[Federal Register Volume 68, Number 226 (Monday, November 24, 2003)]
[Rules and Regulations]
[Pages 65831-65833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29232]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 77

[Docket No. 03-005-2]


Tuberculosis in Cattle and Bison; State Designations; California

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Affirmation of interim rule as final rule.

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SUMMARY: We are adopting as a final rule, without change, an interim 
rule that amended the regulations regarding State and zone 
classifications by removing California from the list of accredited-free 
States and adding it to the list of modified accredited advanced 
States. The interim rule was necessary to help prevent the spread of 
tuberculosis because California no longer meets the requirements for 
accredited-free State status.

EFFECTIVE DATE: The interim rule became effective on April 25, 2003.

FOR FURTHER INFORMATION CONTACT: Dr. Terry Beals, Senior Staff 
Veterinarian, Eradication and Surveillance Team, National Center for 
Animal Health Programs, VS, APHIS, 4700 River Road Unit 43, Riverdale, 
MD 20737-1231; (301) 734-5467.

SUPPLEMENTARY INFORMATION:

Background

    In an interim rule effective and published in the Federal Register 
on April 25, 2003 (68 FR 20333-20336, Docket No. 03-005-1), we amended 
the tuberculosis regulations in 9 CFR part 77 (referred to below as the 
regulations) by removing California from the list of

[[Page 65832]]

accredited-free States in Sec.  77.7 and adding it to the list of 
modified accredited advanced States in Sec.  77.9.
    Comments on the interim rule were required to be received on or 
before June 24, 2003. We received three comments by that date. They 
were from a State agricultural agency and two cattle industry groups. 
The comments are discussed below by topic.

Tuberculosis Classification

    Under the regulations in Sec.  77.7(c), if two or more 
tuberculosis-affected herds are detected in an accredited-free State or 
zone within a 48-month period, that State or zone will be removed from 
the list of accredited-free States or zones and will be reclassified as 
modified accredited advanced. All three commenters stated that a 
classification system based solely on an absolute number of affected 
herds does not sufficiently take into consideration State tuberculosis 
mitigation and eradication efforts. We recognize this issue and are 
currently preparing a proposed rule that will address this and other 
aspects of the regulations.

Delay in Compliance

    In our interim rule, we delayed California's compliance date for 
certain identification requirements of the regulations for sexually 
intact heifers, steers, and spayed heifers moving interstate from 
California. We provided for this delay in recognition of the size and 
complexity of the cattle industry in California as well as in the 
interests of equitable treatment for producers in California since we 
had previously delayed the State of Texas's date of compliance with 
those requirements when we changed the classification of Texas from 
accredited-free to modified accredited advanced (see 67 FR 38841-38844, 
Docket No. 02-021-1, published June 6, 2002). The compliance date set 
in our April 2003 interim rule was September 30, 2003, the same 
compliance date given to the State of Texas. All three commenters 
stated that the time allotted for delay in compliance was too short. On 
August 8, 2003, we published a notice in the Federal Register (68 FR 
47201-47202, Docket No. 03-072-1) further delaying the compliance date 
for both States until March 30, 2004.
    Additionally, one commenter stated that, although the delay in 
compliance means that there are no Federally imposed identification 
requirements for certain animals moving interstate, many States have 
ignored the delay in compliance granted by the USDA. We are sensitive 
to this issue and have sought to avoid such situations by holding 
meetings among State veterinarians and other officials in an effort to 
urge States to accept the Federal movement requirements.

Definitions

    Among the requirements that we deferred as part of the delay in 
compliance discussed previously are the identification and 
certification requirements for sexually intact heifers found in Sec.  
77.10(d). In our April 2003 interim rule, we described the 
certification requirements as applying to ``sexually intact heifers 
moving to unapproved feedlots.'' One commenter stated that since the 
term ``unapproved feedlot'' is utilized but not defined in the 
regulations, this creates ambiguity and makes it more difficult to 
understand and uphold the delay in compliance. We apologize for any 
confusion our use of the term ``unapproved feedlot,'' which does not 
appear in the regulations, may have caused. In using the term, we were 
simply attempting to draw a distinction between the requirements at 
Sec.  77.10(b), which covers, in part, the movement of sexually intact 
heifers to approved feedlots, and the requirements at Sec.  77.10(d), 
which covers the movement of those and other animals to other 
destinations, which could include feedlots that are not approved 
feedlots.

Testing Costs

    All three commenters expressed concern with the tuberculin testing 
cost estimates provided in the interim rule's economic analysis. One 
commenter stated that our determination that the identification 
requirements described would not have a significant impact on a 
substantial number of small entities was inaccurate. We are in the 
process of gathering data related to testing and testing costs in order 
to reevaluate our current information on those subjects. With regard to 
the determination of no significant impact on a substantial number of 
small entities, we consider ``significant impact'' to mean that the 
cost of a given action is equal to or greater than the small business's 
profit margin (5 to 10 percent of annual sales). By these standards, 
given the size and profitability of the cattle industry in California, 
this action does not represent a significant impact on a substantial 
number of small entities. A more detailed analysis of this issue can be 
found later in this document under the heading ``Regulatory Flexibility 
Act.''
    Therefore, for the reasons given in the interim rule and in this 
document, we are adopting the interim rule as a final rule without 
change.
    This action also affirms the information contained in the interim 
rule concerning Executive Orders 12866, 12372, and 12988 and the 
Paperwork Reduction Act.
    Further, for this action, the Office of Management and Budget has 
waived its review under Executive Order 12866.

Regulatory Flexibility Act

    This rule affirms an interim rule that amended the regulations by 
removing California from the list of accredited-free States and adding 
it to the list of modified accredited advanced States.
    The following analysis addresses the economic effect of this rule 
on small entities, as required by the Regulatory Flexibility Act.
    On January 1, 2002, there were approximately 22,000 cattle and 
bison operations in California, totaling 5.2 million head. According to 
the National Agricultural Statistics Service, the total cash value of 
cattle in California was over $4.8 billion as of that year. Over 90 
percent of California's cattle operations yield less than $750,000 
annually and are, therefore, considered small entities under criteria 
established by the Small Business Administration.
    The interim rule changed the tuberculosis status of California from 
accredited-free to modified accredited advanced, resulting in 
interstate movement restrictions where none existed previously. 
Specifically, the regulations in Sec.  77.10 require that, for movement 
to certain destinations, animals must test negative to an official 
tuberculin test and/or be officially identified by premises of origin 
identification before interstate movement is permitted.
    The interim rule will prove beneficial by preventing the spread of 
tuberculosis to other areas of the United States. However, the stricter 
requirements for interstate movement will have an economic effect on 
those producers involved in the interstate movement of cattle and bison 
from California. As such, this analysis will focus on the expenses 
incurred by those producers engaged in interstate movement and in 
determining whether those negative impacts are significant.
    The economic analysis prepared for the interim rule estimated the 
costs of tuberculin testing to be approximately $3.76 per animal. 
However, according to the California Department of Food and Agriculture 
(CDFA), in conjunction with the California Cattleman's Association, the 
estimated costs of tuberculosis testing are actually between $7.50 and 
$10 per animal. Also, it is to be noted that the cost of the official 
identification and applicator is borne by the USDA,

[[Page 65833]]

and the only costs incurred by producers are the labor costs of the 
veterinarian associated with applying the eartag. As official 
identification is customarily applied at the same time tuberculin tests 
are performed and read, it is safe to assume that the estimated cost 
between $7.50 and $10 would include the labor costs related to the 
application of official identification.
    On January 1, 2002, the average value per animal in California was 
estimated to be $930, which translates to an average value per 101-head 
herd of about $94,000. Using high-end cost estimates of $10 per animal 
for tuberculosis testing and the cost of official identification, the 
cost of the additional tuberculin testing necessitated by the interim 
rule represents 1.1 percent of the per-head value of cattle. In general 
practice, we assume a regulation that has compliance costs equal to or 
greater than a small business' profit margin, or 5 to 10 percent of 
annual sales, to pose an impact that can be considered ``significant.'' 
\1\ For the purposes of illustration and analysis of the small entity 
impact, if we assume a cattle producer owns only 1 average sized-herd 
of about 101 animals, with annual sales of approximately $94,000, 
compliance costs totaling between $4,700 and $9,400 would qualify as 
posing a ``significant'' economic impact on this entity. In this 
example, the cost of compliance for this producer, using high-end 
estimates and assuming all 101 animals are engaged in interstate 
movement, would total only $1,010, which would not be considered a 
``significant'' economic impact. Of course, in reality, the majority of 
cattle and bison producers in California own more than one-average 
sized herd. However, by presenting an extreme case of a small cattle or 
bison operation, we may address and illustrate that compliance costs 
will not cause a significant economic impact on small entities.
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    \1\ Verkuil, Paul R. ``A Critical Guide to the Regulatory 
Flexibility Act,'' Duke Law Journal, Apr. 1982: 928.
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    Thus, we believe that the added cost of the required tuberculin 
testing and identification is small relative to the average value of 
cattle and bison, representing less than 1 percent of the per-head 
value. In addition, the costs of compliance associated with the interim 
rule will only affect those operations engaged in the interstate 
movement of cattle or bison. Further, since APHIS has delayed the date 
of compliance with the identification requirements in Sec.  77.10(b) 
and (d), the identification costs for sexually intact heifers, steers, 
and spayed heifers moving interstate from the State of California will 
be deferred until at least March 30, 2004.
    Under these circumstances, the Administrator of the Animal and 
Plant Health Inspection Service has determined that this action will 
not have a significant economic impact on a substantial number of small 
entities.

List of Subjects in 9 CFR Part 77

    Animal diseases, Bison, Cattle, Reporting and recordkeeping 
requirements, Transportation, Tuberculosis.

PART 77--TUBERCULOSIS

0
Accordingly, we are adopting as a final rule, without change, the 
interim rule that amended 9 CFR part 77 and that was published at 68 FR 
20333-20336 on April 25, 2003.

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

    Done in Washington, DC, this 18th day of November, 2003.
Kevin Shea,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 03-29232 Filed 11-21-03; 8:45 am]
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