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Analysis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities

Proposed Rule Removal of the Ports of Embarkation and Export Inspection Facilities List from the Regulations
Docket N o. APHIS

- 2009

- 0078

U.S. Department of Agriculture Animal and Plant Health Inspection Service

June 20101



### Introduction APHIS is proposing to amend the live animal export regulations by removing the list of designated ports of embarkation and their associated export inspection facilities. As a result of this rulemaking, those ports and facilities would 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 regulati on of animal exports. The Regulatory F lexibility Act of 1980 (Public Law 96

- 354) requires agencies to evaluate the potential effects of proposed and final rules on businesses, small org anizations, and small government jurisdictions. Section 605 of the RFA allows an agency to certify a rule if the proposed rulemaking will not have a significant economic impact on a substantial number of small 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 state 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 be moved to a designated port of embarkation. P aragraph (a) of § 91.14 lists ports that have been designated by APHIS as having met the requirements for use as ports of embarkatio n. In addition to remov ing the list of designated ports of embarkation and their associated export inspection facilities a nd post ing the list to APHIS’ W ebsite , APHIS would provide in the regulations the W eb address and would explain the administrative process for adding or removing ports and inspection facilities to or from the list. The technical criteria by which a2

design ated embarkation port or export inspection facility are added to or removed from the list will not change. APHIS would continue to provide an opportunity for public comment on changes to the list by publishing notices in the Federal Register that solicit public comment. A notice announcing APHIS’ intention to add a designated embarkation port or an export inspection facility would also announce the availability of the APHIS

- prepared evaluation (the basis for the change in the status of the designated emba rkation port or export inspection facility) for comment. These changes would simplify and expedite APHIS processes for regulating animal exports while continuing to provide for public participation in the process. 

### Effects for Small Entities Currently, ru lemaking is required to amend the CFR to change the list of designated embarkation ports and associated export inspection facilities. By eliminating the need for specific prior rulemaking for approving changes in the list of the ports and inspection facil ities under the proposed notice

- based process, considerable time savings could 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. The proposed change would not alter the technical criteria by which APHIS adds or removes designated embar kation ports and inspection facilities from the list. Rather, the proposed change removes the need for rulemaking to administr atively change the list of ports and inspection facilities. Those entities most likely to be economically affected by the rule are exporters of live animals and domestic livestock producers. The Small Business Administration (SBA) has established guidelin es 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. economy. A3

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/export agents and brokers). According to SBA size standards for beef cattle ranching and farm ing (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 this category were considered small in 2006. 1 More than 98 percent of beef cattle and ran ches 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 far ms 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 h ad 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 are small. However, this proposal would only amend APHIS’ administrative process for chang i ng the list of designated embarkation ports and associated export inspection facilities . The proposed action will not make any changes in the status of any designated embarkation port or associated export inspection facility , nor will the proposed action alter the technical criteria by which

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

. 2 U.S. Department of Agriculture. National Agricultu ral 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.4

designated embarkation ports and associated export inspection facilities are added to or removed from th is list. These changes should not significantly impact the supply of animal s and animal products in the United Sta tes

. W e expect little effect on U.S. entities other than benefits they may derive from timelier changes to the list of designated ports of embarkation and their associated export inspection facilities

. 

### Conclusion APHIS expects the proposed rule to have li ttle impact on U.S. livestock production and exports

. It would eliminate the need for specific prior rulemaking for approving changes in the list of designated embarkation ports and associated export inspection facilities , which may result in considerable regulatory time savings, while still providing opportunity for public comment on the basis for the action. The proposed changes would not alter the technical standards by which APHIS adds or removes the ports and inspection facilities

. C hanges to the li st would take place more rapidly , there by facilitat ing the export of animals

. Based on the information presented, if promulgated, this rule will not have a significant impact on a substantial number of small entities. We invite comment from members of the public who believe that the proposed rule may have a significant impact on U.S. producers or exporters of livestock.