### Analysis in Support of Certification that the Rule will not

have a Significant Economic Impact on a Substantial

Number of Small Entities Proposed Rule

Amend 9 CFR 92.1 and 92.2, to modify the information requested from foreign regions applying for recognition of animal health status

Docket No. APHIS - 20 07 - 0 158

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

April, 20101 Summary Foreign regions requesting an updating of their animal disease status, as recognized by the United States, do so by undergoing an evaluation process that includes completing a 11

- factor questionnaire. However, we believe that the 11 factors are currently w ritten in a way that is causing delays in the evaluation process. Additionally, the 11 factors do not specifically address regions that are considered to be historically free of a disease in accordance with OIE
standards. The proposed rule would consolida te the questionnaire into an eight

- factor format, provide explanatory paragraphs for each factor, and make provisions for regions that are considered historically free of a disease. APHIS’ evaluation process consists of two phases, including a site visit. The foreign region requesting the change in disease status is required to complete the questionnaire in Phase
1. We expect that the new format would reduce the time required for completion of the questionnaire, resulting in more efficient processing by AP HIS of requests for updating of disease status. The time savings could have minor effects for U.S. businesses and consumers; subsequent animal or animal product imports allowed because of the updating of a region’s disease status could begin sooner, all t hings equal . Industries that could be affected by the proposed rule, wholesalers and producers of animals and animal products, are largely composed of small entities. However, based on expected impacts, the proposed rule w ould not have a significant econ omic effect on a substantial number of small entities.2

Introduction This analysis provides the basis, as required by the Regulatory Flexibility Act, for certification by the APHIS Administrator that the proposed rule, if promulgated, would not have

a significant economic impact on a substantial number of small entities. Foreign regions wishing to have their animal health status reviewed and updated normally provide the Animal and Plant Health Inspection Service (APHIS) with the requested
information in the 11

- factor format outlined in 9 CFR 92.2(b). Veterinary Services’ (VS) Regionalization Evaluation Services

- Import (RESI) staff then initiates an evaluation of the status of the particular disease in the requesting region. However, there are often de lays in the evaluation process due to gaps in the information submitted. We believe that part of the reason for such insufficient information is that, in some cases, the 11 factors are not clear as to the information that is required.
This rule would amen d the 11 factors used to evaluate the animal health status of foreign regions. The 11 factors would be consolidated to 8, thereby eliminating redundancies and improving the logical flow of the questionnaire . T he more streamlined format would begin with

a n arrative that describes APHIS’ evaluation process and the informational requirements, and
would include explanatory descriptions under each factor. These changes are intended to remove areas of misunderstanding and help eliminate delays that APHIS and the foreign regions have experienced using the current 11

- factor format. The proposed rule would also provide for the recognition of region s as historically free of a given disease, which would be determined using a historically free status questionnaire align ed with World Organization for Animal Health (OIE) standards. The questionnaire would facilitate3

the status evaluation for a region that is unable to provide surveillance information about a disease simply because it has been historically

- free of the dise ase. 

### Potential Impact on Small Entities
APHIS has identified two potential benefits related to the expected reduction in delays in processing requests by foreign regions for updates of disease status: (i) more efficient use of APHIS resources, and (ii) th e possibility of gains to U.S. businesses and consumers because animal or animal product imports following the updating of a region’s disease status would begin sooner, on average, than currently. The RESI evaluation process has two phases, with their le ngth of time dependent on the activities of both APHIS and the foreign region. During Phase 1, information is gathered using the 11

- factor format and logistical arrangements are made for an in

- country site visit. Phase 2 spans the site visit and prelimina ry steps of rulemaking, including preparation of the risk analysis and the regulatory workplan. APHIS expects that the proposed rule would reduce the amount of time that it normally takes to complete Phase 1 of the evaluation process. A review of timeline s for past evaluations found that Phase 1 has averaged about 15 months, with APHIS tasks and those of the foreign region each requiring about an equal share of this time. 1 Phase 2 has averaged about 14 months, with APHIS tasks consuming about three

- fourths of this time and the foreign region’s tasks, about one

- fourth. RESI receives about eight questionnaires a year from regions requesting an updating of disease status. 2 We do not know the extent to which the proposed rule would result in more efficient use of APHIS resources. As an example of potential time savings per evaluation, if the revised questionnaire were to result in foreign regions ’ , on average, completing their Phase 1 tasks using 10 percent less time than at present, the time saved would be ab out 0.75 month, or three weeks ( i.e., 7.5 months

-- the time required by foreign regions, on average, to complete their Phase 1 tasks

-- multiplied by 0.10). Multiplying this time savings by an average of 8 questionnaires submitted per year yields a total time savings of about 24 weeks per year for

1 The maximum time spent in this phase was about 19 months by APHIS and nearly 28 months by the foreign region. 2 Dr. Kelly Rhodes, USDA APHIS RESI, personal communication.4

completing Phase 1 tasks. We reiterate that we are unable to quantify the reduction in time that is expected to be achieved because of this rule, but as the above scenario suggests, program

- wide the aggregate time sa vings from more rapid completion of the evaluation process could be sizable. Net benefits of the rule for the private sector are not as readily apparent. Using this same hypothetical example, a region would be able to begin to export the product of conce rn to the United States three weeks earlier than at present, all things equal. 3 U.S. businesses and consumers could be affected by this earlier initial entry date, but we expect any such impacts would be minor. For U.S. welfare as a whole, whatever benefit s might accrue to consumers from a three

- week earlier increased supply of the imported product and possible decline in price would be realized at the expense of domestic producers of the same commodity over the three

- week period, in terms of the price decl ine and increased foreign competition. Expected Costs APHIS would bear costs of developing the eight

- factor questionnaire and training staff, if necessary, to evaluate the requesting regions under the new format. These costs would be minimal, since the new questionnaire would be a consolidation of the 11

- fact or questionnaire. Small

- E ntity Effects In accordance with the Regulatory Flexibility Act of 1980 (Public Law 96

- 354), we consider the expected impact of the proposed rule on small businesses, small organizations, and small governmental jurisdictions. The proposed rule supports a continuing policy to allow the import ation of foreign animal products that pose no significant risk of introducing pests or disease s into the United States. This rule would amend 9 CFR 92.1 and 92.2. I ts legal basis rest s on the st atutes that underlie this regulation, namely , 21 U.S.C. 104. Potentially affected entities of the proposed rule are importers and producers of animals and animal products. The majority of such enterprises are small entities, as defined by the Small Busines s Administration. For most categories of wholesale trade, the small

- entity standard is not more than 100 employees. For most categories of animal production, the small

- entity standard is not more than $750, 000 in annual receipts.

3 The possibility of importation would require tha t there were no other prohibitive sanitary restrictions in place.5

Most businesses that coul d be affected by this rule are small, but we expect the effects to be insignificant. Although we do not know the time savings that would be achieved, for a foreign region to be able to export a particular animal or animal product to the United States a few weeks

– or even months

– sooner than generally has been the case under the existing regulations is not expected to have a significant effect on U.S. businesses, either positively or negatively. Under these circumstances, the Administr ator 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. References Census of Agriculture, 2002, http://www.nass.usda.gov/Census_of_Agriculture/index.asp

Economic Census, 2002, http://www.census.gov/econ/census02/

Small Busines s Administration. A Guide for Government Agencies How to Comply with the Regulatory Flexibility Act

. http://www.sba.gov/advo/laws/regflex.html Small Business Administration. Small Business Standar d Match to North American Industry Classification System http://www.sba.gov/size/sizetable2002.html