[Federal Register Volume 74, Number 61 (Wednesday, April 1, 2009)]
[Rules and Regulations]
[Pages 14703-14710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7233]



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  Federal Register / Vol. 74, No. 61 / Wednesday, April 1, 2009 / Rules 
and Regulations  

[[Page 14703]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 71

[Docket No. 00-094-2]
RIN 0579-AB84


Interstate Movement of Sheep and Goats

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are amending the regulations regarding the interstate 
movement of animals to add sheep and goats to the approved livestock 
facility agreement. Livestock facilities that handle sheep and goats in 
interstate commerce must meet the requirements for approval including 
complying with this agreement to utilize certain provisions in our 
scrapie regulations that reduce the movement requirements for sheep and 
goats moving to or from these establishments. Such facilities may 
include stockyards, livestock markets, buying stations, concentration 
points, or any other premises where sheep and goats in interstate 
commerce are assembled. Our approval will be contingent on the facility 
operator meeting certain minimum standards and other conditions related 
to the receipt, handling, and release of sheep and goats at the 
facility, as well as complying with certain animal identification and 
recordkeeping requirements. These standards and other conditions will 
serve, in part, to support our regulations relating to the interstate 
movement of sheep and goats in order to control the spread of scrapie, 
a serious disease of sheep and goats.

DATES: Effective Date: May 1, 2009.

FOR FURTHER INFORMATION CONTACT: Dr. Diane Sutton, Senior Staff 
Veterinarian, Ruminant Health Programs, National Center for Animal 
Health Programs, VS, APHIS, 4700 River Road Unit 43, Riverdale, MD 
20737-1236; (301) 734-6954.

SUPPLEMENTARY INFORMATION:

Background

    On August 26, 2004, we published in the Federal Register (69 FR 
52451-52461, Docket No. 00-094-1) a proposed rule to amend our 
regulations governing the interstate movement of sheep and goats to 
require livestock facilities that handle sheep and goats in interstate 
commerce to be approved by the Animal and Plant Health Inspection 
Service (APHIS) if they want to take advantage of provisions in our 
scrapie regulations in 9 CFR part 79 that reduce the movement 
requirements for sheep and goats moving to or from these 
establishments. Approval would be contingent on the facility operator 
meeting certain minimum standards and certain other conditions relating 
to receipt, handling, and release of sheep and goats at the facility, 
as well as complying with certain animal identification and 
recordkeeping requirements. The proposed standards and other conditions 
were based, in part, on our regulations relating to the interstate 
movement of sheep and goats in order to control the spread of scrapie, 
a serious disease of sheep and goats.
    We solicited comments concerning our proposal for 60 days ending 
October 25, 2004. We received nine comments by that date. The comments 
came from private citizens, a livestock marketer and marketing 
association, wool growers associations, a sheep industry association, a 
farm bureau association, and a veterinary medical association. The 
comments generally supported the proposed rule. They did, however, 
raise several issues associated with the proposed rule. Those issues 
are discussed below.
    Some commenters said that the definitions of exposed animal and 
high-risk animal in 9 CFR parts 54 and 79 did not properly describe 
animals that pose a true risk for the spread of scrapie based on 
current science. These commenters stated that genetically resistant 
sheep pose a minimal risk of transmitting scrapie and therefore should 
not be required to be quarantined at assembly points as proposed. In 
addition, the commenters stated that the definitions in the proposed 
rule excluded some animals that could pose a risk, such as genetically 
susceptible animals that have resided on infected premises.
    We agree with the commenters and intend to modify the definitions 
in 9 CFR 54.1 and 79.1 in a future rulemaking. In our proposed rule, we 
proposed requiring exposed sheep that have not also been designated as 
high-risk animals be kept in quarantine pens away from other animals at 
livestock facilities. Because we agree with the commenters that 
genetically resistant exposed sheep pose a minimal risk of transmitting 
scrapie, we have removed the provision from this final rule.
    Some commenters asked for clarification of the term ``breeding 
sheep and goats,'' which is not spelled out in the existing 
regulations. They said that a single, clear definition of breeding 
sheep and goats would help clarify both existing identification 
requirements and the additional requirements described in the proposed 
rule.
    We agree with the commenters and have added the following 
definition of breeding sheep and goats to Sec.  71.1: ``Any sexually 
intact sheep or goat that is not moving either directly to slaughter or 
through one or more restricted sales and/or terminal feedlots and then 
directly to slaughter.''
    Several commenters requested clarification of the definition of a 
facility. The proposed rule suggests that a facility has permanent 
pens, etc., but some commenters stated that some business owners gather 
sheep for resale in interstate commerce using portable pens and loading 
ramps. The commenters believe that this portable equipment should be 
exempt from a definition of a facility.
    Becoming an approved livestock facility for sheep and goats is only 
required if a facility wishes to utilize the provisions in part 79 that 
reduce the movement requirements for animals moving to or from these 
facilities, such as the ability to accept unidentified animals in 
interstate commerce that otherwise would have been required to be 
identified before entering the facility. As such it places no 
additional burden on facilities that are not currently approved, or on 
tent shows or other informal gatherings that use portable equipment.
    A few commenters requested clarification of ``interstate 
commerce,''

[[Page 14704]]

which is defined in part as trade, traffic, or transportation of 
livestock interstate. The commenters noted that some sheep might cross 
State lines without ownership change and noted that there are also 
producers who buy and sell replacement females across State lines. The 
commenters asked if these types of movement are to be exempt from the 
proposed requirements which relate to the inspection of facilities, 
etc. If so, they stated, that exemption needs to be clearly spelled 
out; if not, then an exemption should be provided, as these activities 
by and of themselves are not likely to cause the dissemination of 
scrapie.
    The movement of animals by private agreement or without transfer of 
ownership is governed by the requirements of part 79, and their 
premises of origin are not considered livestock facilities for the 
purposes of Sec.  71.20.
    Some commenters questioned why the proposed rule did not include a 
requirement for high-risk or exposed sheep intended for slaughter to be 
kept in pens apart from the general population of sheep and goats, 
especially those that may return to a farm for breeding. They pointed 
out that if any of these high-risk animals have lambed or may lamb in 
the livestock facility, they could introduce scrapie contamination into 
the environment.
    We agree with the commenters and will revise paragraph (a)(5) of 
Sec.  71.20 to read: ``Any reactor, suspect, exposed, high-risk, or 
scrapie-positive livestock shall be held in quarantined pens apart from 
all other livestock at the facility. This requirement shall not apply 
to scrapie exposed sheep that are not also designated high-risk animals 
or to sheep or goats designated under 9 CFR part 79 as scrapie exposed 
or high-risk animals that either are not pregnant based on the animal 
being male, an owner certification that any female animals have not 
been exposed to a male in the preceding 6 months, or a certificate 
issued by an accredited veterinarian stating that the animals are open; 
or that the animals are under 12 months of age and are not visibly 
pregnant and are maintained in the same pen only with other animals 
that will be moved directly to slaughter or to a terminal feedlot in 
accordance with 9 CFR parts 71 and 79.'' This is intended to prevent 
potential breeding animals from being exposed to scrapie during the 
time they are held in an approved livestock facility while allowing 
exposed and high-risk slaughter lambs and kids to move through markets.
    We will also change 71.20(a)(11) to add ``and the quarantined 
animal gave birth or aborted at the facility'' after ``if the disease 
of concern is scrapie.'' This will significantly reduce the number of 
times the disinfection procedure specified in 9 CFR 54.7(e)(2) will be 
required in addition to the standard disinfection procedure.
    One commenter noted that the proposed rule would require that 
facility operators separate breeding and slaughter animals at all 
times, but questioned how operators are to distinguish between animals 
for breeding and animals for slaughter. The commenter pointed out that 
sorting animals might entail a substantial amount of time being added 
to the check-in process, and that the increased time in unloading at 
the facility could be detrimental to the well-being of the animals.
    In response to this comment, we are changing the wording of Sec.  
71.20(a)(17)(iv) from ``breeding and slaughter animals must be 
separated at all times so that no contact will occur'' to ``sexually 
intact animals that do not meet the requirements of part 79 to be sold 
as breeding animals must be maintained in separate enclosures at all 
times from animals that may be offered for sale as breeding animals 
unless all animals maintained in an enclosure arrived at the facility 
as part of the same consignment and are separated prior to sale.''
    One commenter stated that the market approval requirement to 
provide quarantine pens for reactor, suspect, or exposed sheep or goats 
makes no sense since the approval requirements also prohibit ``the sale 
of any reactor, suspect, or exposed livestock, and any livestock that 
show signs of being infected with any communicable disease.'' The 
commenter asserted that market operators are unlikely to know the 
disease status of the animals entering their market, and even if the 
animals were known to be reactors, exposed, or suspect, the market 
operators would refuse to receive them for sale.
    We agree it is unlikely that these animals would be found at a 
market. However, if they are found, it is important that they be 
segregated. These animals could be placed in a non-species specific 
quarantine pen that could be disinfected after the affected animals 
were removed. An APHIS or State animal health official must be notified 
immediately when such animals are quarantined. We also agree that 
facilities should not have to indicate that they will handle classes of 
animals that are prohibited from sale and are amending Sec.  
71.20(a)(17) accordingly.
    Some commenters said that it is not clear if businesses doing less 
than $750,000 in sales per year will be exempted from the requirements. 
The commenters further said that such small businesses pose little 
threat to the nation's economy because of the transport of sheep 
infected with scrapie and their transactions should be protected.
    The $750,000 figure included in the regulatory flexibility analysis 
for the proposed rule represents the threshold established by the Small 
Business Administration for transition between small and large entities 
and has nothing to do with compliance requirements. Businesses doing 
less that $750,000 in sales per year will not be exempt from these 
regulations.
    Some commenters expressed concern about a lack of resources for 
enforcement and that APHIS will expect the States and private 
enterprise to handle enforcement without offering sufficient funding.
    APHIS establishes the necessary regulations on interstate commerce 
to conduct disease eradication, control, and surveillance programs. The 
States, through cooperative agreements and memorandums of understanding 
with APHIS, support these efforts by promulgating the necessary laws 
and regulations and undertaking associated compliance and enforcement 
activities within the State. The standards that States must meet to 
qualify as Consistent States are described in Sec.  79.6; as we are not 
amending that section in this rule, we do not agree that States are 
being assigned additional enforcement responsibilities. Some States 
currently work collaboratively with APHIS on market approvals and would 
likely continue to do so. Private enterprises are required to comply 
with the regulations, not enforce them.
    One commenter noted that the issue of individual animal 
identification is hampered by the fact that there is no technology 
currently available that is workable at the speed of commerce and is 
affordable to the sheep and goat industry. The commenter stated that 
until a suitable technology is available, APHIS cannot assume that 
individual identification records can be kept on sheep and goats.
    We agree with the commenter that in some circumstances reading and 
recording of pre-existing identification numbers may be impractical and 
are taking steps in conjunction with the sheep and goat industry ID 
working group to identify appropriate ID methods which meet the needs 
of commerce, the needs of disease eradication and surveillance 
programs,

[[Page 14705]]

and the economics of sheep and goat production. As appropriate 
technologies are identified, they will be introduced through the 
scrapie eradication program and industry initiatives. Until this is 
achieved, we will continue to follow the established identification 
requirements in 9 CFR 79.2.
    One commenter asserted that there are incorrect statements made in 
the rule, for example: ``Most of the sheep and lambs shipped for 
immediate slaughter would not be affected by the proposed rule since 
they would not be handled by a livestock market or other assembly point 
en route to the slaughter facility.'' The commenter asserted that most 
sheep and lambs are handled by livestock markets and other assembly 
points (dealers or feed yards) sometime during their lifetimes. As 
supporting evidence, the commenter asserted that of the approximately 
170,595 head of sheep exported to Mexico in 2003, probably 95 percent 
came through a market or some other dealer in Texas. The commenter also 
asserted that many of the kid goats and lambs that are sold for 
immediate slaughter to slaughterhouses all over the United States go 
through markets first.
    We acknowledge the major role of markets in the movement of lambs 
and cull sheep into and through slaughter channels; however, we believe 
it is accurate that more than 50 percent of slaughter animals do not 
move directly to slaughter through livestock facilities that would 
require approval under this rule.
    Some commenters said that there was an inconsistency between the 
current recordkeeping requirements for livestock facilities and the 
proposed requirements, specifically with respect to how long the 
records must be kept. Given this, the commenters stated, clarification 
of the distinction between the recordkeeping schedule for sheep and 
goats and that for other species may be warranted in the final rule.
    Approved markets that handle sheep and goats would have to agree to 
maintain records in a manner consistent with the requirements of the 
scrapie eradication program in 9 CFR part 79. Those recordkeeping 
requirements support the need for tracing activities for a disease with 
an incubation period of 4 to 5 years in most cases.
    Some commenters stated that the current regulations are sufficient 
and that there is no need to add additional requirements. They stated 
that current efforts to eradicate scrapie through genetic selection in 
show animals would do more than any new regulations, and furthermore 
the proposed rule would add to the economic burden on producers and be 
detrimental to the health of the industry.
    In order for the United States to eradicate scrapie, we must be 
able to trace all infected and exposed animals. To do this we need to 
increase compliance with the identification requirements in 9 CFR part 
79. Accelerating the scrapie eradication program could help the United 
States sheep and goat industry to become more competitive in both the 
domestic and global market. Since both actual product quality and 
purchaser's perception of quality contribute to continued market 
acceptance, efforts to eradicate scrapie will serve the economic 
interests of the industry.
    Therefore, for the reasons given in the proposed rule and in this 
document, we are adopting the proposed rule as a final rule, with the 
changes discussed in this document.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be not significant for the purposes of Executive 
Order 12866 and, therefore, has not been reviewed by the Office of 
Management and Budget.
    This final regulatory flexibility analysis examines the rule's 
expected costs and benefits in accordance with requirements of the 
Office of Management and Budget for regulatory analysis and its 
expected impact on small entities, in accordance with the Regulatory 
Flexibility Act. This analysis for the final rule follows an earlier 
analysis that was prepared for the proposed rule, and takes into 
account public comment received in response to the proposed rule. There 
were no public comments in response to the initial regulatory 
flexibility analysis.

Overview of U.S. Sheep and Goat Industry Operations, Inventory, and 
Trade

    Production and trade: As of January 1, 2008, there were 6.055 
million sheep and lambs in 67,160 operations, and values at $836 
million.\1\ This number represented a 1.9 percent inventory decline 
from January 1, 2000. The above total consists of 4.505 million 
breeding sheep and lambs and 1.55 million market sheep. Of the breeding 
sheep, ewes, 1 year old or older, totaled 3.617 million, replacement 
lambs were 0.695 million, and rams totaled 0.193 million.
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    \1\ USDA/NASS, Sheep and Goats, January 2008.
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    Sheep are produced in all parts of the United States, although 
stock levels vary from State to State. Ten States (Colorado, 
California, Idaho, Montana, Iowa, Oregon, South Dakota, Texas, Utah, 
and Wyoming) account for nearly 68 percent of the total inventory, with 
most in the Mountain, North Central, and South Central areas. These 
States also account for about 81 percent of incoming shipments, 
indicating most sheep and sheep meat production activities take place 
in these States.\2\ Northern and southeastern States have the smallest 
sheep populations, accounting only for 7.8 percent of the total.
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    \2\ USDA/NASS, Meat Animal Production, Disposition, and Income: 
2007 Summary, April 2008.
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    A total of about 4.8 million sheep and lambs were marketed in 2007. 
A little over 84 percent of these are lambs and the rest mature sheep. 
Marketing includes animals for slaughter market, younger animals 
shipped to other States for feeding and breeding purposes, and some 
exports. Most animals shipped for immediate slaughter will not be 
affected by this rule. A total of 2.69 million sheep and lambs were 
slaughtered in 2007, of which 95 percent were lambs.\3\
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    \3\ USDA/NASS, Livestock Slaughter: 2007 Summary, March 2008. 
The national average sale price of a sheep between 2003 and 2007 was 
$132 (=(119 + 130 + 141 + 134 + 138)/5) per head (USDA/NASS, 2008 
Agricultural Statistics). Note that these average sale prices 
reflect the sale of millions of slaughter sheep, selling near the 
average price, and a few thousand valuable registered breeding sheep 
selling for much more. The average price for registered breeding 
sheep is in the range of $300, with some selling for thousands of 
dollars (http://showcase.netins.net/web/sam/ccd.htm).
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    In 2002 (the latest year for which detailed data is available for 
goats), there were 91,462 goat operations in the United States, which 
raised about 2.53 million goats, valued at approximately $141 million, 
an increase of about 12 percent from the 1997 level. About 11.9 percent 
were Angora goats, about 11.5 percent were milk goats, and 76.6 percent 
were goats other than Angora or milk-type. The State of Texas accounted 
for about 47 percent of the goat inventory. Other important goat 
raising States are Alabama, California, Georgia, Kentucky, Missouri, 
North Carolina, Oklahoma, and Tennessee. These States together 
represented another 24 percent of the U.S. goat holdings. Goat holdings 
vary in size and degree of commercialization, with many producers 
relying on other sources of income. With an average holding of about 28 
goats, most, if not all, goat operations are relatively small, and are 
classified as small entities with annual sales of $750,000 or less.\4\ 
Of the total

[[Page 14706]]

number of operations, about 74 percent of goat producers were full 
owners, about 21 percent were part owners, and 5 percent were tenants.
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    \4\ The average price for goats between 2003 and 2007 was $72 
(=(63.3 + 67.2 + 75.9 + 78.5 + 74.8)/5) per head USDA/NASS, 2008 
Agricultural Statistics). The annual prices are from various issues 
of Agricultural Statistics. The goat quantities are from the 2002 
Census of Agriculture. As in the case of sheep there is variability 
in the market value of goats. Market values can vary depending on 
whether the animal is a slaughter goat, Angora goat, dairy goat, 
crossbred or purebred, etc. Boer goats are considered to be the most 
expensive goats with some commanding well over $50,000 for one Boer 
buck and over $10,000 for purebred does (www.jackmauldin.com/new.htm).
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    The United States produced about 183 million pounds of lamb and 
mutton in 2007, a decline of about 43 percent from a decade earlier. 
Imports of lamb and mutton increased from 42.1 million pounds in 1991 
to 183.9 million pounds in 2007, an increase of about 337 percent.\5\
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    \5\ USDA/NASS, Livestock Slaughter: 2004 Summary, March 2005; 
USDA/ERS, Livestock, Dairy, and Poultry Outlook/LDP-M-172/October 
17, 2008.
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    An increasing proportion of domestic demand for lamb and mutton is 
met by imports. The share of imports in domestic consumption of lamb 
and mutton increased from about 11 percent in 1991 to about 50 percent 
in 2007. Even with such increased imports both total consumption as 
well as per capita consumption of lamb declined. Total consumption 
declined from about 396 million pounds to 367 million pounds, a decline 
of about 8 percent.

Trade

    The United States has a limited foreign trade both in live sheep 
and goats and their products. Both the sources of imports and 
destination of exports are concentrated in a few countries. During 
calendar year 2007, the U.S. exported 116,618 sheep valued at $8.148 
million (see table 1). Mexico (65,075 head) and Canada (50,808 head) 
accounted for over 95 percent of this total. Other importers were St. 
Vincent and the Grenadines (37), Ecuador (323), the Bahamas (22), and 
Guyana (20). The United States also exported 9,231 goats valued at 
$597,000 in 2007. Again, the primary importers were Mexico (7,211 head) 
and Canada (1,697). Other destinations included St. Vincent and the 
Grenadines, which imported 323 goats.

                               Table 1--Sheep and Goats: Imports and Exports, 2007
----------------------------------------------------------------------------------------------------------------
                                                                                                     Value in
                      Item                            Imports         Exports         Numbers        millions
----------------------------------------------------------------------------------------------------------------
Sheep...........................................              92          $0.058         116,618          $8.148
Goats...........................................              33           0.010           9,231           0.597
                                                 ---------------------------------------------------------------
    Total.......................................             125           0.068         125,849          8.745
----------------------------------------------------------------------------------------------------------------
Source: Global Trade Atlas, November 2008.

    The U.S. imported 92 sheep valued at $58,000 in 2007. The sheep 
imports in 2007 were from Canada (84 head), Australia (6) and New 
Zealand (2). Additionally, the U.S. imported 33 goats valued at $10,000 
in 2007, all from Australia. The average value of an imported sheep 
($630) is higher than the average value of an exported sheep ($70). 
Likewise, the average value of an imported goat ($300) is higher than 
the average value of an exported goat ($65).
    In 2007, the United States imported 207 million pounds of sheep and 
goat meat valued at $490.5 million and exported 9.2 million pounds of 
sheep and goat meat valued at $11.7 million. Most lamb and mutton 
imports came from Australia and New Zealand. The U.S. exports are 
distributed to a larger number of markets.\6\ Since imports of sheep 
and goats represent a very small fraction of domestic supply, most 
interstate movements would involve domestic sheep and goats.
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    \6\ Global Trade Atlas, November 2008.
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Expected Costs and Benefits

    There are currently 107 facilities that handle sheep and 62 
facilities that handle goats moving in interstate commerce. These 
facilities would have to provide access to accredited veterinarians, 
State representatives, and APHIS representatives, as well as comply 
with certain notification requirements with respect to livestock known 
to be infected, exposed, or suspect, or that show signs of being 
infected with a communicable disease if they want to take advantage of 
provisions in our scrapie regulations in 9 CFR part 79 that reduce the 
movement requirements for sheep and goats moving to or from these 
establishments. Such facilities also would have to keep State animal 
health officials and APHIS informed of upcoming sale days at the 
facility. Some of the livestock facilities covered by this rule are 
already subject to these requirements as approved livestock facilities 
handling other classes of livestock.
    To be approved, such livestock facilities also would have to follow 
certain identification, recordkeeping, and handling practices with 
respect to sheep or goats under their control as provided in 9 CFR 
parts 71 and 79. Documents such as weight tickets, sales slips, and 
records of origin, identification, and destination relating to 
livestock at the facility would have to be maintained by the facility 
for a period of 5 years. Some of these requirements are already 
provided for elsewhere in the regulations, and thus would not represent 
a new burden. Still, any new paperwork and administrative burdens may 
result in additional cost to facility operators who find it necessary 
to adjust their operations to meet the new requirements. However, the 
additional activities are not expected to be significant for most 
facilities.
    The livestock facility and its equipment would have to be 
maintained in a state of good repair. Chutes, pens, alleys, and sales 
rings would have to be well constructed and well lighted for the 
inspection, identification, vaccination, testing, and branding of 
livestock. Electrical outlets would have to be provided at the chute 
area for branding purposes. The facility, including yards, docks, pens, 
alleys, sale rings, chutes, scales, means of conveyance, and their 
associated equipment would have to be maintained in a clean and 
sanitary condition. The operator of the facility would be responsible 
for maintaining an adequate supply of disinfectant and serviceable 
equipment for cleaning and disinfection. Meeting these standards could 
entail additional costs for some livestock facilities seeking to 
qualify as approved livestock facilities. Since most of these 
conditions represent good business practices and most facilities 
already follow them, it is not expected to be a significant issue. Most 
of these facilities are already complying with

[[Page 14707]]

these conditions as approved livestock facilities handling other 
classes of livestock. Therefore, this rule should not result in a 
significant effect on facilities conducting their business.
    In addition, as a condition of approval, reactor, suspect, exposed, 
scrapie high-risk, or scrapie-positive livestock would have to be held 
in quarantine pens apart from all other livestock at the facility 
except exposed sheep that are not also high-risk animals or exposed and 
high-risk animals that are segregated from breeding animals and that do 
not pose a significant risk of lambing or kidding while in the 
facility. The quarantine pens in which such animals are held would have 
to be clearly marked and would have to be cleaned and disinfected 
before being used to hold other animals not affected with diseases. The 
quarantine pens would also have to have proper drainage and be 
constructed of materials that are substantially impervious to moisture 
and able to withstand continued cleaning and disinfection. The 
regulations in 9 CFR 71.20(a)(5) already require that approved 
livestock facilities hold any reactor, suspect, or exposed livestock in 
quarantine pens apart from all other livestock at the facility. 
Facilities handling sheep or goats that do not have quarantine pens 
would likely incur a one-time capital investment of about $3,000 to 
$5,000 to install such a pen. Otherwise, the number of reactor, 
suspect, exposed, scrapie high-risk, or scrapie-positive livestock 
handled by approved livestock facilities is expected to be very small, 
and thus quarantining of such animals should not have a significant 
effect on facility operations or economic activity.
    Furthermore, producers who are engaged in intrastate and interstate 
marketing may also pay higher consignment fees as approved facilities 
pass their increased costs of providing services to affected producers. 
Other costs to producers of this action could result for those animals 
requiring special handling at livestock facilities.
    This rule could result in a small increase in the time that APHIS 
and State representatives spend monitoring livestock facilities. In 
those cases where a facility is already operating as an approved 
livestock facility for other classifications of livestock, and APHIS 
and State representatives are already on site, the addition of sheep 
and goats to the classifications of livestock covered by the agreement 
is unlikely to substantially increase the workload for those 
representatives. APHIS and State representatives monitor compliance at 
such facilities with the identification requirements of the scrapie 
regulations in 9 CFR part 79. Thus, any additional monitoring 
responsibilities on the part of State or Federal representatives that 
may result from implementation of this rule could be handled by 
existing staff.
    This rule should not affect the interstate flow of sheep and goats. 
The interstate movement of sheep and goats is important as it reduces 
interstate price differences faced by consumers of livestock products 
and it allows movement of sheep and goats from areas of surplus to 
areas of deficit. A majority of sheep and goats moving across State 
lines are slaughter animals. Although we do not have specific data, 
based on our observation of livestock markets and the sheep and goat 
industry, we believe that most of these slaughter animals move directly 
to the slaughterhouse and bypass the types of livestock facilities that 
are the subject of this rule. In addition, the operators of livestock 
facilities that agree to handle animals affected by scrapie would be 
the entities most affected by this rule. However, the number of sheep 
and goats affected by scrapie and handled by these livestock facilities 
is likely to be very small. This rule should not post a significant 
burden on operators of livestock facilities or producers and is not 
expected to reduce interstate commerce or retard economic availability.
    In spite of the potential small burdens to livestock facility 
operators and producers, the long-term avoided costs of coping with 
losses associated with scrapie by the U.S. sheep and goat industries as 
a result of accelerating the scrapie eradication program far exceed the 
potential costs of this rule. This includes the avoidance of veterinary 
and associated costs for managing scrapie-affected flocks. An APHIS 
estimate showed that scrapie costs the U.S. sheep industry about $24 
million per year in losses. This includes an estimated $10 million in 
lost breeding stock and embryo sales, $10.5 million in disposal costs 
for offal, and $2.8 million in lost meat and bone meal sales.
    Accelerating the eradication of scrapie in the United States also 
could facilitate movement of the U.S. sheep and goat industries toward 
increased competitiveness both in the domestic and global markets, 
particularly in the export of live sheep and goats. Currently, 
producers in countries such as Australia and New Zealand have a 
competitive advantage over U.S. producers, based in part on the absence 
of scrapie in those countries. The achievement of ``scrapie-free'' 
status in the United States could neutralize the competitive advantage 
of such countries.
    Since both actual product quality as well as purchasers' perception 
of quality contribute to continued market acceptance, efforts to 
eradicate scrapie and secure the health of U.S. sheep and goats will 
continue to serve the economic interests of the industry and the 
nation.

Effects on Small Entities

    This rule will affect livestock facilities that handle sheep and 
goats in interstate commerce, including stockyards, livestock markets, 
buying stations, concentration points, or any other premises under 
State or Federal veterinary supervision where sheep or goats have been 
assembled and which choose to become an approved livestock facility. 
These facilities are considered small if they have 100 or fewer 
employees (North American Industry Classification System [NAICS] 
424520).\7\ There are currently about 1,106 livestock facilities that 
handle cattle and calves, swine, or sheep and goats moving in 
interstate commerce. Of this total, about 107 handle sheep and 62 
handle goats, and all are considered to be small entities.
---------------------------------------------------------------------------

    \7\ The Small Business Administration defines small market 
facilities (NAICS 424520) as those having fewer than 100 employees.
---------------------------------------------------------------------------

    Producers of sheep or goats (NAICS 112410) also could be affected 
by the rule if livestock facilities pass on the increased costs of 
providing services attributable to the rule to affected producers. 
There were 44,189 sheep operations and 43,495 goat operations that sold 
animals in 2002. An operation engaged in sheep or goat production is 
considered small if it has annual sales of not more that $750,000.\8\ 
Small operations, as shown in table 2, accounted for over 99 percent of 
all operations that sold sheep and lambs. About 81 percent of the 
producers sold fewer than 100 animals each, but these accounted only 
for about 17 percent of total sales of sheep and lambs. On the other 
hand, large sheep operations that sold 5,000 sheep or more represented 
less than 1 percent of the farms but accounted for about 32 percent of 
the total number sold. The overall average size of a flock was 117 
animals in 2002. The average size of a flock on large operations was 
11,094 animals, while that on small operations was 80 animals. The vast 
majority of sheep and goat producers would be considered small entities 
based on such criteria. Of

[[Page 14708]]

the total number of operations, about 68 percent of producers were full 
owners, about 26 percent were part owners and 6 percent were tenants. 
Approximately 81 percent of these sheep are marketed, involving 
crossing State lines in most cases.
---------------------------------------------------------------------------

    \8\ Based on the size standard established by the Small Business 
Administration for livestock and animal specialties, sheep producers 
(NAICS 112410) and goat producers (NAICS 112420) with not more than 
$0.75 million in annual sales qualify as small entities.

                          Table 2--Sheep and Lambs: Number Sold by Size of Flock: 2002
----------------------------------------------------------------------------------------------------------------
                                                                                  Percent sheep
                                   Number of     Percent farms    Inventory of      and lambs      Average value
Number of sheep/lambs per farm    farms with    (based on total     sheep and    (based on total   per operation
                                  sheep/lambs        farms)           lambs         inventory)
----------------------------------------------------------------------------------------------------------------
1 to 99.......................          35,647             80.7         899,589             17.4          $2,625
100 to 299....................           5,659             12.8         680,404             13.2          12,510
300 to 999....................           1,991              4.5         762,007             14.7          39,800
1,000 to 4,999................             743              1.7       1,181,441             22.8         165,370
5,000 or more.................             149              0.3       1,653,010             31.9       1,153,780
                               ---------------------------------------------------------------------------------
    Total.....................          44,189            100         5,176,451            100           12,180
----------------------------------------------------------------------------------------------------------------
Source: USDA/NASS, 2002 Census of Agriculture.

    Livestock facilities that are considered small entities would have 
to meet the same standards as other larger firms if they choose to 
become an approved facility. This would include following certain 
identification, recordkeeping, and handling practices with respect to 
sheep or goats. Some of these requirements are already provided in part 
79 of the regulations, and thus would not represent a new burden. In 
addition, a certain number of these facilities already comply with many 
of the conditions in this rule in operating as approved livestock 
facilities for other classes of livestock.
    We considered the feasibility of exempting small entities from some 
or all of the requirements in this rule or establishing differing 
compliance or reporting requirements that take into account the 
resources available to small entities. However, one of the aims of an 
effective national program to control and eradicate scrapie is to 
establish uniform standards that will be followed by all livestock 
facilities handling unidentified sheep or goats and animals with a 
certificate of veterinary inspection in interstate commerce. Programs 
relating to disease surveillance and control do not lend themselves to 
different compliance standards based on the size of the entity subject 
to regulation. Also, the requirements in part 79 pertaining to 
identification, recordkeeping, and handling of sheep and goats make no 
distinction as to the size of the producer or other livestock facility 
handling the animals.
    As discussed above, producers who are engaged in intrastate and 
interstate marketing may be indirectly affected by this rule if they 
have to pay higher consignment fees as livestock facilities pass their 
increased costs of providing services. Other costs to producers of this 
action could result for those animals requiring special handling at 
approved livestock facilities. However, because most of the facilities 
that handle sheep and goats are already in compliance with the 
regulations in part 79, the potential costs to sheep and goat producers 
considered small entities should not be significant.
    In sum, it is reasonable to expect that both small and large 
entities would benefit from this rule, which would strengthen scrapie 
control programs resulting in long-term avoided costs of coping with 
market losses associated with scrapie. Direct losses to the U.S. sheep 
industry alone are currently estimated to be as high as $24 million per 
year. We expect any costs to operators of livestock facilities or to 
producers to be more than offset by the added benefits to the industry 
at large in providing a more effective scrapie eradication program.
    The primary alternative to the rule would be to make no changes at 
all to the existing regulations. The regulations in part 79 already 
include certain requirements to be followed by approved livestock 
markets with respect to the identification, recordkeeping and handling 
of sheep and goats in interstate commerce. However, the regulations in 
part 71 do not specify the process by which these facilities are to be 
approved. Therefore, it is imperative that an approval process be added 
to our regulations.
    This rule contains various recordkeeping requirements, which were 
described in our proposed rule and which have been approved by the 
Office of Management and Budget (see ``Paperwork Reduction Act'' 
below).

Executive Order 12372

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

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule: (1) Preempts all State and local laws 
and regulations that are in conflict with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule.

National Environmental Policy Act

    An environmental assessment and finding of no significant impact 
have been prepared for this final rule. The environmental assessment 
provides a basis for the conclusion that the APHIS approval of 
livestock facilities that handle sheep and goats in interstate commerce 
under the conditions specified in this rule will not have a significant 
impact on the quality of the human environment. Based on the finding of 
no significant impact, the Administrator of the Animal and Plant Health 
Inspection Service has determined that an environmental impact 
statement need not be prepared.
    The environmental assessment and finding of no significant impact 
were prepared in accordance with: (1) The National Environmental Policy 
Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq.), (2) 
regulations of the Council on Environmental Quality for implementing 
the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA 
regulations implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA 
Implementing Procedures (7 CFR part 372).
    The environmental assessment and finding of no significant impact 
may be viewed on the Regulations.gov Web

[[Page 14709]]

site.\9\ Copies of the environmental assessment and finding of no 
significant impact are also available for public inspection at USDA, 
room 1141, South Building, 14th Street and Independence Avenue, SW., 
Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, 
except holidays. Persons wishing to inspect copies are requested to 
call ahead on (202) 690-2817 to facilitate entry into the reading room. 
In addition, copies may be obtained by writing to the individual listed 
under FOR FURTHER INFORMATION CONTACT.
---------------------------------------------------------------------------

    \9\ Go to http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2007-0069. The environmental 
assessment and finding of no significant impact will appear in the 
resulting list of documents.
---------------------------------------------------------------------------

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the information collection or recordkeeping requirements 
included in this rule have been approved by the Office of Management 
and Budget (OMB) under OMB control number 0579-0258.

E-Government Act Compliance

    The Animal and Plant Health Inspection Service is committed to 
compliance with the E-Government Act to promote the use of the Internet 
and other information technologies, to provide increased opportunities 
for citizen access to Government information and services, and for 
other purposes. For information pertinent to E-Government Act 
compliance related to this final rule, please contact Mrs. Celeste 
Sickles, APHIS' Information Collection Coordinator, at (301) 851-2908.

List of Subjects in 9 CFR Part 71

    Animal diseases, Livestock, Poultry and poultry products, 
Quarantine, Reporting and recordkeeping requirements, Transportation.

0
Accordingly, we are amending 9 CFR part 71 as follows:

PART 71--GENERAL PROVISIONS

0
1. The authority citation for part 71 continues to read as follows:

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


0
2. Section 71.1 is amended by revising the definitions of Accredited 
veterinarian, Area veterinarian in charge, Interstate commerce, 
Livestock, State, State animal health official, and State 
representative and by adding, in alphabetical order, new definitions 
for Breeding sheep and goats, Consistent States and Inconsistent States 
to read as follows:


Sec.  71.1   Definitions.

* * * * *
    Accredited veterinarian. A veterinarian who is approved by the 
Administrator, in accordance with part 161 of this chapter, to perform 
official animal health work of the Animal and Plant Health Inspection 
Service specified in subchapters A, B, C, and D of this chapter and to 
perform work required by cooperative State-Federal disease control and 
eradication programs.
* * * * *
    Area veterinarian in charge. The veterinary official of APHIS who 
is assigned by the Administrator to supervise and perform the official 
animal health work of the Animal and Plant Health Inspection Service in 
the State concerned.
* * * * *
    Breeding sheep and goats. Any sexually intact sheep or goat that is 
not moving either directly to slaughter or through one or more 
restricted sales and/or terminal feedlots and then directly to 
slaughter.
* * * * *
    Consistent States. Those States listed as consistent States in 
Sec.  79.1 of this subchapter because they meet certain standards, as 
provided in Sec.  79.6 of this subchapter, for conducting an active 
State scrapie program involving the identification of scrapie in sheep 
and goats for the purpose of controlling the spread of scrapie.
* * * * *
    Inconsistent States. Those States not included in the list of 
consistent States appearing in Sec.  79.1 of this subchapter.
* * * * *
    Interstate commerce. Trade, traffic, transportation, or other 
commerce between a place in a State and any place outside of that 
State, or between points within a State but through any place outside 
of that State.
* * * * *
    Livestock. Horses, cattle, bison, cervids, camelids, sheep, goats, 
swine, and other farm-raised animals.
* * * * *
    State. Any of the 50 States, the Commonwealth of Puerto Rico, the 
Commonwealth of the Northern Mariana Islands, the District of Columbia, 
and any territories and possessions of the United States.
    State animal health official. The State official responsible for 
livestock and poultry disease control and eradication programs.
    State representative. An individual employed in animal health work 
by a State or a political subdivision thereof and authorized by such 
State or political subdivision to perform the function involved.
* * * * *

0
3. Section 71.3 is amended by reserving paragraph (c)(5) and by adding 
a new paragraph (c)(6) to read as follows:


Sec.  71.3  Interstate movement of diseased animals and poultry 
generally prohibited.

* * * * *
    (c) * * *
    (6) Sheep or goats designated, with regard to scrapie, as exposed 
animals, high-risk animals, suspect animals, or scrapie-positive 
animals, as those terms are defined in part 79 of this subchapter, may 
be moved interstate only in accordance with part 79 of this subchapter.
* * * * *


Sec.  71.6  [Amended]

0
4. In Sec.  71.6, paragraph (a), the first sentence is amended by 
adding the word ``goats,'' immediately after the word ``sheep,''.


Sec.  71.19  [Amended]

0
5. In Sec.  71.19, paragraph (d), the introductory text is amended by 
removing the words ``Area Veterinarian in Charge'' both times it 
appears and adding the words ``area veterinarian in charge'' in their 
place.

0
6. Section Sec.  71.20 is amended as follows:
0
a. In paragraph (a)(3), by adding the number ``79,'' immediately after 
the number ``78,''.
0
b. In paragraph (a)(4), by adding the words ``high-risk and scrapie-
positive'' immediately after the word ``exposed,''.
0
c. By revising paragraphs (a)(5), (a)(6), (a)(7), and (a)(11) to read 
as set forth below.
0
d. In paragraph (a)(8), by adding the number ``79,'' immediately after 
the number ``78,''.
0
e. In paragraph (a)(12), by removing the words ``or suspect, or 
exposed'' and adding in their place the words ``suspect, exposed, high-
risk, or scrapie-positive''.
0
f. By redesignating paragraphs (a)(17) through (a)(20) as paragraphs 
(a)(18) through (a)(21), respectively, and adding a new paragraph 
(a)(17) before the undesignated center heading ``Approvals'' to read as 
set forth below.
0
g. By revising newly redesignated paragraph (a)(18) to read as set 
forth below.

[[Page 14710]]

0
h. By adding a parenthetical containing an OMB citation at the end of 
the section to read as set forth below.


Sec.  71.20  Approval of livestock facilities.

    * * *
    (5) Any reactor, suspect, exposed, high-risk, or scrapie positive 
livestock shall be held in quarantined pens apart from all other 
livestock at the facility. This requirement shall not apply to scrapie-
exposed sheep that are not also designated high-risk animals or to 
sheep or goats designated under 9 CFR part 79 as scrapie-exposed or 
high-risk animals that either are not pregnant based on the animal 
being male, an owner certification that any female animals have not 
been exposed to a male in the preceding 6 months, or a certificate 
issued by an accredited veterinarian stating the animals are open; or 
that the animals are under 12 months of age and are not visibly 
pregnant and are maintained in the same pen only with other animals 
that will be moved directly to slaughter or to a terminal feedlot in 
accordance with 9 CFR parts 71 and 79.
    (6) No reactor, suspect, exposed, high-risk, or scrapie-positive 
livestock, nor any livestock that show signs of being infected with any 
infectious, contagious, or communicable disease, may be sold at or 
moved from the facility, except in accordance with 9 CFR parts 71, 75, 
78, 79, and 85.

Records

    (7) Documents such as weight tickets, sales slips, and records of 
origin, identification, and destination that relate to livestock that 
are in, or that have been in, the facility shall be maintained by the 
facility for a period of 2 years, or for a period of 5 years in the 
case of sheep or goats. APHIS representatives and State representatives 
shall be permitted to review and copy those documents during normal 
business hours.
* * * * *
    (11) Quarantined pens shall be clearly labeled with paint or 
placarded with the word ``Quarantined'' or the name of the disease of 
concern, and shall be cleaned and disinfected in accordance with 9 CFR 
part 71 as well as 9 CFR 54.7(e)(2) if the disease of concern is 
scrapie and the quarantined animal gave birth or aborted at the 
facility, before being used to pen livestock that are not reactor, 
suspect, exposed, high-risk, or scrapie-positive animals.
* * * * *
    (17) Sheep and goats:

--This facility will handle breeding sheep or goats: [Initials of 
operator, date]
--This facility will handle slaughter sheep or goats: [Initials of 
operator, date]
--This facility will handle scrapie-exposed goats or high-risk sheep or 
goats: [Initials of operator, date]
--This facility will not handle goats known to be scrapie-exposed or 
sheep or goats known to be high-risk animals, nor permit such animals 
to enter the facility: [Initials of operator, date]

    (i) All sheep and goats must be received, handled, and released by 
the facility only in accordance with 9 CFR parts 71 and 79.
    (ii) All sheep and goats at the facility must be officially 
identified and relevant records related to those identified animals 
must be maintained by the facility operator, as required under 9 CFR 
part 79.
    (iii) The identity of sheep and goats from consistent States and 
inconsistent States must be maintained by the facility operator.
    (iv) Sexually intact animals that do not meet the requirements of 
part 79 to be sold as breeding animals must be maintained in separated 
enclosures at all times from animals that may be offered for sale as 
breeding animals unless all animals maintained in an enclosure arrived 
at the facility as part of the same consignment and are separated prior 
to sale.
    (v) Any sheep or goats that are designated, with regard to scrapie, 
as high-risk, suspect or scrapie-positive animals, and goats designated 
with regard to scrapie as exposed animals, excluding slaughter sheep or 
goats that are designated as exposed or high-risk animals and are not 
pregnant, must be held in quarantined pens while at the facility.

Approvals

    (18) Request for approval:
    I hereby request approval for this facility to operate as an 
approved livestock facility for the classes of livestock indicated in 
paragraphs (14) through (17) of this agreement. I acknowledge that I 
have received a copy of 9 CFR parts 71, 75, 78, 79, and 85, and 
acknowledge that I have been informed and understand that failure to 
abide by the provisions of this agreement and the applicable provisions 
of 9 CFR parts 71, 75, 78, 79, and 85 constitutes a basis for the 
withdrawal of this approval. [Printed name and signature of operator, 
date of signature]
* * * * *
(Approved by the Office of Management and Budget under control number 
0579-0258)

    Done in Washington, DC, this 26th day of March 2009.
Kevin Shea,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. E9-7233 Filed 3-31-09; 8:45 am]
BILLING CODE 3410-34-P