties to 
provide funding that exceeds their obligation in any given year, then 
those parties making excess payments in one year will have the latitude 
to reduce their payments in subsequent years in an amount that equals 
the amount of excess payment.
    (b) To the extent that actual funding levels change, the difference 
(plus or minus) is to be applied to the calculation of cumulative 
funding as soon as practicable. In addition, if approved by APHIS in 
consultation with cooperators, any in-kind payment (i.e., in the form 
of services, equipment, etc.) provided by a cooperator will be counted 
towards their funding obligation if the in-kind payment represents an 
expense that is not a normal program cost to the cooperator and 
directly affects emergency program objectives.


Sec.  373.5  Activities not subject to cost sharing.

    The Federal Government will provide full funding and cost-sharing 
criteria will not apply to control and eradication activities that do 
not directly affect the targeted area, pest, or disease that is the 
focus of the emergency program. This would include, for example, 
national surveys and diagnostics; research not specific to the 
outbreak; public awareness not related to the outbreak; control and 
eradication programs in other countries; preclearance of passengers, 
cargo and means of conveyance; and port-of-entry inspection of 
passengers, cargo and means of conveyance.


Sec.  373.6  Implementing agreements.

    The Secretary may, as a condition of providing the Federal funding 
pursuant to Sec.  373.3, enter into agreements with cooperating 
entities. Such agreements will specify the particular responsibilities, 
including funding responsibilities, of the Federal Government and 
cooperators in conducting the emergency program.

PART 60--COST SHARING FOR ANIMAL HEALTH EMERGENCY PROGRAMS

Sec.
60.1 Definitions.
60.2 Priority pests and diseases of livestock.
60.3 Federal share of emergency program costs.
60.4 Shortfall in obligations and other funding adjustments.
60.5 Activities not subject to cost sharing.
60.6 Implementing agreements.

    Authority: 7 U.S.C. 8301-8317; 7 CFR 2.22, 2.80, and 371.4.


Sec.  60.1  Definitions.

    Administrator. The Administrator of the Animal and Plant Health 
Inspection Service, United States Department of Agriculture, or any 
person authorized to act for the Administrator.
    Commencement of the emergency program. The date that the Secretary 
determines an emergency exists or the date that emergency funding is 
approved, whichever comes first.
    Cooperator(s). A State or political subdivision of a State, a 
domestic organization or association, Indian tribe, or other person who 
participates in an emergency program with the Federal Government.
    Emergency program. Activities carried out under the authority of 
the Animal Health Protection Act in connection with an emergency, 
including delimiting surveys; testing and related diagnostic 
activities; regulatory enforcement; chemical, biological, mechanical, 
and other detection, control, and eradication activities, including 
destruction of animals, animal products, and other articles; the 
payment of compensation; and research, methods development, and public 
information activities carried out specifically in connection with an 
emergency.
    Emergency program costs. Financial, personnel, and other resources

[[Page 40552]]

necessary to carry out an emergency program, without regard to the 
entity or individual that provides the resources or the manner in which 
they are provided.
    Federal base percentage. The initial percentage share of emergency 
program costs the Secretary is authorized to pay in connection with an 
emergency involving a pest or disease of livestock.
    OMB. The Office of Management and Budget of the United States 
Government.
    Secretary. The Secretary of Agriculture of the United States or any 
officer or employee of the United States Department of Agriculture 
authorized to act for the Secretary.
    State. Each of the States of the United States, the District of 
Columbia, Puerto Rico, the Northern Mariana Islands, Guam, and the 
Virgin Islands of the United States, or any other territory or 
possession of the United States.


Sec.  60.2  Priority pests and diseases of livestock.

    The Administrator may identify certain pests and diseases of 
livestock as priority pests and diseases of livestock. In making such 
an identification, the Administrator shall consider the degree of 
contagion and the human health and market effects of the pest or 
disease of livestock and other relevant factors. The Administrator may 
notify the public from time to time, through publication of a list in 
the Federal Register, of the priority pests and diseases of livestock.


Sec.  60.3  Federal share of emergency program costs.

    (a) General. In connection with an emergency involving a pest or 
disease of livestock and upon agreement of the States or political 
subdivisions of States, domestic organizations or associations, Indian 
tribes, or other persons to participate in an emergency program, the 
Secretary may pay, subject to the availability of funding, emergency 
program costs as provided in paragraph (b) of this section. Unless the 
Secretary determines that payments for a longer period are necessary, 
such payments may be made for no more than 10 years for any emergency 
program, or, for emergency programs begun prior to [effective date of 
final rule] for no more than 5 years after that date. However, if the 
same pest or disease of livestock occurs in a location that is 
geographically separate from the original outbreak, or reoccurs in the 
area of the original outbreak following a prescribed time period after 
eradication is completed, as determined by a USDA scientific 
assessment, then it could be considered a new outbreak and subject to 
new cost-sharing and program duration requirements.
    (b) Determining Federal share of costs. In connection with an 
emergency involving a pest or disease of livestock, the Secretary may 
make payments of Federal funds of up to 50 percent (i.e., Federal base 
percentage) of emergency program costs. Further, the Secretary, in 
consultation with OMB, may increase or decrease the Federal share of 
emergency program costs relative to the Federal base percentage as 
follows:
    (1) Timing of program and its effect on total program costs. If the 
Secretary determines that a higher level of Federal involvement in the 
early stages of an emergency program would lead to lower total 
emergency program costs, then the Secretary, in consultation with OMB, 
may increase the Federal share of emergency program costs by up to 30 
percent above the Federal base percentage during the first 8 months 
after commencement of the emergency program, or, alternatively, may 
increase the Federal share of emergency program costs by up to 15 
percent above the Federal base percentage from the ninth month through 
the 24th month after commencement of the emergency program.
    (2) The extent of affected versus nonaffected areas. If the 
Secretary determines that the area or value of resources at risk in the 
United States is at least 10 times greater than the area or value of 
resources covered by the emergency program, then the Secretary, in 
consultation with OMB, may increase the Federal share of emergency 
program costs by up to 20 percent above the Federal base percentage. 
The area or value of resources at risk in the United States includes 
those areas where the pest or disease of livestock could spread within 
1 year in the absence of any action to control or eradicate the pest or 
disease.
    (3) Lack of financial resources. If the Secretary determines that a 
State or other cooperator lacks the financial resources required to 
cover its share of emergency program costs, or lacks the capability to 
quickly access those resources, then the Secretary, in consultation 
with OMB, may increase the Federal share of emergency program costs by 
up to 10 percent above the Federal base percentage during the first 24 
months after commencement of the emergency program. To qualify for this 
additional Federal funding, the cooperator must demonstrate either that 
a funding body, such as the State legislature, is unable to meet in 
time to provide the necessary resources, or that the affected State or 
local area is experiencing a significant and unexpected reduction in 
resources.
    (4) Commercial interest. If the Secretary determines that the pest 
or disease of livestock directly affects one or more State commercial 
interests within the area covered by the emergency program, then the 
Secretary, in consultation with OMB, may reduce the Federal share of 
emergency program costs by up to 3 percent under the Federal base 
percentage.
    (5) Priority pests or diseases of livestock. If the emergency 
involves a priority pest or disease of livestock, as provided in Sec.  
60.2 of this part, then the Secretary, in consultation with OMB, may 
pay up to 100 percent of the total emergency program costs authorized 
under this part during the first 24 months after commencement of the 
emergency program.
    (6) Certain emergency program activities. The Secretary may 
determine, in consultation with OMB and the cooperating entities listed 
in paragraph (a) of this section, that an emergency program or certain 
activities within that emergency program be excluded from the 
percentage calculations provided in this paragraph, or, alternatively, 
be subject to a different Federal share of emergency program costs.
    (7) Percentages are cumulative. Any applicable percentage changes 
to the Federal share of emergency program costs, as provided in 
paragraphs (b)(1) through (b)(6) of this section, may be cumulative, 
but may not exceed 100 percent of total emergency program costs 
authorized under this part.
    (8) Payment of compensation. If the emergency program includes the 
payment of compensation, then the cost-sharing percentage will be 
applied either to the emergency program costs in total (including 
payments of compensation) or to the compensation and non-compensation 
components separately, at the discretion of the Secretary.
    (c) Periodic review. The Federal share of emergency program costs, 
as determined under paragraph (b) of this section, is subject to 
periodic review by the Secretary, in consultation with OMB, as 
conditions warrant.


Sec.  60.4  Shortfall in obligations and other funding adjustments.

    (a) The cost allocation assigned to the Federal Government and each 
cooperator is to be based on cumulative funding over the duration of 
the emergency program. Should the Federal Government or any cooperator 
fail to provide adequate program funding to meet their funding 
obligation for a given year, then such funding shortfall must

[[Page 40553]]

be made up prior to the end of the emergency program. Similarly, should 
the shortfall in funding by one or more parties require other parties 
to provide funding that exceeds their obligation in any given year, 
then those parties making excess payments in one year will have the 
latitude to reduce their payments in subsequent years in an amount that 
equals the amount of excess payment.
    (b) To the extent that actual funding levels change, the difference 
(plus or minus) is to be applied to the calculation of cumulative 
funding as soon as practicable. In addition, if approved by APHIS in 
consultation with cooperators, any in-kind payment (i.e., in the form 
of services, equipment, etc.) provided by a cooperator will be counted 
towards their funding obligation if the in-kind payment represents an 
expense that is not a normal program cost to the cooperator and 
directly affects emergency program objectives.


Sec.  60.5  Activities not subject to cost sharing.

    The Federal Government will provide full funding and cost-sharing 
criteria will not apply to control and eradication activities that do 
not directly affect the targeted area, pest, or disease that is the 
focus of the emergency program. This would include, for example, 
national surveys and diagnostics; research not specific to the 
outbreak; public awareness not related to the outbreak; control and 
eradication programs in other countries; preclearance of passengers, 
cargo and means of conveyance; and port-of-entry inspection of 
passengers, cargo and means of conveyance.


Sec.  60.6  Implementing agreements.

    The Secretary may, as a condition of providing the Federal funding 
pursuant to Sec.  60.3, enter into agreements with cooperating 
entities. Such agreements will specify the particular responsibilities, 
including funding responsibilities, of the Federal Government and 
cooperators in conducting the emergency program.

    Done in Washington, DC, this 1st day of July 2003.
Bill Hawks,
Under Secretary for Marketing and Regulatory Programs.
[FR Doc. 03-17042 Filed 7-7-03; 8:45 am]
BILLING CODE 3410-34-P