[Federal Register Volume 87, Number 172 (Wednesday, September 7, 2022)]
[Proposed Rules]
[Pages 54633-54636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19260]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 87, No. 172 / Wednesday, September 7, 2022 / 
Proposed Rules  

[[Page 54633]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Parts 50, 51, 52, 52, 54, 55, and 56

[Docket No. APHIS-2021-0010]
RIN 0579-AE65


Animal and Plant Health Inspection Service Indemnity Regulations

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Advance notice of proposed rulemaking and request for comments.

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SUMMARY: We are soliciting public comment on a new approach to 
indemnity value determination and a new framework for the indemnity 
regulations. These parts address payment of indemnity for the 
destruction and disposition of animals the Animal and Plant Health 
Inspection Service (APHIS) classifies as infected with, suspect of, or 
exposed to diseases of concern, to eradicate and control foreign animal 
diseases, emerging diseases, and program diseases. The current 
regulations for valuing animals for the purpose of indemnification vary 
from species to species and, in some cases, disease to disease within a 
species. The new approach would harmonize how APHIS determines animal 
values and deals with costs associated with transportation, cleaning, 
disposal, and other points at which variations occur in how APHIS 
manages indemnity and compensation.

DATES: We will consider all comments that we receive on or before 
November 7, 2022.

ADDRESSES: You may submit comments by either of the following methods:
     Federal eRulemaking Portal: Go to www.regulations.gov. 
Enter APHIS-2021-0010 in the Search field. Select the Documents tab, 
then select the Comment button in the list of documents.
     Postal Mail/Commercial Delivery: Send your comment to 
Docket No. APHIS-2021-0010, Regulatory Analysis and Development, PPD, 
APHIS, Station 3A-03.8, 4700 River Road, Unit 118, Riverdale, MD 20737-
1238.
    Supporting documents and any comments we receive on this docket may 
be viewed at Regulations.gov or in our reading room, which is located 
in Room 1620 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) 799-7039 before coming.

FOR FURTHER INFORMATION CONTACT: Dr. Michael Carter, Commodity Policy 
Advisor, Strategy and Policy, Veterinary Services, 4700 River Road, 
Riverdale MD 20737; Phone: (301) 851-3510.

SUPPLEMENTARY INFORMATION:

Background

    The Animal Health Protection Act (7 U.S.C. 8301-8317) gives 
authority to the Secretary of Agriculture to hold, seize, quarantine, 
treat, destroy, dispose of, or take other remedial action as needed to 
prevent the introduction and spread of livestock pests and diseases 
within the United States. The Act also directs the Secretary to 
compensate the owner of any animal, article, facility, or means of 
conveyance that the Secretary requires to be destroyed. This 
compensation includes the payment of indemnity, which is monetary 
payment made to a livestock owner for animals and animal products taken 
or destroyed to control or eradicate a disease. These authorities have 
been delegated to the Animal and Plant Health Inspection Service 
(APHIS).
    The current regulations for valuing animals for the purpose of 
compensation, known as the indemnity regulations, vary from species to 
species and, in some cases, disease to disease within a species. The 
methods disease programs use range from specifying outdated flat rates 
to requiring in-person appraisal, with in-person appraisal being the 
most common method specified in the regulations.
    In-person appraisal presents some significant difficulties. It 
works best for isolated incidents of slow-moving diseases of livestock. 
However, when APHIS encounters a widespread and fast-moving outbreak, 
such as occurred in 2014-2015 and again in 2022 with highly pathogenic 
avian influenza (HPAI), the rapid transmission of the disease can 
overwhelm the ability to provide timely and complete appraisal of fair 
market value using in-person appraisers. Additionally, third-party 
appraisal requires significant safeguards to ensure transparent and 
equitable appraisal, such as APHIS training of appraisers and robust 
review of records submitted by appraisers, and APHIS' resources to 
provide such safeguards have become increasingly limited over the 
years.
    We are soliciting comments on an approach, discussed below, to 
restructure the indemnity regulations in 9 CFR parts 50 through 56 
(referred to below as the regulations). The regulations currently 
provide for the payment of indemnity to owners of certain animals 
destroyed because APHIS classifies them as infected by, suspect of, or 
exposed to diseases of concern, for the purpose of eradicating and 
controlling foreign animal diseases, emerging diseases, and program 
diseases.
    Part 50 provides conditions for the payment of indemnity for 
animals destroyed because of tuberculosis; part 51 for animals 
destroyed because of brucellosis; and part 52 for swine destroyed 
because of pseudorabies. Part 53 provides conditions for the payment of 
indemnity for animals destroyed because of foreign animal diseases, 
such as foot-and-mouth disease, contagious pleuropneumonia, Newcastle 
disease, HPAI, infectious salmon anemia, spring viremia of carp, as 
well as any other communicable disease of livestock or poultry that the 
Secretary decides constitutes an emergency and threatens the livestock 
or poultry of the United States. Part 54 contains our regulations 
governing indemnification for scrapie in sheep and goats, while part 55 
contains our regulations governing indemnification for chronic wasting 
disease in captive cervids. Finally, part 56 contains our regulations 
governing indemnification for poultry destroyed because of H5/H7 low 
pathogenic avian influenza.
    Within the regulations, many of the processes used for requesting 
and obtaining indemnity are similar from part to part, despite the 
disease agent and species in question differing among

[[Page 54634]]

the parts. For example, the parts generally require requests for 
indemnity to be presented on forms furnished by APHIS,\1\ and they 
require the claimant to report any salvage derived from the sale of the 
animals, any indemnity already paid for the animals by parties other 
than APHIS, and any existing mortgage against the animals.
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    \1\ The paperwork and recordkeeping activities described in this 
document are included under the following OMB control numbers: 0579-
0007, 0579-0047, 0579-0065, 0579-0101, 0579-0146, 0579-0189, 0579-
0192, and 0579-0195.
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    However, while the processes for qualifying for and obtaining 
indemnity are often similar, the processes within the regulations for 
valuing animals for the purpose of indemnification vary from species to 
species and, in some cases, disease to disease within a species. For 
example, whereas the regulations governing indemnification for cattle 
that are destroyed because of exposure to brucellosis allow for either 
a flat rate indemnification or appraisal of fair market value, the 
regulations governing indemnification of cattle destroyed because of 
exposure to tuberculosis require appraisal of fair market value. 
Additionally, while the regulations governing indemnification of cattle 
destroyed because of exposure to tuberculosis specify that the 
appraiser of fair market value must be selected by APHIS, the 
regulations governing indemnification of cattle destroyed because of 
exposure to brucellosis contain no such specification.
    At this time, we are considering two structural changes to the 
indemnity regulations. First, we are considering standardizing use of 
an annual indemnity value table for livestock species. APHIS is also 
contemplating a framework to consolidate all commodity indemnity 
regulations under a single unified section in part 50. Parts 51 through 
56 would be removed, and the numbers reserved.

Indemnity Value Table

    APHIS is considering standardizing use of an annual indemnity value 
table for livestock \2\ species, with allowances for appraisal only 
when an indemnity value cannot be calculated using the tables, or when 
a producer elects to appeal the indemnity value based on extraordinary 
circumstances surrounding the livestock or poultry at issue. The table, 
found at https://www.aphis.usda.gov/animal_health/downloads/usda-commercial-values-2022.pdf, includes explanation of methods of 
calculation and sources. APHIS currently maintains such a table. 
However, because its use is not specified within the regulations, its 
use is not standardized.
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    \2\ Please note that the Animal Health Protection Act, pursuant 
to which authority this document is being issued, defines livestock 
as: ``All farm-raised animals.'' This includes bees, farmed 
aquaculture, poultry, and animals maintained in captivity on a farm.
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    In standardized use of an indemnity value table, the regulations we 
are considering would state that APHIS would determine indemnification 
values annually and publish the values online. Notification of the 
revised values would be provided through a notice published in the 
Federal Register. With this standardization, APHIS would also provide 
indemnity values by animal classes similar to the Farm Service Agency's 
(FSA) Livestock Indemnity Program.\3\ Categories will include animal 
classes such as non-adult (400-799 pounds) beef steers, sire rams of 
breeding age, and ducks 12 months of age or older. APHIS will work with 
other U.S. Department of Agriculture (USDA) agencies to develop common 
methods for determining animal classes and values for the standardized 
table.
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    \3\ The FSA Livestock Indemnity Program regulations are found at 
7 CFR 1416.301 through 1416.306. Further information about the 
program is found at: https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/livestock_indemnity_program_lip-fact_sheet.pdf.
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    A standardized approach would eliminate the different indemnity 
values used in different disease programs for the same species, such as 
in the example above regarding the discrepancy between indemnification 
for brucellosis in cattle and indemnification for tuberculosis in 
cattle. It would also resolve several known operational challenges with 
indemnification based on fair market appraisal by an appraiser. The 
first operational challenge is that appraisal of fair market value by 
an appraiser works best for isolated incidents of significant, but 
slow-moving, diseases of livestock and poultry. When a widespread and 
quickly moving outbreak occurs, such as the 2014-2015 outbreak of HPAI 
in which 7.4 million turkeys and 43 million egg-layers/pullet chickens 
were determined to be affected with HPAI, the rapid transmission of the 
disease can overwhelm the ability to provide timely and complete 
appraisal of fair market value using in-person appraisers. The second 
operational challenge is that a regulatory framework that is based 
primarily on third-party appraisal requires significant safeguards to 
ensure consistent and transparent appraisal, such as APHIS training of 
the appraisers and establishing mechanisms for thorough review of the 
appraisal records submitted to APHIS. APHIS' resources to provide such 
training and review of such records have become extremely limited.
    APHIS seeks public comment on this approach, with a specific focus 
on how this approach may affect members of the public, as well as how 
any alternative suggestions may improve the indemnity regulations.

Consolidation of Indemnity Regulations

    APHIS is also contemplating a framework to consolidate all 
commodity indemnity regulations under a single unified section in part 
50. Parts 51 through 56 would be removed, and the numbers reserved.
    As noted above, many of the sections within parts 51 through 56 
contain substantially similar regulatory provisions regarding the 
process for requesting and obtaining indemnity, and they could be 
consolidated into a single part with minor changes to verbiage and no 
changes to operational practices. The consolidated part would, however, 
harmonize how APHIS addresses value determination, compensation for 
cleaning and disposal, and other instances in which variations occur 
within the current parts.
    While APHIS believes a single harmonized part would effectively 
address most indemnification cases, we are seeking input on whether 
there are any species, commodity classes or intended uses within a 
species, or other considerations that would merit their own part. We 
are also seeking input on any sections where the disease management 
approach could be significantly altered by such consolidation of the 
indemnification process.
    Below, we discuss section by section our current thinking regarding 
a consolidated part 50.

Definitions

    This section would define livestock classes, diseases, and disease 
status important for the interpretation of the regulations. We 
anticipate that the definitions would generally be drawn from and 
consistent with the definitions currently in the regulations. We invite 
comment on whether any of the current definitions should be revised. We 
also invite comment on whether any definitions should be added to those 
currently in the regulations.

Applicability

    This section would list the species and diseases that fall under 
these regulations. Diseases would be reorganized and split into two 
different categories for which APHIS may provide indemnity: (1) Foreign 
animal

[[Page 54635]]

diseases and emerging diseases; and (2) domestic program diseases.
    For the former category, APHIS would maintain a list online of the 
foreign animal diseases and emerging diseases for which we may pay 
indemnity. APHIS would publish changes to the list in a notice in the 
Federal Register and state the basis for the change. As a baseline, 
this list would contain the diseases currently listed in part 53 of the 
regulations (Foot-and-mouth disease, contagious pleuropneumonia, 
Newcastle disease, HPAI, infectious salmon anemia, and spring viremia 
of carp), as well as classical bovine spongiform encephalopathy. The 
regulations would continue to recognize the potential for other 
communicable diseases of livestock or poultry that the Secretary 
decides constitute an emergency and threaten the livestock or poultry 
of the United States.
    In addition to the foreign animal diseases and emerging diseases 
listed above, APHIS would group together the following domestic 
diseases:
     Cattle and Bison: Bovine tuberculosis, bovine brucellosis.
     Captive Cervids: Bovine tuberculosis, bovine brucellosis, 
and chronic wasting disease.
     Goats: Scrapie, bovine tuberculosis, and brucellosis.
     Sheep: Scrapie, bovine tuberculosis, brucellosis.
     Swine: Pseudorabies, brucellosis, and bovine tuberculosis 
when associated with bovine tuberculosis cattle herds.
     Poultry: H5/L7 low pathogenic avian influenza.

Testing and Records of Tests

    This section would discuss requirements for test records that 
document eligibility for indemnity for the animals. Parts 50 and 51 
currently contain such requirements, and they are very similar to each 
other. At this time, we are not considering substantial changes from 
the language already in the regulations. However, we invite public 
comment on any challenges that may have arisen with the current 
requirements and how they might be addressed.

Payments to Owners

    This section would provide for the possibility of compensation to 
owners for costs other than the destruction of the animals, and, if so, 
what costs APHIS could compensate. It would also set forth requirements 
for forms required by APHIS regarding the compensation for animals, the 
cost of disposition of covered animals, the cost of material destroyed, 
and the expenses associated with destruction. This section would 
consolidate existing language from the current regulations; we are not 
considering substantial changes to the current practice. However, we 
again invite public comment on any challenges that may have arisen with 
the current requirements and how they might be addressed.

Claims Not Allowed

    This section would provide additional conditions for certain 
disease agents that affect whether indemnity can be claimed. Again, we 
are not currently considering substantial changes from the requirements 
currently in the regulations but invite public comment on challenges 
associated with the current requirements and how they may be addressed.

Identification

    This section would describe the identification requirements of the 
animals that qualify for indemnification and the timeline for such 
identifications. For those disease programs that do not have 
identification requirements, we would refer to the requirements in 9 
CFR part 86 (the Animal Disease Traceability regulations) for official 
identification. We are also considering removing reactor and suspect 
branding and reactor tags as forms of reactor and suspect 
identification for animals that qualify for indemnification for 
brucellosis because APHIS no longer uses such identification within the 
domestic brucellosis eradication program.

Determination of Indemnity

    APHIS is considering substantial changes to this section. With the 
consolidation of parts 50 to 56, APHIS is proposing to standardize how 
animals are valued for all commodities regardless of disease program. 
As noted above, APHIS is considering generally harmonizing its approach 
to animal valuation with that of FSA. The tables produced by APHIS and 
FSA would use the same calculations and data sets for the value 
determination. APHIS would update the indemnity values for APHIS 
program use annually and post them to the APHIS website. These values 
would be determined by the meat, egg production, and dairy or breeding 
value of the animals using publicly verifiable data sources. Animals 
would be valued in categories by species and type. APHIS has created a 
2022 indemnity values document for commercial production animal 
classes, and it can be viewed on the APHIS website at https://www.aphis.usda.gov/animal_health/downloads/usda-commercial-values-2022.pdf. This document describes in detail how the values for each 
class of animal would be determined.
    When APHIS needs to indemnify a species or class of animal that is 
not listed in the tables (e.g., if an emerging disease were to impact a 
species of livestock for which indemnity is currently not provided, or 
if indemnity were sought for organic animals or animals subject to 
value-added production practices), APHIS would determine whether there 
is sufficient representative data from industry sources and 
professional appraisal groups to determine a national value for the 
species or class of animal. If there is such a national value, APHIS 
would amend the table to add the new category and issue a notice in the 
Federal Register announcing the new values. If APHIS cannot identify a 
national value based on available data, APHIS would require appraisal 
by an APHIS-approved appraiser. This could be an appraiser APHIS 
selects, or alternatively, an appraiser the owner of the animals 
selects and pays, and whom APHIS determines to meet certain 
professional standards and not to be in a material conflict of interest 
in appraising the animals.
    An owner could appeal the indemnity value set forth in a table or 
the appraised value provided by an appraiser selected by APHIS. To do 
so, the owner would have to secure an alternate appraisal by an 
appraiser he or she selects and pays for at his or her own expense. 
APHIS would require that the appraiser meet certain professional 
standards and not to be in a material conflict of interest regarding 
appraising the animals. During an incident requiring remediation, costs 
incurred are the producer's responsibility up to the point the 
necessary indemnity paperwork is signed.
    In addition to general comments about the suitability of this 
approach, APHIS requests comment on whether there are any species or 
classes not covered either by FSA's tables or APHIS' own tables for 
which APHIS should develop a value for indemnification and any 
recommended data sources available for determining national values for 
these classes.

Cap on Values Paid by APHIS

    Currently, APHIS has a cap on several animal commodities, such as 
$3000 for individual cattle under the Tuberculosis Eradication Program. 
However, APHIS is considering removing these since the annual table 
value would be the amount APHIS would indemnify under most 
circumstances. We invite comment on

[[Page 54636]]

whether, if APHIS cannot calculate a table value for the animals, caps 
should be in place and at what values APHIS should set those caps.

Mortgages

    As noted above, the regulations generally require owners to 
indicate whether the animals for which indemnification is being 
requested are subject to any mortgage. We are not currently considering 
substantial changes from the requirements currently in the regulations 
but invite public comment on challenges associated with the current 
requirements and how they may be addressed.

Joint Ownership/Contract Raisers

    The regulations in part 56 provide for payment of indemnity or 
compensation to both poultry owners and contractors who raise poultry 
for others. We are considering whether to expand this to other 
commodities as well since more commodity groups are using contract 
raisers. We are seeking information about how other industries use 
contractors and how indemnification and compensation might work in 
those industries.

Salvage Values

    There are times that the meat from indemnified animals can be 
salvaged during disease eradication efforts. This is part of industry's 
contribution to the indemnification process. This section would 
describe how the amount APHIS pays a producer is modified when value 
from the animals can be salvaged. This section is not expected to 
change significantly from the current regulations, but we invite public 
comment on challenges associated with the current regulations and how 
they may be addressed.

Destruction and Disposal

    Language in this section would largely remain the same with some 
harmonization between the disease programs. For the most part, language 
would be similar to that which is used for herd depopulations. APHIS is 
also considering harmonizing what material qualifies for destruction 
under this section. For example, if APHIS determines that material such 
as feed from premises affected by a foreign animal disease needs to be 
destroyed, APHIS would, in most cases, indemnify it. For program 
diseases, APHIS will need to make this determination for a regulated 
disease on the basis of the disease itself and the likelihood of 
further transmission if the feed or other material is later used.

Cleaning and Disinfection of Premises, Conveyances, and Materials

    APHIS is considering harmonizing the language across all 
commodities as to what cleaning costs are covered when APHIS requires 
cleaning and disinfection prior to repopulating a facility. APHIS 
currently will cover cleaning and disinfection costs after removing 
animals for foreign animal diseases, but not for program diseases. 
Harmonizing across all diseases will likely increase APHIS' costs and 
potentially lower the available funds for indemnifying animals. Again, 
we are inviting public comment on challenges associated with the 
current requirements and whether greater harmonization is needed.

Pre-Exposure Biosecurity Requirements for Herds/Flocks

    Currently, in order for a producer or owner to receive indemnity 
for poultry destroyed because of avian influenza, the producer must 
meet pre-exposure biosecurity requirements. There are similar 
requirements for farmed aquaculture with respect to infectious salmon 
anemia. APHIS is considering expanding this approach to other commodity 
groups. APHIS is seeking input as to whether similar approaches can be 
put in place for other animal commodities and what would constitute 
basic biosecurity protocols as minimum standards. APHIS is also 
interested in the issues and impact this would have on producers for 
each of the commodities if these requirements are included as a 
condition of indemnification.

Post-Exposure Biosecurity Requirements

    Post-exposure biosecurity requirements are already built into the 
various disease programs. In most cases, these are in effect as an 
affected herd or flock plan that the producer must adhere to as a 
condition for future indemnification. APHIS would like to harmonize the 
requirements within animal commodity groups to the extent possible, and 
APHIS seeks public comment on ways by which we might do this.

Environmental Impacts

    APHIS seeks public comment on how the above framework may implicate 
the ``human environment,'' as this phrase is understood within the 
context of the National Environmental Policy Act (NEPA). Comments will 
help inform APHIS as to the applicability of NEPA to modifications to 
the indemnity regulations.

Economic Considerations

    APHIS seeks public comment on economic cost considerations 
associated with the above framework. Particularly, we are interested in 
receiving comment as to whether there are any instances in which the 
proposed approach to calculating indemnity could result in substantial 
economic impacts for producers relative to the current regulations, as 
well as instances in which the consolidation and harmonization 
identified above could result in costs or benefits for affected 
parties.

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

    Done in Washington, DC, this 31st day of August 2022.
Jennifer Moffitt,
Undersecretary, United States Department of Agriculture.
[FR Doc. 2022-19260 Filed 9-6-22; 8:45 am]
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