### United States

Department of Agriculture

Animal and Plant Health Inspection Service March 2011 Analysis in Support of Certification that the

Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities

Final Rule Docket N o. APHIS - 2009 - 0078 RIN 0579 - AD25

Removal of the Ports of Embarkation and Export Inspection Facilities List from Regulations

Policy & Program Development Policy Analysis & Development0



### Introduction

This analysis provides the b asis, as required by the Regulatory Flexibility Act, for certification by the APHIS Administrator that the rule will not have a significant economic impact on a substantial number of small entities.

APHIS is amending the live animal export regulations by r emoving the list of designated ports of embarkation and their associated export inspection facilities. As a result of this rulemaking, those ports and facilities w ill henceforth be listed on the APHIS Web site rather than in the regulations, thus enabling the Agency to amend the list, when necessary, in a timelier manner and allowing for greater flexibility in the regulation of animal exports. The Regulatory Flexibility Act of 1980 (Public Law 96

- 354) requires agencies to evaluate the potential effects of proposed and final rules on businesses, small organizations, and small government jurisdictions. Section 605 of the RFA allows an agency to certify a rule if the final rulemaking will not have a significant economic impact on a substantial number of smal l entities. Following is the factual

basis for such certification in this case. The regulations in 9 CFR part 91, “Inspection and Handling of Livestock for Exportation” prescribe conditions for exporting animals from the United States. The regulations

st ate among other things that all animals, except animals exported by land to Canada or Mexico, must be exported through the designated ports of embarkation, unless the exporter can show that the animals would suffer undue hardship if they were required to b e moved to a designated port of embarkation. Paragraph (a) of § 91.14 lists ports that have been designated by APHIS as having met the requirements for use as ports of embarkation. In addition to removing the list of designated ports of embarkation and t heir associated export inspection facilities and posting the list to APHIS’ Website, APHIS w ill provide in the regulations the Web address and w ill explain1

the administrative process for adding or removing ports and inspection facilities to or from the

lis t. The final change will not alter the technical criteria by which APHIS adds or removes designated embarkation ports and inspection facilities from the list. Rather, the final change removes the need for rulemaking to administratively change the list of ports and inspection

facilities. APHIS solicited comments concerning our proposal for 60 days ending November 16, 2010. We received one comment by that date, from a livestock exporter who supported the proposed rule. Therefore, for reasons given in the pr oposed rule, APHIS is adopting the proposed rule as a final rule, without change. 

### Potential Impact on Small Entities Currently, rulemaking is required to amend the CFR to change the list of designated embarkation ports and associated export inspection fac ilities. By eliminating the need for specific prior rulemaking for approving changes in the list of the ports and inspection facilities

under the final notice

- based process, considerable time savings c an be reaped. The rulemaking process is an inherently longer process than a notice

- based process. A notice

- based approach can be 6 to 12 months shorter than a rulemaking approach in a given situation. Those entities most likely to be economically affected by the rule are exporters of live

animals and domest ic livestock producers. The Small Business Administration (SBA) has established guidelines for determining which businesses are to be considered small. Ex porters of live animals are identified within the broader wholesaling trade sector of the U.S. econom y. A firm primarily engaged in wholesaling animals is considered small if it employs not more than 100 persons. These entities either sell goods on their own account (import/export merchants) or arrange for the sale of goods owned by others (import/expor t agents and brokers). According to2

SBA size standards for beef cattle ranching and farming (NAICS 112111), dairy cattle and milk production (NAICS 112120), hog and pig farming (NAICS 112210), sheep farming (NAICS 112410), and goat farming (NAICS 112420) , operations with not more than $750,000 in annual receipts are considered small. Cattle feedlots (NAICS 112112) with less than $2.5 million in annual receipts are considered small.

NAICS code 424520 covers l ivestock merchant wholesalers

. All firms in t his category

were considered small in 2006. 1 More than 98 percent of beef cattle and ranches had annual receipts of less than $500,000 in 2007. 2 About 80 percent of dairy farms had less than $500,000 in annual receipts, and slightly more than 10 percent had more than $1 million in annual receipts in 2007. About 73 percent of hog and pig farms had less than $500,000 in annual receipts, and nearly 17 percent had more than $1 million in annual receipts in 2007. More than 99 percent of sheep and goat farms had less than $500,000 in annual receipts in 2007. About 96 percent of cattle feedlots had less than $2.5 million in annual receipts in 2007. Based on th ese percentages, it is likely that most of the entities that may be affected by this proposed rule ar e small. However, this final notice w ill only amend APHIS’ administrative process for changing the list of designated embarkation ports and associated export inspection facilities. The final action will not make any changes in the status of any designated embarkation port or associated export inspection facility, nor will the final action alter the technical criteria by which designated embarkation ports and associated export inspection facilities are added to or removed from this

list. These changes will not significantly impact the supply of animals and animal products in the United States. We expect little effect on U.S. entities other than benefits they may derive from

1 U.S. Census Bureau. 2006 County Business Patterns by Employment Size Class

. 2 U.S. Department of Agriculture. National Agricultural Statistics Service. 2007 Census of Agriculture. The census does not include a size classification of less than $750,000 in annual receipts in its compiled statistics.3

timelier changes to the list of designated ports of embarkation and their associated export inspection facilities. 

### Conclusion APHIS expects the final rule to have little impact on U.S. livestock production and exports. It w ill eliminate the need for specific prior rulemaking for approving changes in the list of designated embarkation por ts and associated export inspection facilities, which may result in considerable regulatory time savings

. The final changes w ill not alter the technical standards by

which APHIS adds or removes the ports and inspection facilities . Changes to the list wou ld take place more rapidly, thereby facilitating the export of animals. Under these circumstances, the Administration of the Animal and Plant Health Inspection

Service has determined that this action will not have a significant economic impact on a

substan tial number of small entities.