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.

Proposed Rules Federal Register

42195 

Vol. 77, No. 138 

Wednesday, July 18, 2012 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

9 CFR Part 107 

[Docket No. APHIS–2011–0048] 

RIN 0579–AD66 

Viruses, Serums, Toxins, and 

Analogous Products; Exemptions 

From Preparation Pursuant to an 

Unsuspended and Unrevoked License 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Proposed rule. 

SUMMARY: We are proposing to amend 

the Virus-Serum-Toxin Act regulations 

to require that veterinary biologics 

prepared under the veterinary 

practitioner exemption must be 

prepared at the same facility the 

veterinarian utilizes in conducting the 

day-to-day activities associated with his 

or her practice. This exemption applies 

to veterinary biologics prepared by a 

veterinary practitioner solely for 

administration to animals in the course 

of a State-licensed professional practice 

of veterinary medicine under a 

veterinarian-client-patient relationship. 

This proposed amendment is necessary 

to ensure that veterinary biologics are 

not prepared in unlicensed 

establishments in violation of the VirusSerum-Toxin Act. The effect of the 

proposed amendment would be to 

clarify the regulations regarding the 

preparation of product by a veterinary 

practitioner under a veterinarian-clientpatient relationship. 

DATES: We will consider all comments 

that we receive on or before September 

17, 2012. 

ADDRESSES: You may submit comments 

by either of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov/ 

#!documentDetail;D=APHIS-2011-0048- 

0001. 

• Postal Mail/Commercial Delivery: 

Send your comment to Docket No. 

APHIS–2011–0048, 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 http:// 

www.regulations.gov/ 

#!docketDetail;D=APHIS-2011-0048 or 

in our reading room, which is located in 

room 1141 of the USDA South Building, 

14th Street and Independence Avenue 

SW., Washington, DC. Normal reading 

room hours are 8 a.m. to 4:30 p.m., 

Monday through Friday, except 

holidays. To be sure someone is there to 

help you, please call (202) 799–7039 

before coming. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Donna Malloy, Operational Support 

Section, Center for Veterinary Biologics, 

Policy, Evaluation, and Licensing, VS, 

APHIS, 4700 River Road Unit 148, 

Riverdale, MD 20737–1231; phone (301) 

851–3426, fax (301) 734–4314. 

SUPPLEMENTARY INFORMATION: 

Background 

The regulations in Title 9, Code of 

Federal Regulations (9 CFR), parts 101– 

118 (referred to below as the 

regulations) contain provisions 

implementing the Virus-Serum-Toxin 

Act (the Act), as amended (21 U.S.C. 

151–159). These regulations are 

administered by the Animal and Plant 

Health Inspection Service (APHIS) of 

the U.S. Department of Agriculture 

(USDA). The Act prohibits the 

preparation, sale, and shipment of 

veterinary biological products in or from 

the United States unless such products 

have been prepared under and in 

compliance with USDA regulations at 

an establishment holding an 

unsuspended and unrevoked license 

issued by USDA. 

In part 102 of the regulations, §§ 102.1 

and 102.2 require that each 

establishment and every person 

preparing biological products subject to 

the Act must hold an unexpired, 

unsuspended, and unrevoked U.S. 

Veterinary Biologics Establishment 

License issued by the Administrator and 

a U.S. Veterinary Biological Product 

License for each product prepared in 

such establishment. Part 107 of the 

regulations contains exemptions from 

the requirement for preparation 

pursuant to unsuspended and 

unrevoked establishment and product 

licenses. One of those exemptions, 

found in § 107.1(a), allows for product 

to be prepared by a veterinary 

practitioner solely for administration to 

animals in the course of his or her Statelicensed professional practice of 

veterinary medicine under a 

veterinarian-client-patient relationship. 

The regulations in § 107.1(a)(1) set forth 

the criteria that must be satisfied in 

order to establish the existence of a 

veterinarian-client-patient relationship. 

Recently, it has come to APHIS’ 

attention that some veterinary 

practitioners may be entering into 

contractual agreements whereby 

product would be prepared by a 

commercial laboratory/manufacturing 

facility (unlicensed vaccine 

manufacturing establishment) rather 

than by the practitioner at the facility he 

or she uses to conduct the day-to-day 

activities associated with his or her 

State licensed practice of veterinary 

medicine. Such arrangements in which 

an unlicensed establishment, acting as 

an agent for the practitioner, prepares 

the product and sells and ships/ 

transports the product directly to the 

animal owner creates a situation in 

which product is prepared, sold, and 

shipped in violation of the Act. 

Specifically, the Act states that no 

person, firm, or corporation shall 

prepare, sell, barter, exchange, or ship 

any virus, serum, toxin, or analogous 

product manufactured within the 

United States and intended for the 

treatment of animals, unless and until 

the said virus, serum, toxin, or 

analogous product shall have been 

prepared, under and in compliance with 

regulations at an establishment holding 

an unsuspended and unrevoked license 

issued by the Secretary of Agriculture. 

While part 107 of the regulations 

specifies the licensing exemption for 

product prepared by veterinary 

practitioners and sets forth the 

requirements for showing that a 

veterinarian-client-patient relationship 

exists, it appears that, given the 

instances described in the previous 

paragraph, some clarification is 

necessary with respect to the issue of 

the relationship between the veterinary 

practitioner and the facility where the 

product is prepared. The purpose of this 

provision is to allow a veterinarian to 

prepare veterinary biologics at the 

location where she or he operates a 

veterinary practice, which would not be 


srobinson on DSK4SPTVN1PROD with PROPOSALS
42196 Federal Register / Vol. 77, No. 138 / Wednesday, July 18, 2012 / Proposed Rules 

licensed under the Act, and to transport 

it away from that facility when 

necessary, for administration to an 

animal or animals under a veterinarianclient-patient relationship without 

violating the Act. 

However, no provision in the Act or 

the regulations would allow a veterinary 

practitioner to take advantage of the 

licensing exemption while at the same 

time consigning the actual preparation 

of the product to a commercial 

laboratory/manufacturing establishment 

which would then exchange or deliver 

the product to a third party. An 

arrangement such as this is contrary to 

the statutory requirement that prohibits 

a person, firm, or corporation from 

preparing, selling, bartering, 

exchanging, or shipping a veterinary 

biologic intended for use in the 

treatment of animals unless and until 

such product shall have been prepared 

in compliance with the regulations in a 

USDA licensed establishment (see 21 

U.S.C. 151). 

In order to ensure that product subject 

to the exemption for products prepared 

by veterinarians solely for 

administration to animals in the course 

of a State licensed professional practice 

of veterinary medicine under a 

veterinarian-client-patient relationship 

is prepared in accordance with the 

requirements of the Virus-Serum-Toxin 

Act, APHIS is proposing to amend its 

regulations by adding clarifying 

language to § 107.1 emphasizing the 

requirement that the exemption from 

preparation pursuant to unsuspended 

and unrevoked product and 

establishment licenses applies only to 

product prepared by the veterinary 

practitioner (or by a supervised 

veterinary assistant) at the facility such 

veterinarian uses in the day-to-day 

operation of his/her State-licensed 

professional practice of veterinary 

medicine. 

The proposed amendment would 

clarify that the preparation of product 

prepared by a veterinarian solely for 

administration to animals in the course 

of a State-licensed professional practice 

of veterinary medicine under a 

veterinarian-client-patient relationship 

shall only be done at a facility routinely 

used in the day-to-day operation of a 

professional practice of veterinary 

medicine. 

We also propose to make minor 

changes to § 107.1 to replace the term 

‘‘establishments’’ with ‘‘facilities.’’ As 

discussed above, § 107.1 exempts 

product prepared by a veterinary 

practitioner from preparation pursuant 

to an unsuspended and unrevoked 

product and establishment license. 

However, § 107.1 refers to the sites of 

such production as ‘‘establishments,’’ 

which is confusing because that term is 

used elsewhere in the regulations to 

refer only to production sites that are 

not exempt from the license 

requirement. For example, the 

definitions in § 101.2 define 

establishment as ‘‘One or more premises 

designated on the establishment 

license.’’ Therefore, in § 107.1 where we 

refer to the exemption for the site of 

day-to-day operation of a veterinarian’s 

State-licensed professional practice, we 

would use the term ‘‘facilities’’ rather 

than ‘‘establishments.’’ 

Executive Order 12866 and Regulatory 

Flexibility Act 

This proposed 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 proposed rule would amend the 

regulations in § 107.1 to clarify that the 

preparation of biological products 

pursuant to the exemption in paragraph 

(a)(1) of that section must take place at 

the same facility that the veterinarian 

preparing the product utilizes in 

conducting the day-to-day activities 

associated with his/her State-licensed 

professional practice of veterinary 

medicine. 

As noted previously in this proposed 

rule, no provision in the Act or the 

regulations allows a veterinary 

practitioner to take advantage of the 

licensing exemption while at the same 

time consigning the actual preparation 

of the product to a commercial 

laboratory or other manufacturing 

establishment which would then 

exchange or deliver the product to a 

third party. An arrangement such as this 

is contrary to the statutory requirement 

that prohibits a person, firm, or 

corporation from preparing, selling, 

bartering, exchanging, or shipping a 

veterinary biologic intended for use in 

the treatment of animals unless and 

until such product shall have been 

prepared in compliance with the 

regulations in a USDA licensed 

establishment. 

Therefore, this proposed amendment 

to the regulations is simply a 

clarification of an existing and 

longstanding prohibition. The proposed 

amendment would not change the 

nature of the exemption, the number of 

veterinary practitioners who are eligible 

to take advantage of the exemption, or 

the criteria that must be satisfied in 

order to establish the existence of a 

veterinarian-client-patient relationship, 

nor would it add any reporting or 

recordkeeping burden. It is possible that 

there may be one or several veterinary 

practitioners that currently contract 

with an unlicensed commercial 

laboratory or manufacturing facility to 

produce veterinary biologics in 

violation of the Act. These entities 

could be affected if they become aware 

of the violation through publication of 

this proposed rule and discontinue the 

prohibited activity, but that effect could 

also occur at any time under the current 

regulations if APHIS receives specific 

evidence of such a violation and orders 

its cessation. 

Under these circumstances, the 

Administrator of the Animal and Plant 

Health Inspection Service has 

determined that this action would not 

have a significant economic impact on 

a substantial number of small entities. 

Executive Order 12372 

This program/activity is listed in the 

category of Federal Domestic Assistance 

under No. 10.025 and is subject to 

Executive Order 12372, which requires 

intergovernmental consultation with 

State and local officials. (See 7 CFR part 

3015, subpart V.) 

Executive Order 12988 

This proposed rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. It is not intended to 

have retroactive effect. This rule would 

not preempt any State or local laws, 

regulations, or policies where they are 

necessary to address local disease 

conditions or eradication programs. 

However, where safety, efficacy, purity, 

and potency of biological products are 

concerned, it is the Agency’s intent to 

occupy the field. Under the Act, 

Congress clearly intended that there be 

national uniformity in the regulation of 

these products, and APHIS will 

continue to take enforcement action as 

necessary against practitioners and 

production facilities with regard to 

veterinary biologics produced or 

distributed in contravention of the Act. 

There are no administrative proceedings 

which must be exhausted prior to a 

judicial challenge to the regulations 

under this rule. 

Paperwork Reduction Act 

This proposed rule contains no new 

information collection or recordkeeping 

requirements under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.). 

List of Subjects in 9 CFR Part 107 

Animal biologics, Reporting and 

recordkeeping requirements. 

Accordingly, we propose to amend 9 

CFR part 107 as follows: 


srobinson on DSK4SPTVN1PROD with PROPOSALS
Federal Register / Vol. 77, No. 138 / Wednesday, July 18, 2012 / Proposed Rules 42197 

PART 107—EXEMPTIONS FROM 

PREPARATION PURSUANT TO AN 

UNSUSPENDED AND UNREVOKED 

LICENSE 

1. The authority citation for part 107 

continues to read as follows: 

Authority: 21 U.S.C. 151–159; 7 CFR 2.22, 

2.80, and 371.4. 

2. Section 107.1 is amended as 

follows: 

a. In the introductory text and in 

paragraph (a)(1), by removing the word 

‘‘establishments’’ and adding the word 

‘‘facilities’’ in its place. 

b. By redesignating paragraph (a)(2) as 

paragraph (a)(3) and adding a new 

paragraph (a)(2) to read as follows: 

§ 107.1 Veterinary practitioners and animal 

owners. 

* * * * * 

(a) * * * 

(2) All steps in the preparation of 

product being prepared under the 

exemption in paragraph (a)(1) of this 

section must be performed at the 

facilities that the veterinarian utilizes 

for the day-to-day activities associated 

with the treatment of animals in the 

course of his/her State-licensed 

professional practice of veterinary 

medicine. A veterinary assistant 

employed by the veterinary practitioner 

and working at the veterinary practice’s 

facility under the veterinarian’s direct 

supervision may perform the steps in 

the preparation of product. Such 

preparation may not be consigned to 

any other party or sub-contracted to a 

commercial laboratory/manufacturing 

facility. 

* * * * * 

Done in Washington, DC, this 12th day of 

July 2012. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. 2012–17533 Filed 7–17–12; 8:45 am] 

BILLING CODE 3410–34–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 121 

RIN 3245–AG37 

Small Business Size Standards: 

Construction 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) proposes to 

increase small business size standards 

for one industry and one sub-industry in 

North American Industry Classification 

System (NAICS) Sector 23, 

Construction. SBA proposes to increase 

the size standard for NAICS 237210, 

Land Subdivision, from $7 million to 

$25 million and the size standard for 

Dredging and Surface Cleanup 

Activities, a sub-industry category (or an 

‘‘exception’’) under NAICS 237990, 

Other Heavy and Civil Engineering 

Construction, from $20 million to $30 

million in average annual receipts. As 

part of its ongoing comprehensive size 

standards review, SBA has evaluated all 

size standards in NAICS Sector 23 to 

determine whether they should be 

retained or revised. This proposed rule 

is one of a series of proposed rules that 

will review size standards of industries 

grouped by NAICS Sector. SBA issued 

a White Paper entitled ‘‘Size Standards 

Methodology’’ and published a notice in 

the October 21, 2009 issue of the 

Federal Register to advise the public 

that the document is available on its 

Web site at www.sba.gov/size for public 

review and comments. The ‘‘Size 

Standards Methodology’’ White Paper 

explains how SBA establishes, reviews, 

and modifies its receipts based and 

employee based small business size 

standards. In this proposed rule, SBA 

has applied its methodology that 

pertains to establishing, reviewing, and 

modifying a receipts based size 

standard. 

DATES: SBA must receive comments to 

this proposed rule on or before 

September 17, 2012. 

ADDRESSES: Identify your comments by 

RIN 3245–AG37 and submit them by 

one of the following methods: (1) 

Federal eRulemaking Portal: 

www.regulations.gov, following the 

instructions for submitting comments; 

or (2) Mail/Hand Delivery/Courier: 

Khem R. Sharma, Ph.D., Chief, Size 

Standards Division, 409 Third Street 

SW., Mail Code 6530, Washington, DC 

20416. SBA will not accept comments to 

this proposed rule submitted by email. 

SBA will post all comments to this 

proposed rule on www.regulations.gov. 

If you wish to submit confidential 

business information (CBI) as defined in 

the User Notice at www.regulations.gov, 

you must submit such information to 

U.S. Small Business Administration, 

Khem R. Sharma, Ph.D., Chief, Size 

Standards Division, 409 Third Street 

SW., Mail Code 6530, Washington, DC 

20416, or send an email to 

sizestandards@sba.gov. Highlight the 

information that you consider to be CBI 

and explain why you believe SBA 

should hold this information as 

confidential. SBA will review your 

information and determine whether it 

will make the information public. 

FOR FURTHER INFORMATION CONTACT: 

Jorge Laboy-Bruno, Ph.D., Economist, 

Size Standards Division, (202) 205–6618 

or sizestandards@sba.gov. 

SUPPLEMENTARY INFORMATION: To 

determine eligibility for Federal small 

business assistance, SBA establishes 

small business size definitions (referred 

to as size standards) for private sector 

industries in the United States. SBA 

uses two primary measures of business 

size: Average annual receipts and 

average number of employees. SBA uses 

financial assets, electric output, and 

refining capacity to measure the size of 

a few specialized industries. In 

addition, SBA’s Small Business 

Investment Company (SBIC), Certified 

Development Company (504), and 7(a) 

Loan Programs use either the industry 

based size standards or net worth and 

net income based alternative size 

standards to determine eligibility for 

those programs. At the beginning of the 

current comprehensive size standards 

review, there were 41 different size 

standards covering 1,141 NAICS 

industries and 18 sub-industry activities 

(‘‘exceptions’’ in SBA’s table of size 

standards). Thirty-one of these size 

levels were based on average annual 

receipts, seven were based on average 

number of employees, and three were 

based on other measures. 

Over the years, SBA has received 

comments that its size standards have 

not kept up with changes in the 

economy, in particular the changes in 

the Federal contracting marketplace and 

industry structure. The last time SBA 

conducted a comprehensive review of 

all size standards was during the late 

1970s and early 1980s. Since then, most 

reviews of size standards were limited 

to a few specific industries in response 

to requests from the public and Federal 

agencies. SBA also adjusts its monetary 

based size standards for inflation at least 

once every five years. SBA’s latest 

inflation adjustment to size standards 

was published in the Federal Register 

on July 18, 2008 (73 FR 41237). 

Given its importance in the Federal 

Procurement market, SBA has studied 

and reviewed the construction industry 

over time. In 1985, SBA adopted a new 

size standard for the Dredging subindustry (an exception within NAICS 

industry 237990). The new size 

standard was based on a 1984 study of 

the industry structure, conducted in 

cooperation with the Corps of Engineers 

and members of the industry. The final 

rule was published in the Federal 

Register on November 8, 1985 (50 FR 

46418). Finally, the industry’s 


srobinson on DSK4SPTVN1PROD with PROPOSALS