This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

57227 

Vol. 78, No. 181 

Wednesday, September 18, 2013 

1Both the retail pet store exemption in 

§ 2.1(a)(3)(i) and the direct retail sales exemption in 

§ 2.1(a)(3)(vii) derive their authority from the AWA 

exemption for retail pet stores. We discuss this at 

greater length later in this document. 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

9 CFR Parts 1 and 2 

[Docket No. APHIS–2011–0003] 

RIN 0579–AD57 

Animal Welfare; Retail Pet Stores and 

Licensing Exemptions 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Final rule. 

SUMMARY: We are revising the definition 

of retail pet store and related regulations 

in order to ensure that the definition of 

retail pet store in the regulations is 

consistent with the Animal Welfare Act 

(AWA), thereby bringing more pet 

animals sold at retail under the 

protection of the AWA. Specifically, we 

are narrowing the definition of retail pet 

store to mean a place of business or 

residence at which the seller, buyer, and 

the animal available for sale are 

physically present so that every buyer 

may personally observe the animal prior 

to purchasing and/or taking custody of 

that animal after purchase, and where 

only certain animals are sold or offered 

for sale, at retail, for use as pets. Retail 

pet stores are not required to be licensed 

and inspected under the AWA. In 

addition, we are removing the limitation 

on the source of gross income from the 

licensing exemption in the regulations 

for any person who does not sell or 

negotiate the sale of any wild or exotic 

animal, dog, or cat and who derives no 

more than $500 gross income from the 

sale of the animals other than wild or 

exotic animals, dogs, or cats during any 

calendar year. We are also increasing 

from three to four the number of 

breeding female dogs, cats, and/or small 

exotic or wild mammals that a person 

may maintain on his or her premises 

and be exempt from the licensing and 

inspection requirements if he or she 

sells only the offspring of those animals 

born and raised on his or her premises, 

for pets or exhibition. This exemption 

applies regardless of whether those 

animals are sold at retail or wholesale. 

These actions are necessary so that all 

animals sold at retail for use as pets are 

monitored for their health and humane 

treatment. 

DATES: Effective Date: November 18, 

2013. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Gerald Rushin, Veterinary Medical 

Officer, Animal Care, APHIS, 4700 River 

Road Unit 84, Riverdale, MD 20737– 

1236; (301) 851–3751. 

SUPPLEMENTARY INFORMATION: 

I. Purpose of the Regulatory Action 

Need for the Regulatory Action 

The Animal Welfare Act (AWA or the 

Act, 7 U.S.C. 2131 et seq.), seeks to 

ensure the humane handling, care, 

treatment, and transportation of certain 

animals that are sold at wholesale and 

retail for use in research facilities, for 

exhibition purposes, or for use as pets 

by means of Federal licensing and 

inspection. When Congress passed the 

AWA in 1966, it specifically exempted 

retail pet stores from such licensing and 

inspection. At that time, retailers of pets 

covered under the exemption consisted 

mostly of traditional ‘‘brick-and-mortar’’ 

pet stores, as well as small-scale 

breeders whose place of business was 

typically their residence. Both types of 

retail outlets were exempted by the 

AWA as ‘‘retail pet stores’’ because, 

despite the many dissimilarities in how 

pet shops and small-scale residential 

breeders conduct business, they share in 

common a business model in which 

buyers visit their places of business and 

personally observe the animals available 

for sale prior to purchasing and/or 

taking custody of them. 

Enforcement of the Act has been 

delegated by the Secretary of 

Agriculture to the Animal and Plant 

Health Inspection Service (APHIS) of 

the United States Department of 

Agriculture (USDA). APHIS has issued 

regulations pursuant to the Act; these 

regulations, which we refer to below as 

the AWA regulations, are found in 9 

CFR parts 1, 2, and 3. Part 1 contains 

definitions for terms used in parts 2 and 

3; part 2 provides administrative 

requirements and sets forth institutional 

responsibilities for regulated parties; 

and part 3 contains specifications for 

the humane handling, care, treatment, 

and transportation of animals covered 

by the AWA. 

Part 2 requires most dealers to be 

licensed by APHIS; classes of 

individuals who are exempt from such 

licensing are listed in paragraph (a)(3) of 

§ 2.1. 

Since the AWA regulations were 

issued, most retailers of pet animals 

have been exempt from licensing by 

virtue of our considering them to be 

‘‘retail pet stores’’ as defined in § 1.1 of 

the AWA regulations. 

Because the previous definition of 

retail pet store in the AWA regulations 

covered nearly all retail outlets, retailers 

selling animals by any means, including 

sight unseen sales conducted over the 

Internet or by mail, telephone, or any 

other method where customers do not 

personally observe the animals available 

for sale prior to purchasing and/or 

taking custody of them, were considered 

to be retail pet stores and as such had 

been exempt from licensing and 

inspection under § 2.1(a)(3)(i) and 

§ 2.1(a)(3)(vii).1

With the growth of the Internet in the 

1990s, technology brought with it new 

and unforeseen opportunities to buy 

and sell pets. More retailers began 

offering pets for sale sight unseen and 

to sell and ship them nationwide. While 

pet animals were sometimes sold sight 

unseen via telephone and mail order 

decades before passage of the AWA, the 

Internet has made it possible for many 

more persons throughout the United 

States to buy pets online from retailers 

without ever having to be physically 

present at the seller’s place of business 

or residence and personally observe the 

animals offered for sale as the AWA 

intended. With the dramatic rise in sight 

unseen sales have come increasing 

complaints from the public about the 

lack of monitoring and oversight of the 

health and humane treatment of those 

animals. 

In order to ensure that the definition 

of retail pet store in the AWA 

regulations is consistent with the AWA 

and that all animals sold at retail for use 


pmangrum on DSK3VPTVN1PROD with RULES
57228 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

2To view the proposed rule, its supporting 

documents, and the comments we received, go to 

http://www.regulations.gov/

#!docketDetail;D=APHIS-2011-0003. 

as pets are monitored for their health 

and humane treatment, we published in 

the Federal Register (77 FR 28799– 

28805, Docket No. APHIS–2011–0003), 

on May 16, 2012, a proposal 2 to revise 

the definition of retail pet store and 

related regulations to bring more pet 

animals sold at retail under the 

protection of the AWA. This rule 

finalizes that proposed rule while also 

making changes to its provisions based 

on the comments we received (see the 

section below titled ‘‘Summary of the 

Major Provisions of the Regulatory 

Action’’). 

Legal Authority for the Regulatory 

Action 

Under the AWA, the Secretary of 

Agriculture is authorized to promulgate 

standards and other requirements 

governing the humane handling, care, 

treatment, and transportation of certain 

animals by dealers, research facilities, 

exhibitors, operators of auction sales, 

and carriers and intermediate handlers. 

As we mentioned previously in this 

document, the Secretary has delegated 

responsibility for administering the 

AWA to the Administrator of APHIS. 

Within APHIS, the responsibility for 

administering the AWA has been 

delegated to the Deputy Administrator 

for Animal Care. 

II. Summary of the Major Provisions of 

the Regulatory Action 

Key Changes to the Proposed Rule 

Based on the comments we received 

and our own reevaluation of the 

proposed rule, we are finalizing the 

proposed rule with the following key 

changes to its provisions: 

• Revising our proposed definition of 

retail pet store so that it means a place 

of business or residence (not necessarily 

that of the seller’s) at which the seller, 

buyer, and the animal available for sale 

are physically present so that every 

buyer may personally observe the 

animal available for sale prior to 

purchasing and/or taking custody of that 

animal after purchase and where only 

certain animals are sold or offered for 

sale, at retail, for use as pets. 

• Amending the exemption from 

licensing for persons maintaining four 

or fewer breeding females in 

§ 2.1(a)(3)(iii) to apply only to 

wholesalers (for whom the exemption 

was originally intended). 

• Restoring and amending the 

exemption in § 2.1(a)(3)(vii) so that any 

person including, but not limited to, 

purebred dog or cat fanciers, who 

maintains a total of four or fewer 

breeding female dogs, cats, and/or small 

exotic or wild mammals, and who sells, 

at retail, only the offspring of these 

dogs, cats, and/or small exotic or wild 

mammals, which were born and raised 

on his or her premises, for pets or 

exhibition, and is not otherwise 

required to obtain a license, is also 

considered a retail pet store for 

regulatory purposes. 

• Explaining in detail the effects of 

the proposed provisions on cat and 

rabbit breeders. 

III. Costs and Benefits 

The benefits of this rule justify its 

costs. More pet animals sold at retail 

will be brought under the protection of 

the AWA and monitored for their health 

and humane treatment. Improved 

animal welfare will benefit buyers of 

pets and the general public in various 

ways. Monitoring the health and 

humane treatment of pet animals should 

reduce the number of pets receiving 

inadequate care and reduces the 

possibility of sick or injured pet animals 

being purchased sight unseen. When a 

buyer receives a sick or abused pet 

animal, sight unseen, the responsibility 

for correcting inadequate care has been 

effectively transferred from the seller to 

the buyer without the buyer’s 

knowledge or consent. If that buyer is 

unable or unwilling to provide the pet 

animal with needed care, a shelter may 

become the default caregiver for that 

animal. A reduction in the number of 

sick or abused pet animals received by 

buyers may reduce the number of such 

animals sent to shelters. Public shelters 

provide for the care of these unwanted 

pet animals, usually at local taxpayer 

expense. Also, as noted by several 

commenters, neglected or abused pet 

animals confiscated from substandard 

breeding operations are often sent to 

shelters to provide for their care. Newly 

regulated commercial breeders working 

to comply with AWA regulations will 

increase the health and well-being of the 

pet animals under their care. 

In addition, when breeding operations 

for which regulatory oversight is 

insufficient fail to adequately provide 

veterinary care for their animals, the 

buyer may subsequently incur greater 

costs associated with providing that care 

because needed care has been delayed. 

The rule will benefit buyers of animals 

by providing regulatory oversight to 

ensure that breeders provide necessary 

veterinary care. 

Animals can carry zoonotic diseases 

(diseases that can be transmitted 

between, or are shared by animals and 

humans). The possibility of an animal 

carrying a zoonotic disease is reduced 

with adequate veterinary care, including 

vaccinations. To the extent that 

improved oversight reduces the 

likelihood of pet-to-human transmission 

of zoonotic diseases such as rabies, the 

public as a whole will benefit from the 

rule. The rule will also address the 

competitive disadvantage of retail 

breeders who incur certain costs by 

adhering to AWA standards while retail 

breeders who do not operate their 

facilities according to AWA standards 

may bear lower costs. 

There is a great deal of uncertainty 

surrounding the number of facilities that 

will be affected by this rule, as we 

acknowledged in the proposed rule, and 

as evidenced in the public comments. 

There are hundreds of distinct dog 

breeds, and correspondingly large 

numbers of dog breeders in the United 

States. Breeders with an online presence 

are those most likely to be selling the 

offspring sight unseen and thus are 

more likely to be affected by this rule. 

We estimate that there could be between 

8,400 and 15,000 such breeders in the 

United States. This estimate is based on 

the assumption that for every five 

breeders identified by APHIS in online 

breeder registries there is one other 

breeder that has not been identified who 

also uses remote marketing methods. 

However, this rule will only affect 

those dog breeders who sell dogs as 

pets, not for hunting, security, breeding, 

or other purposes; who maintain more 

than four breeding females on their 

property; and whose buyers are not all 

physically present to observe the 

animals prior to purchase and/or to take 

custody of that animal after purchase. 

When these conditions are taken into 

account, we estimate that there are 

between 2,600 and 4,640 dog breeders 

that may be affected by this rule. 

The rule will also affect cat breeders 

who maintain more than four breeding 

females at their facilities and sell the 

offspring as pets, sight unseen. Fewer 

than 2 percent of cats in the United 

States are purebred and raised by 

breeders. We estimate that about 325 cat 

breeders may be affected by this rule. 

The rule will also affect rabbit 

breeders who sell the offspring as pets, 

sight unseen, which is not a common 

practice because rabbits are usually sold 

face-to-face at auctions, exhibits, and 

fairs where buyers are physically 

present. We estimate that no more than 

75 rabbitries may be affected by this 

rule. 

Newly regulated breeders will be 

subject to licensing, animal 

identification and recordkeeping 

requirements. In addition, affected 

entities will be subject to standards for 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57229 

3To view this document, go to http://

www.regulations.gov/#!documentDetail;D=APHIS2011-0003-8841. 

4To view the factsheet, go to http://

www.aphis.usda.gov/publications/animal_welfare/

2012/retail_pets_faq.pdf. 

facilities and operations, animal health 

and husbandry, and transportation. One 

set of costs attributable to the rule will 

be incurred annually by all newly 

regulated entities, such as licensing fees. 

Other costs will depend on the manner 

and extent to which entities are not 

complying with the basic standards of 

the AWA. Some of these costs will be 

one-time costs in the first year, such as 

providing adequate shelter; others will 

recur yearly, such as providing adequate 

veterinary care. 

The cost of a license for breeders is 

based on 50 percent of gross sales 

during the preceding business year. As 

an example, if 50 percent of gross sales 

are more than $500 but not more than 

$2,000, the annual cost of a license is 

$70. Identification tags for dogs and cats 

cost from $1.12 to $2.50 each. Other 

animals such as rabbits can be identified 

by a label attached to the primary 

enclosure containing a description of 

the animals in the enclosure. We 

estimate that the average licensed 

breeder requires about 10 hours 

annually to comply with the licensing 

paperwork and recordkeeping 

requirements. All newly licensed 

breeders will incur these costs. We 

estimate these costs would be between 

about $284 and $550 for a typical dog 

breeder. Costs at the 3,000 to 5,000 

newly licensed dog, cat, and rabbit 

breeders for animal licensing, animal 

identification and recordkeeping could 

range between $853,000 and $2.8 

million annually. 

The newly regulated breeders will 

also need to meet regulatory standards 

concerning facilities and operations, 

animal health and husbandry, and 

transportation. However, as 

acknowledged by a wide spectrum of 

commenters on the proposed rule, most 

breeders maintain their facilities well 

above the minimum standards of the 

AWA. Therefore, the vast majority of 

newly regulated breeders will only need 

to incur licensing, animal identification, 

and recordkeeping costs and not need to 

make structural and/or operational 

changes in order to comply with the 

standards. Neither the number of 

entities that will need to make changes 

nor the extent of those changes is 

known. Therefore, the overall cost of 

structural and operational changes that 

will be incurred due to this rule is also 

unknown. However, we can estimate the 

general magnitude of these costs by 

assuming the newly regulated entities 

exhibit patterns of noncompliance 

similar to those of currently regulated 

wholesale breeders. We agree with 

many comments we received that most 

breeders that may be affected by this 

rule are already substantially in 

compliance. 

Based on our experience regulating 

wholesale breeders, the most common 

areas of regulatory noncompliance at 

prelicensing and compliance 

inspections are veterinary care, facility 

maintenance and construction, shelter 

construction, primary enclosure 

minimum space requirements, and 

cleaning and sanitation. We apply 

percentages of noncompliance for these 

areas, multiplied by likely unit costs or 

cost ranges, to the estimated number of 

affected breeders described above to 

arrive at a total cost range for the rule. 

We estimate that costs for coming into 

compliance for currently noncompliant 

breeders could range from $2.9 million 

to $12.1 million in the first year, when 

both one-time structural changes will 

occur and annual operational changes 

will start. 

The rule will also affect some 

currently licensed wholesale breeders. 

Expanding the licensing exemption 

from three or fewer breeding females to 

four or fewer breeding females could 

reduce the number of these licensees. 

We expect that the number of current 

licensees that will fall below the 

exemption threshold following the 

implementation of this rule will be very 

small. 

The majority of businesses affected 

are likely to be small entities. As 

explained, this wide range in total cost 

is mainly derived from the uncertainty 

surrounding the total number of 

breeders that will need to become 

licensed as a result of this rule and the 

number that will then need to make 

structural or operational changes. It 

derives to a lesser degree from the 

ranges in costs that are assumed will be 

incurred by the newly licensed facilities 

to remedy instances of noncompliance. 

IV. Discussion of Comments 

We solicited comments on the 

proposed rule for 60 days ending July 

16, 2012. On July 16, 2012, we 

published in the Federal Register (77 

FR 41716, Docket No. APHIS–2011– 

0003) a document 3 announcing a 30- 

day extension of the comment period to 

give the public more time to submit 

comments. We also announced in that 

document the availability of a factsheet 4

regarding the provisions of the proposed 

rule. 

We received 75,584 individual 

comments, 134,420 signed form letters, 

and 213,000 signatures on petitions 

submitted by organizations supporting 

or opposing the proposed rule. The 

comments were from animal welfare 

organizations, kennel clubs, breed 

registries, organizations representing 

owners and trainers of working dogs, 

not-for-profit animal rescue and 

sheltering organizations, animal 

transporters, purebred dog and cat 

fanciers, residential breeders of dogs, 

cats, rabbits, rats, and other animals, 

USDA-licensed breeders, pet and pet 

supply stores, pet owners, farmers, 

veterinarians and veterinary 

organizations, horse and livestock 

owners and producers, raptor 

propagators, State governments, elected 

officials, including U.S. Senators and 

Representatives, and members of the 

public. The issues raised by the 

commenters are discussed below by 

topic. We address the issues in the order 

that they pertain to the regulatory text 

of the proposed rule, then address 

comments pertaining to oversight and 

enforcement, constitutionality and 

legality, and other topics. 

Dealer Definition 

We proposed to amend the definition 

of dealer in § 1.1 of the AWA 

regulations to mean: ‘‘Any person who, 

in commerce, for compensation or 

profit, delivers for transportation, or 

transports, except as a carrier, buys, 

sells, or negotiates the purchase or sale 

of: Any dog or other animal whether 

alive or dead (including unborn 

animals, organs, limbs, blood, serum, or 

other parts) for research, teaching, 

testing, experimentation, exhibition, or 

for use as a pet, or any dog at the 

wholesale level for hunting, security, or 

breeding purposes. This term does not 

include: A retail pet store, as defined in 

this section; any retail outlet where dogs 

are sold for hunting, breeding, or 

security purposes; or any person who 

does not sell or negotiate the purchase 

or sale of any wild or exotic animal, 

dog, or cat and who derives no more 

than $500 gross income from the sale of 

the animals other than wild or exotic 

animals, dogs, or cats during any 

calendar year.’’ This proposed 

amendment to the definition of dealer 

was necessary in order to eliminate 

inconsistencies between that definition 

and our proposed definition of retail pet 

store. 

In the paragraphs that follow, we use 

discrete portions of the proposed 

definition as section headings to 

organize our discussion of the 

comments we received on various 

aspects of the proposed definition. Later 

in this document we take the same 

approach in our discussion of the 


pmangrum on DSK3VPTVN1PROD with RULES
57230 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

comments received on the proposed 

definition of retail pet store and the 

proposed revisions to the exemptions 

from licensing contained in the AWA 

regulations. 

Dealer: ‘‘Any person who, in 

commerce, for compensation or profit 

. . .’’ 

A number of commenters stated that 

APHIS had failed to define the terms 

‘‘commerce’’ and ‘‘compensation’’ as the 

terms are used in the definition of 

dealer. Specifically, they noted that 

private animal rescues and shelters that 

suggest a self-determined donation are 

not operating in commerce or 

attempting to obtain compensation or 

profit and thus do not fall under the 

definition of dealer (see also the section 

below titled ‘‘Requests for Additional 

Exemptions’’). Likewise, many 

commenters stated that the business 

model of rescue and shelter 

organizations is clearly different from 

that of dealers in that it involves neither 

compensation nor profit, and for that 

reason all rescues and shelters should 

be exempt from licensing. Several 

commenters stated that it is illegal for 

501(c)(3)s to require compensation or to 

attempt to profit from any services that 

they provide; one of these commenters 

expressed concern that, if requests for 

donations by private animal rescues or 

shelters are considered to be commerce 

or compensation, those organizations 

would be forced to pay Federal, State, 

and/or local taxes on every sale of a 

rescued or abandoned animal. 

On the other hand, some commenters 

noted that animal shelter and rescue 

organizations that transport and offer for 

adoption rescued dogs and cats employ 

a business model that does not 

significantly differ from those of many 

dealers. The commenters also noted that 

rescues often request substantial 

adoption fees for their services and that 

those fees constitute compensation. 

Many of these commenters concluded 

that such organizations should therefore 

be regulated as dealers. 

We consider private rescues and 

shelters that perform any of the 

activities listed in the definition of 

dealer, including transporting or 

offering animals for compensation, to be 

dealers. We consider acts of 

compensation to include any 

remuneration for the animal, regardless 

of whether it is for profit or not for 

profit. Remuneration thus includes, but 

is not limited to, sales, adoption fees, 

and donations. 

We note, however, that dealers are 

only required to be licensed if they do 

not meet any of the exemptions in the 

regulations. Many private rescues and 

shelters operate under a business model 

in which representatives for the rescue 

or shelter and the animals available for 

sale or adoption are physically present 

at a location where the public is 

encouraged to personally observe the 

animals; this business model is 

consistent with our definition of retail 

pet store. As a result, private rescues 

and shelters with this business model 

have historically been exempted under 

the retail pet store exemption in 

§ 2.1(a)(3)(i) and will continue to be 

exempted. 

Finally, we consider such rescues and 

shelters to be retail pet stores only for 

the purposes of our regulations. 

Whether any other Agency or 

jurisdiction defines such an 

organization as a retail pet store for 

taxation or any other purpose is beyond 

our purview. 

One commenter asked whether the 

proposed rule establishes a new class of 

licensee to be categorized in the same 

manner as existing dealers, and if so, it 

is unclear how APHIS could treat the 

new dealers differently from those 

existing licensees. 

We are not establishing a new class of 

licensee. All newly licensed dealers 

would be subject to the same 

requirements as dealers who are 

currently licensed. 

Dealer: ‘‘Including unborn animals, 

organs, limbs, blood, serum, or other 

parts. . . .’’ 

One commenter stated that she 

frequently purchases semen in order to 

impregnate female dogs that cannot 

travel to stud because of distance or risk 

to health. The commenter added that 

she does not sell the female dogs or 

their offspring and for that reason 

should not be considered a dealer. 

Unless an individual buys or sells, at 

retail, or transports semen or unborn 

animals for one of the six purposes 

listed in the definition of dealer 

(research, teaching, testing, 

experimentation, exhibition, or use as a 

pet), the individual is not a dealer. The 

activities described by the commenter 

do not fall under any of the listed 

purposes. 

The same commenter asked whether 

individuals involved in transporting a 

female dog back from a stud after 

breeding would be considered dealers, 

since the female dog is presumed to be 

carrying an unborn animal within it at 

that time. 

We consider persons transporting 

pregnant female dogs in retail commerce 

for breeding purposes to be exempted 

from licensing, as this purpose is not 

one of the six purposes listed in the 

definition of dealer. 

Dealer: ‘‘For research, teaching, 

testing, experimentation, exhibition, or 

for use as a pet...’’ 

Several commenters stated that they 

sold animals at retail for purposes other 

than the six specified in the definition 

of dealer. These commenters stated that 

they believed themselves to be outside 

of the scope of dealers and thus not 

subject to licensing but asked for 

clarification. Some of these commenters, 

including dog, cat, and rabbit dealers, 

stated that they sold or transported 

animals only in order to preserve 

bloodlines. The commenters who 

mentioned rabbits also stated that most 

rabbit breeders sell rabbits for one of 

three purposes: Food, fur, or 

preservation of bloodlines. 

One commenter stated that, if APHIS 

were to indicate that all individuals 

who buy, sell, or transport animals for 

the preservation of bloodlines (i.e., 

breeding purposes) are not within the 

scope of dealer, it could provide a 

loophole for dealers to evade regulatory 

oversight. That being said, the 

commenter suggested that individuals 

who buy, sell, or transport a dog for 

which there are fewer than 100 

registered litters in the United States 

should be allowed to state that they are 

acting solely to preserve rare bloodlines. 

If an individual is selling animals at 

retail for breeding purposes, that 

individual is not a dealer. We do, 

however, share the commenter’s 

concern that claiming breeding 

purposes as the purpose for an animal’s 

retail sale could be subject to abuse. 

Therefore, if we were to receive word 

that individuals making such claims are, 

in fact, marketing their animals as pets, 

we would consider this to be grounds 

for initiating an investigation to resolve 

the matter. 

Another commenter stated that he 

bred and sold dogs for participation in 

agility competitions and asked if he 

would be considered a dealer. 

We are making no changes in 

response to this comment. It has been 

our experience that dogs that participate 

in agility competitions are primarily 

marketed as personal or family pets. An 

individual selling dogs at retail for use 

as pets would be considered a dealer. 

Dealer: ‘‘Any retail outlet where dogs 

are sold for hunting, security, or 

breeding purposes . . .’’ 

Many commenters stated that if the 

purpose of this clause is to exempt 

sellers and buyers of working dogs from 

being dealers, its description is too 

limited in scope. The commenters cited 

a number of different uses for a dog— 

a companion animal for individuals 

with disabilities, a guide dog, a herd or 

livestock dog, a sled dog, or a rescue 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57231 

dog—that do not fall within the scope 

of these uses but that require a dog to 

be trained to perform a specific 

function. The commenters urged us to 

expand the exemption to cover 

additional uses or to amend it to specify 

that it covers dogs sold at retail for work 

purposes. 

Individuals who sell or buy dogs at 

retail for any purpose other than the six 

listed in the definition of dealer are not 

dealers. The examples cited in the 

exemption (hunting, security, or 

breeding purposes) are only intended to 

illustrate other purposes for buying or 

selling a dog at retail. As commenters 

pointed out, those examples are not 

exhaustive, and there are many other 

purposes that a dog can be used or 

trained for that are not included under 

the definition of dealer. 

Finally, we note that persons selling 

dogs at the wholesale level for hunting, 

security, or breeding purposes are 

considered to be dealers. 

Several commenters stated that they 

sold dogs at retail only for hunting, 

security, or breeding purposes but that 

sometimes birth defects, genetic 

anomalies, poor temperament, or other 

flaws preclude them from selling some 

of the offspring for those purposes. 

Other commenters stated that they 

imported and maintained dogs for use 

in working dog programs, but 

occasionally if a dog did not work out 

as a working animal, it would be sold 

at retail as a pet. The commenters asked 

whether they were covered by the 

exemption. 

Individuals who intend to breed and 

sell dogs at retail as working dogs may 

occasionally raise a dog that lacks the 

characteristics that would enable it to be 

sold or used for its intended working 

purpose. As long as the individual 

originally intended to raise and sell the 

dog at retail for that purpose and the 

individual continues to market his or 

her dogs for that purpose, the individual 

could sell that dog at retail and remain 

exempt. 

Another commenter asked whether a 

person operating a multi-use retail 

facility, in which some dogs were sold 

at retail for hunting or security and 

others were sold for other purposes, 

would be considered a dealer. 

Any person selling dogs at retail for 

one of the six purposes stated in the 

definition of dealer, including as pets, 

would be considered a dealer. If the 

dogs intended to be sold as pets at a 

multi-use retail facility are commingled 

with dogs intended to be sold for 

purposes other than one of the six in the 

definition of dealer, all parts of the 

multi-use facility would be subject to 

regulation. 

One commenter stated that he sold 

dogs at retail for hunting, but did so 

from his home rather than from an 

outlet. The commenter asked whether 

he was still exempt from being 

considered a dealer. 

An individual selling dogs at retail 

solely for hunting purposes is not a 

dealer. 

One commenter asked how APHIS 

determines from a seller that a dog sold 

for hunting, herding, or other work will 

not also be used as a pet. 

In making such a determination, we 

consider the manner in which the seller 

markets his or her animals and gather 

feedback from buyers and State, county, 

and local authorities. 

Dealer: ‘‘Who does not sell or 

negotiate the sale of any wild or exotic 

animal, dog, or cat and who derives no 

more than $500 gross income from the 

sale of [such animals] during any 

calendar year.’’ 

Excluded under the definition of 

dealer is any person who does not sell 

or negotiate the purchase or sale of any 

wild or exotic animal, dog, or cat and 

who derives no more than $500 gross 

income from the sale of animals other 

than wild or exotic animals, dogs, or 

cats during any calendar year. A number 

of sellers stated that the costs of animal 

breeding have risen significantly in 

recent years and a $500 limit for this 

exemption is too low. They asked that 

it be adjusted upwards to compensate 

for inflation. On the other hand, several 

commenters stated that the $500 de 

minimis exemption is too high. 

The gross income limit is set by the 

AWA. However, it is important to note 

that, under the proposed rule, there are 

a number of other ways that persons 

who sell animals covered by this 

exemption (including rabbits, guinea 

pigs (cavies), and rats) can be exempted 

from licensing, either by not meeting the 

definition of dealer in § 1.1 or through 

one or more of the licensing exemptions 

in § 2.1 (see the section below titled 

‘‘Retail Pet Store: ‘‘. . . rabbits, guinea 

pigs . . .’’). 

Several commenters asked why sales 

of dogs or cats are not covered by this 

exemption, and suggested it be amended 

to exempt individuals who derive no 

more than $500 gross income from the 

sale of any animals listed in the 

definition of dealer. 

The AWA does not include dogs and 

cats under this particular exemption. 

Dealer: Discrepancy with the 

definition of ‘‘pet animal’’ 

One commenter noted a discrepancy 

between the list of animals covered 

under the definition of pet animal and 

animals listed in the definition of dealer 

in § 1.1. The commenter stated that this 

discrepancy was likely to result in a 

degree of confusion among breeders 

regarding whether they fell under the 

regulations as a dealer. In order to 

clarify the definition of pet animal, the 

commenter suggested amending the 

definition to read as follows: ‘‘Pet 

animal’’ means any animal that has 

commonly been kept as a pet in family 

households in the United States, such as 

dogs, cats, guinea pigs, rabbits, and 

hamsters. This term excludes: (1) Any 

wild or exotic or other non-pet species 

of warm-blooded animals (except birds), 

such as skunks, raccoons, nonhuman 

primates, ocelots, foxes, coyotes, etc.; 

and (2) animals sold at retail in 

commerce for any of the following 

purposes: hunting, security, breeding, 

food, or fiber (including fur).’’ 

We are making no change in response 

to this comment. Animals listed under 

the definition of dealer are there for the 

purpose of indicating which persons are 

subject to regulation and focus on the 

type of animal and how it is bought, 

sold, or transported in commerce. 

Animals listed under the definition of 

pet animal provide examples of ‘‘pets’’ 

as that term is used in the definition of 

dealer. 

Retail Pet Store Definition 

We proposed to revise the definition 

of retail pet store so that it would mean 

‘‘a place of business or residence that 

each buyer physically enters in order to 

personally observe the animals available 

for sale prior to purchase and/or to take 

custody of the animals after purchase, 

and where only the following animals 

are sold or offered for sale, at retail, for 

use as pets: Dogs, cats, rabbits, guinea 

pigs, hamsters, gerbils, rats, mice, 

gophers, chinchillas, domestic ferrets, 

domestic farm animals, birds, and 

coldblooded species.’’ We also proposed 

to specify that persons who meet the 

criteria for an exemption from licensing 

in § 2.1(a)(3)(iii) of the AWA regulations 

are retail pet stores. 

Retail Pet Store: ‘‘A place of business 

or residence . . .’’ 

Several commenters wanted to know 

why, in revising the definition of retail 

pet store, we had removed the word 

‘‘outlet’’ and added the words ‘‘place of 

business or residence.’’ 

‘‘Outlet’’ as used in the definition has 

always referred simply to the activity of 

retailing animals, not necessarily within 

the confines of a ‘‘brick-and-mortar’’ pet 

store or even a physical location. 

Accordingly, ‘‘outlet’’ in this context 

can include the sale of animals sight 

unseen, which is the retail activity that 

we proposed to regulate. For this reason, 

we proposed removing the word 


pmangrum on DSK3VPTVN1PROD with RULES
57232 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

5See footnote 4. 

6 Doris Day Animal League v. Veneman, 01–5351: 

published 1/23/2003. Doris Day Animal League 

filed a rulemaking petition with the Agriculture 

Department, urging a change in the regulatory 

definition of ‘‘retail pet store’’ so that residential 

operations would not be exempted. On March 25, 

1997, the Secretary published the petition in the 

Federal Register (62 FR 14044) and received more 

than 36,000 comments. On July 19, 1999, when the 

Secretary announced in the Federal Register that he 

would retain the definition, and stated the reasons 

why (64 FR 38546), Doris Day Animal League and 

other organizations and individuals concerned 

about the mistreatment of dogs brought this action 

for judicial review. 

‘‘outlet’’ and replacing it with ‘‘place of 

business or residence.’’ 

A commenter stated that, by removing 

the word ‘‘outlet’’ and thus removing 

sight unseen sales from the scope of the 

retail pet store definition, we had 

fundamentally reinterpreted the implicit 

meaning of ‘‘retail’’ within the AWA. 

The commenter stated that ‘‘retail’’ has 

always been understood to mean sale 

directly to the consumer and added that 

the method of delivery does not change 

the underlying structure of the retail 

transaction. Similarly, several 

commenters pointed out that sight 

unseen sales were fairly common during 

the time period when Congress passed 

the AWA, but are not mentioned within 

the Act as an activity that contributes to 

animal neglect or abuse; these 

commenters concluded that the AWA 

must therefore consider retail sales of 

pets to include sight unseen sales. 

We disagree with the commenters that 

we reinterpreted the meaning of ‘‘retail’’ 

in relation to the AWA, or that the AWA 

includes sight unseen sales within the 

scope of retail sales. It is our contention 

that the AWA envisioned a retail pet 

store as a business in which the seller, 

buyer, and animal are physically 

present so that every buyer can 

personally observe the animal for sale 

prior to purchasing and/or taking 

custody of that animal, thus ensuring 

that the animals were monitored for 

humane care and treatment. 

In the factsheet,5 we clarified our 

proposed change to the retail pet store 

definition by noting that pet animal 

retailers who sell their animals to 

customers in face-to-face transactions at 

a location other than their premises are 

also subject to some degree of public 

oversight, and therefore we would not 

regulate them for that activity. 

Several commenters stated that the 

factsheet is inconsistent with the 

proposed rule because a face-to-face 

transaction at any location other than a 

fixed residence or place of business is 

substantively different from going to 

that residence or place of business to 

observe animals offered for sale. 

Although the AWA does not define 

‘‘retail pet store,’’ the Act exempted 

retail sellers of pets from licensing 

pursuant to the Act. As we mentioned 

above, it is our contention that it did so 

because sellers, buyers, and animals are 

physically present at retail pet stores so 

that buyers can personally observe the 

animals before taking custody of those 

animals, thus ensuring that the animals 

are monitored for humane care and 

treatment. Personal observation of an 

animal offered for sale can and does 

take place at locations other than a 

‘‘brick-and-mortar’’ pet store, so 

restricting the definition of retail pet 

store to ‘‘brick-and-mortar’’ stores is 

unnecessary and not in keeping with the 

intent of the AWA. 

A few commenters asked for a 

definition of a ‘‘face-to-face’’ 

transaction. 

We consider a face-to-face transaction 

as one in which the seller, buyer, and 

the animal available for sale are 

physically present so that every buyer 

may personally observe the animal prior 

to purchasing and/or taking custody of 

that animal. While the seller’s presence 

at this transaction was implicit in our 

proposed definition of retail pet store, 

we are amending the definition to 

actually include the word ‘‘seller’’ in 

order to underscore his or her presence. 

Several commenters stated that, while 

the intent of our proposed changes was 

likely to exempt small-scale residential 

breeders from licensing, labeling such 

breeders as a retail pet store has 

unintended adverse effects. Many 

commenters pointed out that local 

zoning codes often prohibit retail stores 

in areas designated for residential use, 

while others stated that State and local 

tax codes often require retail stores to 

file differently from ‘‘hobby businesses’’ 

and asked whether APHIS had 

considered these implications. One 

breeder asked whether, pursuant to 

Internal Revenue Service Code Section 

183, being considered a retail pet store 

by APHIS would allow him to claim 

‘‘for profit’’ status and increase the 

number of itemized deductions he could 

claim on his tax form. 

We used the term retail pet store only 

for the specific purpose of defining 

certain persons who sell pets at retail as 

retail pet stores, thus exempting them 

from licensing pursuant to the AWA. 

One commenter suggested that we 

should remove the words ‘‘or residence’’ 

and the reference to § 2.1(a)(3)(iii) from 

the retail pet store definition and 

instead specify that hobby breeders fall 

under the definition of retail pet store. 

The commenter stated that we could 

define the term ‘‘hobby breeder’’ in the 

manner specified in current USDA 

Animal Care guidance for dealers, 

transporters, and researchers: ‘‘Smallscale breeders with gross sales under 

$500 per year, provided that such sales 

do not include wild or exotic animals, 

dogs, or cats; and/or small-scale 

breeders with four or fewer breeding 

cats and dogs who sell the offspring.’’ 

The definition of ‘‘hobby breeder’’ 

provided by the commenter is our 

longstanding understanding of that 

term. However, we are retaining the 

word ‘‘residence’’ in the definition of 

retail pet store because we established 

in Doris Day Animal League (DDAL) v. 

Veneman 6 that we consider residential 

breeders selling pets at retail to be 

included under the exemption of ‘‘retail 

pet stores’’ in the AWA. 

Retail Pet Store: ‘‘That each buyer 

physically enters. . . .’’ 

Many commenters objected to the 

provision that each buyer be required to 

enter the premises where animals are 

offered for sale. Some of them presented 

a number of different scenarios in 

which, they stated, it would be 

impracticable to have each buyer 

personally observe the animal prior to 

purchasing and/or taking custody of it 

after purchase. Suggested scenarios 

included sales to foreign customers; 

sales to disabled or elderly customers 

for whom travel to the buyer is a health 

risk; and sales of a rare breed, with a 

handful of geographically dispersed 

owners, for preservation of bloodlines. 

Many of these commenters added that 

personally delivering animals to buyers 

would also be impractical and costly. 

We proposed this provision because it 

is our contention that the AWA 

considers a retail pet store to be one in 

which the buyer, seller, and animal are 

physically present so that every buyer 

can personally observe the animal 

available for sale prior to purchasing 

and/or taking custody of that animal. 

Animals that are sold at retail sight 

unseen are not personally observed by 

buyers prior to purchase. However, it is 

important to note that we consider the 

buyer of a pet animal sold at retail to be 

the person who takes custody of the 

animal after purchase, even if this 

person is not the ultimate owner of the 

animal. Bearing this in mind, we 

consider many of the scenarios 

presented by commenters to pertain to 

issues that would preclude the ultimate 

owner of the animal, not the buyer, from 

being physically present to observe the 

animals. However, a carrier or 

intermediate handler cannot be 

designated as the buyer. 

Retailers who, for whatever reason, do 

not consider it possible for each buyer 

to personally observe their animals prior 

to purchasing them and/or taking 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57233 

custody of them may still be exempt 

from licensing if they do not sell the 

animals at retail for one of the six 

purposes covered under the definition 

of dealer. If they sell the animals at 

retail for one of those six purposes, but 

maintain four or fewer breeding females 

and sell only the offspring born and 

raised on their premises, they are also 

exempt from licensing. 

Those who own more than four 

breeding females and wish to continue 

selling the offspring as pets, sight 

unseen, can do so by obtaining a license 

and allowing APHIS inspectors to 

inspect their facility. As explained in 

the economic analysis prepared for this 

final rule, the costs associated with 

being licensed will be relatively low for 

all but that small percentage of newly 

licensed breeders who are not currently 

compliant with the AWA standards. 

Commenters who cited the need to 

engage in sight unseen sales to preserve 

a bloodline often cited animal health 

risks associated with not doing so. An 

organization representing a rare dog 

breed, for example, stated that sightunseen sales of its breed for breeding 

purposes are necessary in order to keep 

the breed from becoming extinct. The 

commenter stated that when the breed 

is deprived of a wide genetic pool, fatal 

heritable conditions can begin to appear 

within the breed. Several other breeders 

of rare dogs, cats, and rabbits made 

similar claims. Several small-scale 

residential breeders stated that their 

practice of occasionally shipping 

animals to each other for stud services 

will no longer be possible and result in 

less genetic diversity for their breed. 

We do not expect licensing of some 

breeders to result in the extinction of 

rare breeds, an increase in health issues, 

or a decrease in genetic diversity. A 

person who sells and ships animals at 

retail for breeding purposes is not 

considered a dealer and thus not subject 

to licensing. Such persons could 

continue selling at retail and shipping 

animals sight unseen as long as the 

animal is used for breeding purposes 

and not for any of the six purposes 

listed under the definition of dealer in 

§ 1.1. 

One commenter asked how recently 

buyers must have visited a facility 

before a seller can sell them a pup 

remotely. As an example, the 

commenter wanted to know whether, if 

buyers visited her facility 2 years earlier 

to buy a pup, she could remain exempt 

if she shipped them a second pup 

without them visiting her a second time. 

As indicated in our revised definition 

of retail pet store, each purchase of a pet 

animal requires that the seller, buyer, 

and the animal available for sale are 

physically present so that every buyer 

may personally observe the animal prior 

to purchasing and/or taking custody of 

that animal after purchase. Accordingly, 

if the buyers observed this second pup 

during their visit, this condition is 

fulfilled. If they did not (e.g., if the pup 

was not yet born when the prior 

transaction took place), this condition is 

not fulfilled. 

Several commenters opposed to the 

rule questioned APHIS’ basis in 

assuming that sight unseen sales of pet 

animals necessarily constitute a 

potential risk to animal welfare. To 

support their point, many of these 

commenters stated that they regularly 

buy healthy animals sight unseen or sell 

healthy animals sight unseen to satisfied 

customers. The commenters pointed out 

that in the proposed rule, APHIS had 

failed to quantify the number of 

complaints that had arisen regarding 

sight unseen sales of animals, the 

percentage of complaints that came from 

unique customers, and the relative 

severity of the complaints. The 

commenters also noted that APHIS did 

not conduct a survey of all individuals 

who buy animals sight unseen to see 

what percentage of them were satisfied 

with the welfare of the animals they 

purchased. 

On the other hand, several 

commenters supporting the rule 

provided accounts of sick and injured 

pet animals that they had bought sight 

unseen or had been bought by others 

known to them. Several veterinarians 

commented that pet animals bought 

sight unseen by their owners were often 

brought to their clinics with a wide 

range of health problems. 

The primary purpose of the proposed 

rule was to revise the definition of retail 

pet store so that it is consistent with the 

AWA. It is our contention that the AWA 

exempted pet retailers from licensing 

because the seller, buyer, and animal are 

physically present in the same place so 

that the buyer can personally observe 

the animal available for sale prior to 

purchasing and/or taking custody of that 

animal, thus monitoring them for 

humane care and treatment. This 

physical presence and personal 

observation does not occur when 

retailers sell and ship pets sight unseen. 

A few commenters stated that they 

had sold animals sight unseen in the 

past but no longer did so, and asked 

that, if the proposed rule is finalized, 

whether the scope of this definition 

should not be retroactively applied to 

them. 

The effect of this rulemaking and its 

enforcement would not be retroactive to 

any prior actions. 

A number of commenters expressed 

concern that using the Internet or news 

media to generate customers would 

result in a loss of the exemption from 

licensing. Many commenters also 

expressed uncertainty whether any 

remote sales completed over the Internet 

will automatically subject them to 

licensing requirements, even if the 

buyer picks up the animal in person 

after buying it online. One commenter 

expressed concern that she would be 

considered an Internet seller because 

she has posted sales ads online in the 

past. 

We are not regulating the use of the 

Internet (or any other method of sale). 

Sellers are free to use the Internet to 

advertise or sell pet animals, provide 

information to buyers, and conduct 

other related activities. Indeed, a seller 

who sells over the Internet could still be 

considered a retail pet store provided 

that, before the buyer takes custody of 

the animals purchased, the seller, buyer, 

and animals have been physically 

present in one location so that the buyer 

may personally observe the animals. 

A number of commenters stated that 

they preferred the alternative set forth in 

the proposed rule that considered a 

regulatory threshold based on 

percentage of sight unseen sales. The 

commenters challenged APHIS’ 

assertion that it has no authority under 

the AWA to require retail pet stores to 

make and retain sales records, and 

asked, if this is the case, how APHIS 

currently determines that a person 

meets the exemption from licensing in 

§ 2.1(a)(3)(iv) of the regulations. 

Persons who are exempt from 

licensing under the AWA cannot be 

required under the AWA regulations to 

keep records. The commenter’s question 

about § 2.1(a)(3)(iv) addresses how we 

determine a person’s eligibility for an 

exemption without requiring them to 

keep records. This exemption applies to 

persons selling fewer than 25 dogs and/ 

or cats each year for research, teaching, 

or testing purposes. We determine a 

person’s exemption eligibility by 

inspecting records kept by the research, 

teaching, and testing facilities that buy 

these animals. These facilities are 

required under the AWA to document 

when and from whom the animals are 

purchased. 

The same commenters pointed out 

that APHIS’ stated second reason for not 

establishing a threshold, that animals 

sold sight unseen could be kept under 

conditions different from those sold to 

walk-ins, is not resolved by eliminating 

sight unseen sales from the exemption. 

The commenters pointed out that a 

large-scale breeder could appear to be in 

compliance with the regulations by 


pmangrum on DSK3VPTVN1PROD with RULES
57234 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

establishing a ‘‘brick-and-mortar’’ 

facility for walk-ins while engaging 

surreptitiously in sight unseen sales of 

animals bred at another location. The 

commenters stated that an exemption 

based on percentage of retail sales 

would be likely to dissuade such 

abuses. Another commenter noted that, 

for many small-scale residential dog 

breeders, sight unseen sales constitute 

20 percent of annual sales. The 

commenter stated that APHIS should 

therefore adopt an ‘‘80/20’’ threshold of 

face-to-face to sight unseen sales. 

We have no evidence to indicate that 

allowing retail pet stores to conduct a 

percentage of their sales sight unseen 

would discourage large-scale breeders 

from engaging in fraudulent practices, 

nor do we have information to indicate 

why an 80/20 ratio of face-to-face to 

sight unseen sales would be 

appropriate. 

A few commenters asked that the final 

rule ‘‘grandfather in’’ existing 

relationships with remote customers, 

and specify that after the effective date 

of the rule each new buyer would have 

to physically enter a place of business 

or residence. 

We are making no changes in 

response to the comments. As noted 

above, persons who are exempt from 

licensing under the AWA cannot be 

required under the AWA regulations to 

maintain the records necessary to 

monitor and enforce such an approach. 

Retail Pet Store: ‘‘That each buyer 

physically enters. . . .’’ 

A few commenters asked whether a 

buyer could use an agent to serve in his 

or her place. 

As we mentioned above, for purposes 

of our definition of retail pet store, we 

consider the buyer to be the person who 

takes custody of the animal after 

purchase. This person may differ from 

the ultimate owner of the animal but 

cannot be acting as a carrier or 

intermediate handler. 

Retail Pet Store: ‘‘That each buyer 

physically enters. . . . ’’ 

A number of commenters asked why 

a buyer’s physical presence at a place of 

business or residence was necessary to 

protect animal welfare. The commenters 

pointed out that Web-based 

technologies allow buyers to ‘‘virtually’’ 

observe animals that are for sale. On the 

other hand, several commenters pointed 

out that virtual technologies can be 

manipulated to provide an inaccurate 

depiction of animal care at a seller’s 

premises. 

While many breeders use Web-based 

technologies to provide buyers with 

visual and other information about the 

animals they sell, we agree with the 

commenters’ point that such 

technologies can be used to inaccurately 

depict the health and condition of the 

animal for sale. 

Several commenters suggested 

amending the definition to allow buyers 

the option to waive the requirement to 

physically enter the seller’s place of 

business or residence to observe the 

animals offered for sale. The 

commenters stated that this would 

prevent buyers who have an existing 

relationship with a seller from having to 

travel long distances to view animals 

when they felt confident about the care 

standards provided by the seller. A few 

commenters stated that this waiver 

should be in writing as documentary 

proof. 

One commenter suggested that the 

regulations should require that the seller 

have a return policy and that language 

requiring physical entry of the business 

or place of residence be removed from 

the definition of retail pet store. The 

commenter suggested that we define 

return policy as ‘‘a written policy 

provided to a purchaser in a sales 

contract that contains provisions for 

returning the animal, reimbursing the 

purchaser, and adjudicating disputes.’’ 

The commenter stated that return 

policies ultimately foster animal 

welfare, since sellers that provide poor 

care for their animals are subject to 

frequent returns and less able to turn a 

profit. 

We are making no change in response 

to these comments. Waivers and return 

policies used in place of requiring 

buyers to observe the animals face-toface would be appropriate for a rule 

focused on consumer protection, not 

animal welfare, and could result in 

instances in which retail pet stores sold 

animals to buyers without the buyers 

being physically present to personally 

observe the animals prior to purchasing 

and/or taking custody of them. This 

would be inconsistent with the AWA. 

Some commenters noted that the 

proposed rule provides no evidence that 

purchasing or shipping animals sight 

unseen jeopardizes animal welfare and 

treatment. Several of these commenters 

pointed to various scenarios as 

examples in which such sales could be 

conducted sight unseen and without 

significant risk, such as when the buyer 

is a repeat customer with whom the 

seller has previously done business, 

when the buyer and seller are relatives 

or close friends for whom a preexisting 

relationship exists, or when the breed is 

so rare that each breeder is personally 

known within the community of 

potential buyers. One commenter, a 

State association of dog owners, cited 

the results of an informal survey 

showing that most of its members 

buying dogs sight unseen over the 

Internet saw few or no health problems 

in the dogs they purchased. Conversely, 

a veterinary medical association cited a 

study concluding that breeders who 

advertise on large-scale puppy sales 

Web sites and sell to customers sight 

unseen are less knowledgeable about 

breed-specific health issues compared to 

national parent club breeders, and that 

such breeders are often less likely to 

perform screening tests on their 

breeding dogs to detect undesirable 

heritable health risks. 

We are making no changes in 

response to these comments. Retail sales 

that are entirely sight unseen do not 

require the buyer to be physically 

present in order to personally observe 

the animal available for sale prior to 

purchasing and/or taking custody of that 

animal. It is our contention that this 

concept of physical presence for the 

purposes of personal observation is 

consistent with the AWA’s use of the 

term retail pet store. 

Retail Pet Store: ‘‘That each buyer 

physically enters. . . . ’’ 

A significant number of residential 

breeders objected to this provision. 

Many of the commenters cited human 

health and safety concerns and others 

cited animal health risks associated 

with opening their residence to buyers. 

They pointed out that many diseases of 

dogs, in particular, are zoonotic, and 

that buyers who are ill may transmit 

diseases to animals at their residences. 

Several of these commenters also stated 

that they had no way of knowing the 

disease status of any animals with 

which a buyer has recently come in 

contact, and expressed concern that 

clothing could serve as fomites 

(inanimate objects or substances capable 

of transmitting infectious organisms 

from one individual to another) for 

diseases of dogs. A few commenters 

stated that their animals become 

agitated when strangers enter their 

premises and stated that requiring 

buyers or inspectors to enter could 

therefore adversely impact animal 

welfare. 

A place of business can be any 

location in which the seller, the buyer, 

and the animal are physically present so 

that every buyer can personally observe 

the animal offered for sale prior to 

purchasing and/or taking custody of that 

animal(s) after purchase. 

On the other hand, several 

commenters stated that, for the sake of 

animal welfare, buyers need to 

personally observe the breeding and 

living conditions of animals available 

for sale prior to purchasing and/or 

taking custody of those animals. The 

commenters suggested that we amend 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57235 

the definition of retail pet store to 

specify that buyers must be able to see 

these conditions. 

Such an amendment would make the 

definition of retail pet store in our 

regulations significantly more restrictive 

than its meaning in the AWA. The AWA 

neither authorizes nor requires public 

oversight of breeding stock or the 

premises on which animals for sale at 

retail are maintained. 

Several commenters stated, both 

before and after issuance of the APHIS 

factsheet, that face-to-face sales at a 

mutually agreed-upon location should 

suffice in lieu of physically entering a 

fixed place of business or residence. 

Animal rescue organizations, in 

particular, supported this point by 

noting that buyers seldom visit their 

primary location, but that they always 

have face-to-face interaction with buyers 

at adoption events or when delivering 

the animal to the buyer. 

Such a face-to-face interaction is 

consistent with the AWA. 

One commenter suggested that we 

require a seller to have face-to-face 

interaction with the buyer at some point 

prior to purchase and/or taking custody 

of an animal, but suggested that we 

decouple this from personal observation 

of the animal. The commenter stated 

that this would allow breeders who had 

developed long-standing relationships 

with existing buyers to ship dogs sight 

unseen while meeting the intent of the 

rule as they understood it. Another 

commenter agreed and pointed out a 

number of scenarios in which the 

breeder would be known to the buyer, 

but may not visually inspect the animals 

before purchase (buying from a blood 

relative or close friend, buying from a 

breeder with whom one has previously 

done business, and buying under time 

constraints that do not allow for visual 

inspection of the animal). 

We are making no changes in 

response to these comments. The 

definition of retail pet store is consistent 

with the AWA in that it requires that the 

seller, buyer, and the animal available 

for sale be physically present so that 

every buyer can personally observe the 

animal prior to purchasing and/or 

taking custody of that animal. 

A few commenters stated that, instead 

of requiring the buyer to enter the 

premises to observe the animal before 

purchase and/or taking custody, we 

should require all animals sold at a 

place of business or residence to be 

accompanied by a certificate of 

veterinary inspection attesting to their 

health and freedom from genetic 

disorders in order for that place of 

business or residence to meet the 

definition of retail pet store. Other 

commenters similarly noted that the 

required health certificate currently 

issued by a veterinarian for animals 

being shipped should be sufficient proof 

that the animal is in good health and 

that therefore entering the premises to 

observe the animal before purchase is 

unnecessary. Similarly, another 

commenter asked that if a dog is 

shipped internationally whether the 

requirements for shipping the dog 

(airline health certificate, USDA 

endorsed certificate, shot records) could 

be used in lieu of a face-to-face 

transaction. 

On the other hand, several 

commenters questioned the efficacy of 

veterinary certificates generally, stating 

that they had bought a pet that was 

accompanied by a veterinary certificate 

only to later discover the animal had a 

genetic condition or longstanding 

malady. For this reason, the commenters 

stated APHIS should review its policing 

of health certificates issued for dogs in 

transit to ensure that certificates are 

valid. 

We are making no changes in 

response to these comments. Persons 

exempted from licensing under the 

AWA, such as retail pet stores, are not 

required to obtain a veterinary health 

certificate when shipping an animal via 

commercial transport. For those 

licensees required to obtain such a 

certificate from a licensed veterinarian, 

the certificate only affirms that transport 

of the animal is not likely to pose a 

health risk to that animal or to other 

animals in transit. No relationship exists 

between issuance of a health certificate 

for an animal and the standard of care 

provided by the seller receiving the 

certificate. Finally, regardless of a 

certificate, any retail transaction that 

does not include the element of public 

oversight is inconsistent with the AWA. 

Several commenters stated that 

persons operating foster homes for 

abused or rescued animals should be 

exempted from having buyers/adopters 

physically enter their premises. They 

stated that requiring such entrance 

would likely dissuade both foster 

persons and potential adopters from 

accepting dogs and cats and would 

ultimately adversely impact animal 

welfare. 

Persons who engage solely in face-toface retail transactions are retail pet 

stores, regardless of whether these 

transactions occur at a residence or at 

some other location; as we noted above, 

most animal rescues engage solely in 

such types of retail transactions. Persons 

who foster pet animals in their homes 

on behalf of these rescues may conduct 

these face-to-face transactions at an 

alternative location and therefore would 

not be required to allow adopters to 

enter their premises. 

Several commenters stated that many 

of the reasons that render it difficult for 

a buyer to physically enter a seller’s 

place of business or residence also 

apply to completing face-to-face 

transactions (e.g., age, health, or 

physical capacities of the buyer, 

distance between the seller and buyer, 

geographical isolation of seller). 

The commenters assumed that the 

buyer of an animal sold at retail is the 

ultimate owner of the animal. However, 

as noted above, we consider the buyer 

of an animal sold at retail to be the 

person who takes custody of that animal 

after purchase; this might not be the 

ultimate owner. For purposes of the 

definition of retail pet store, it is this 

person, not necessarily the ultimate 

owner, who must be physically present 

to observe animals available for sale. 

However, a carrier or intermediate 

handler cannot be designated as the 

buyer. 

One commenter objected to face-toface transactions off-site on the grounds 

that they would put animal rescues and 

shelters at a competitive advantage over 

commercial retailers, since the former 

would be able to conduct face-to-face 

transactions of animals through 

networks of transport volunteers rather 

than by any employee of the rescue 

group or shelter actually meeting the 

buyer, while commercial retailers would 

be restricted to having only their 

employees conduct the sale. 

As is the case with commercial pet 

retailers, representatives of rescue 

groups also must be physically present 

at a place of business so that potential 

buyers/adoptees can personally observe 

their animals before purchasing and/or 

taking custody of them. 

A commenter noted that substandard 

Internet sellers could shift their model 

of business to selling animals face-toface at a location off their premises to 

avoid licensing, as the proposed rule 

will not impact such activities. 

We carefully considered this 

comment when we decided to allow the 

seller, buyer, and animal available for 

sale be physically present at the same 

place, but not necessarily the seller’s 

premises. This does not create an 

incentive for and a means of avoiding 

licensing for the types of dealers the 

AWA encompasses. 

Internet sellers who shift their model 

of business in such a manner would 

have to provide buyers with the 

opportunity to personally observe 

animals for sale prior to purchasing 

and/or taking custody of them, and thus 

will engage in a retail model that is 

consistent with the AWA. Our analysis 


pmangrum on DSK3VPTVN1PROD with RULES
57236 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

of the industry is that dealers who 

currently use an Internet sales business 

model would not find it economically 

viable to shift their business model in 

such a manner and would instead opt 

for licensing and inspection by USDA. 

As noted in our economic analysis, we 

believe that between 2,600 and 4,640 

dog breeders who currently claim retail 

pet store status will no longer be able to 

do so under this rule. However, USDA 

will monitor the rule’s implementation 

and consider proposing new rules 

should we determine that the AWA’s 

intent is not being served. 

Another commenter suggested that, if 

sellers who have face-to-face 

transactions at shows, flea markets, and 

auctions are exempt from licensing, 

then the shows, flea markets, and 

auctions themselves should have to be 

licensed. (The commenter stated that 

events that solely serve non-profits 

should not have to be licensed.) 

If a seller is selling regulated animals 

to buyers at a show or event solely in 

retail, face-to-face transactions, that 

seller meets the definition of a retail pet 

store and is exempt from licensing 

regardless of the physical venue in 

which the animals are offered for sale. 

Auctions and other events in which 

regulated animals are sold at wholesale 

must be licensed. 

One commenter stated that both 

APHIS and other commenters may have 

understated the difficulty of meeting in 

public to purchase dogs or cats face-toface. The commenter pointed to several 

State and local regulations that forbid or 

restrict sales or commercial transactions 

in public areas. The commenter 

concluded that, because of these 

difficulties, APHIS should revise the 

definition of retail pet store to allow 

some sight unseen sales to take place. 

We are making no changes in 

response to this comment. If local or 

State ordinances prohibit the sale of 

dogs or other pet animals in public 

areas, roadsides, or other locations, 

retailers of pet animals residing in the 

States or locales affected would retain 

the option of conducting business in 

any other location that is not prohibited 

by law. 

One commenter asked what sort of 

documentation APHIS would ask from 

sellers that a face-to-face transaction had 

occurred between them and the buyer of 

a pet. The commenter stated that this 

would almost certainly require 

recordkeeping if the buyer and seller 

offer differing accounts of the 

transaction. 

In instances where there is some 

question about the method of sale, 

APHIS will conduct an investigation 

and determine whether a sight unseen 

sale has occurred. 

Retail Pet Store: ‘‘In order to 

personally observe the animals . . .’’ 

Several commenters stated that 

APHIS provided no evidence that 

having individuals personally observe 

pet animals prior to purchase will result 

in more humane treatment and healthier 

pets. A number of commenters stated 

that, while personally observing an 

animal prior to purchase and/or taking 

custody will allow a buyer to visually 

inspect the animal for signs of neglect 

or symptoms of certain diseases, a 

simple visual inspection will not reveal 

to the buyer whether the animal has 

genetic conditions or other maladies; 

several commenters pointed out that a 

number of genetic conditions of dogs 

and cats have a significant latency 

period. Another commenter pointed out 

that personal testimonials from animal 

welfare organizations received during 

the comment period have provided 

evidence that animals sold at retail often 

have genetic conditions that can only 

result from inbreeding or overbreeding. 

Our focus in this rule is to ensure that 

our definition of retail pet store is 

consistent with the AWA. It is our 

contention that the AWA exempted 

retail pet stores from Federal licensing 

and inspection requirements because, at 

such establishments, buyers are 

physically present in order to personally 

observe the animal available for sale 

prior to purchasing and/or taking 

custody of that animal, thus monitoring 

them for humane care and treatment. 

As an alternative to requiring buyers 

to personally observe the animals for 

sale, face-to-face, several commenters 

stated that all retail breeders should 

have to be licensed pursuant to the 

AWA regulations. On the other hand, a 

number of commenters pointed out that 

licensing of all such breeders would 

expand the scope of regulated entities 

far beyond APHIS’ capacity to enforce 

the AWA regulations. 

We are making no change in response 

to these comments. The AWA exempts 

certain breeders from licensing. 

One commenter asserted that the 

blind are incapable of personal 

observation of animals. 

As long as the buyer is physically 

present with the animals prior to 

purchasing them and/or taking custody 

of them after purchase, it is considered 

an acceptable transaction for the 

purposes of maintaining the status of a 

retail pet store. 

Retail Pet Store: ‘‘Where only the 

following animals are sold or offered for 

sale . . .’’ 

One commenter stated that this 

phrase is ambiguous because there is no 

distinguishing factor defining the 

difference between which animals are 

sold and which are offered for sale. 

Animals offered for sale are the 

property of the seller, while animals 

that are sold are the property of the 

buyer. 

Retail Pet Store: ‘‘cats . . .’’ 

Several commenters noted that most 

pet cats come from sources other than 

small-scale cat breeders and that 

regulating such breeders is not 

necessary. A cat club representative 

cited a 2010 survey by the American Pet 

Products Association revealing that 

fewer than 1 percent of cats are obtained 

through Internet/online contact and 

only 2 percent of owned cats are 

obtained from breeders of pedigreed 

cats. The commenter stated that there is 

no need for Federal regulation of small 

or moderate scale home-based breeders 

of cats who have more than four 

breeding females, regardless of whether 

or not pet buyers come to their places 

of business. 

Given the presence of commercial cat 

breeders selling and shipping cats sight 

unseen, we consider some degree of 

Federal regulation to be necessary to 

ensure adequate oversight. 

Retail Pet Store: ‘‘. . . rabbits, guinea 

pigs . . .’’ 

Several commenters asked APHIS to 

clarify for those who own rabbits and 

guinea pigs (cavies) the conditions 

under which they are required to obtain 

a USDA license. 

Only a very small number of persons 

selling rabbits and guinea pigs will be 

affected by this rule. Such persons may 

be required to obtain a license if the 

following applies to their situation: (1) 

They sell animals sight unseen; (2) They 

sell the animals as pets and not for 

purposes of food or fiber (including fur) 

or agricultural purposes; and (3) They 

do not qualify for the $500 gross income 

limit from licensing. 

Several commenters noted that the 

regulations were vague on when rabbits 

are to be considered livestock or pets for 

regulatory purposes. 

If a person sells rabbits only for the 

purposes of food or fiber (including fur), 

those animals are considered to be farm 

animals and the person is exempt from 

licensing. 

Some commenters were concerned 

that the rule would require licensing of 

National and State Future Farmers of 

America (FFA) organizations and 4–H 

participants who sell their rabbits and 

limit the ability of youth to breed and 

show rabbits at county fairs and other 

exhibitions. 

FFA and 4–H participants who sell 

their rabbits for the purposes of food or 

fiber (including fur) or in face-to-face 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57237 

transactions at county fairs, rabbit 

shows, and other agricultural 

exhibitions are exempt from licensing 

regardless of the number sold. 

One commenter concerned about the 

sale of rabbits asked whether this 

proposal has any provisions that would 

stop some rabbit rescue organizations 

from buying rabbits from commercial 

sources and reselling them as ‘‘rescues’’ 

for a substantial profit. 

APHIS investigates all credible 

reports we receive of unlicensed 

activities involving sales of covered 

pets. 

A few commenters stated that we 

should entirely exempt guinea pig 

(cavy) breeders from licensing. 

Guinea pigs (cavies) are under the 

authority of the AWA, and APHIS is 

tasked with ensuring that all guinea pigs 

sold as pets are monitored for their 

humane care and treatment. 

Retail Pet Store: ‘‘. . . rats . . .’’ 

Some commenters asked APHIS to 

clarify for those who own rats the 

conditions under which they would 

have to obtain a USDA license. 

Under the regulations, we currently 

cover rats other than those of the genus 

Rattus bred for use in research. 

Therefore, persons retailing covered rats 

would need to obtain a license if they 

are not otherwise exempt. 

Retail Pet Store: ‘‘. . . gophers . . .’’ 

One commenter stated that gophers 

should be removed from the list of pets 

that can be sold without licensing in the 

definition of retail pet store. The 

commenter noted that while the other 

animals listed in that definition have 

historically been sold as pets, gophers 

have not and should more accurately be 

classified as ‘‘wild animals.’’ 

We are making no changes in 

response to this comment. Our research 

shows that gophers have been bought 

and sold as pets in the United States for 

at least a decade. 

Retail Pet Store: ‘‘. . . domestic farm 

animals . . .’’ 

Some commenters were uncertain 

about how the proposed rule would 

affect the ownership, breeding, and sale 

of farm animals. 

One commenter stated that the 

regulations are unclear with respect to 

livestock which may either be reared for 

utility purposes or kept as pets. The 

commenter noted that transfer of 

ownership of equids, bovids, caprids, 

lagomorphs, and domestic fowl is 

regularly conducted sight unseen both 

for utility purposes and as pets, and that 

sellers are sometimes not aware of the 

buyer’s intended use of the animals. The 

commenter asked that APHIS add 

clarifying language to the regulations 

that allows the free exchange of 

domestic livestock and clarifies that 

livestock are, in most instances, not 

pets. 

Farm animals intended for use as 

food, fiber, or other purposes specified 

under the definition of farm animal in 

§ 1.1 are exempt from regulation. Farm 

animals intended to be used as pets, for 

biomedical research, or other 

nonagricultural research are regulated 

under the AWA. Persons exhibiting 

farm animals at agricultural shows, 

fairs, and exhibits are exempt from 

licensing. However, persons exhibiting 

farm animals for nonagricultural 

purposes (such as petting zoos) are 

required to be licensed. 

A national livestock organization 

asked that we include language allowing 

face-to-face transactions of farm 

animals. 

As noted above, farm animals 

intended for use as food, fiber, or other 

purposes specified under the definition 

of farm animal in § 1.1 are exempt from 

regulation, regardless of whether those 

animals are sold face-to-face or sight 

unseen. Farm animals sold specifically 

as pets in face-to-face transactions are 

also exempt from licensing. On the 

other hand, farm animals used for 

biomedical or other nonagricultural 

research, or for nonagricultural 

exhibition, are regulated under the 

AWA and require licensing. 

One commenter suggested that we 

specifically exempt horses not used for 

research purposes from the retail pet 

store definition. 

In § 1.1, the term animal excludes 

horses not used for research purposes, 

which specifically exempts them from 

regulation. 

One commenter expressed concern 

that if a breeder maintains both farm 

animals and regulated animals on his 

residence, and the farm animals are 

deemed responsible for the breeder 

failing to meet the regulatory standards 

for the regulated animals, the breeder 

could be penalized and APHIS could 

remove the farm animals from the 

premises. 

Farm animals intended for use as 

food, fiber, or other purposes specified 

under the definition of farm animal in 

§ 1.1 are exempt from regulation, and 

therefore cannot be removed from a 

premises due to failure to meet the 

AWA regulations. 

Another commenter asked if any 

livestock sold to a buyer who does not 

have a ‘‘farm plan’’ on file with USDA 

would be considered as pets. 

The commenter is referring to a type 

of business plan required for certain 

Farm Service Agency loans. As noted 

above, animals sold and intended for 

use as food, fiber, or other purposes 

under the definition of farm animal in 

§ 1.1 are exempt from regulation 

regardless of whether the buyer has 

such a plan on file. 

Retail Pet Store: ‘‘. . . birds . . .’’ 

A few commenters requested that 

APHIS create an exemption in the 

regulations for raptors. One commenter 

requested that we include specific 

exemptions from licensing and all other 

regulations promulgated under the 

AWA for falconers, raptor propagators, 

those that conduct education of the 

public regarding raptors, and raptor 

permittees. The commenter stated that 

these persons are already subject to 

other stringent Federal regulations 

designed to ensure the welfare of these 

raptors, including licensing, facility 

inspections, reporting requirements, and 

permit fees. Another commenter 

asserted that raptors are not pets, and 

thus do not fall under the scope of the 

AWA; hence their owners do not need 

to be licensed. 

Another commenter stated that we 

should exempt parrot breeders from 

licensing on the grounds that subjecting 

them to licensing will promote 

smuggling of parrots from other 

countries. Similarly, a commenter 

expressed concern that waterfowl could 

be affected by the proposed rule and 

requested that we include in our 

regulations an exemption for birds 

already regulated under the Migratory 

Bird Treaty Act of 1918. 

Finally, one commenter noted that 

there is no clear definition of ‘‘bird(s)’’ 

in part 1. Because of this, the 

commenter wondered about the extent 

to which the regulations in parts 2 and 

3 pertain to birds. 

On June 4, 2004, we published a final 

rule in the Federal Register (69 FR 

31513–31514, Docket No. 98–106–3) 

that amended the definition of animal 

in the AWA regulations to include 

birds, other than those bred for use in 

research. However, APHIS has not 

established standards specific to birds. 

Retail Pet Store: ‘‘. . . coldblooded 

species’’ 

A number of reptile breeders stated 

that the industry is highly selfregulated, and that sight unseen sales of 

reptiles tend to be of high-end, 

extremely valuable animals where 

animal welfare is paramount for the 

sake of the sale. The commenter 

suggested that sellers of cold-blooded 

animals should be exempt from 

licensing, whether their sales are faceto-face or sight unseen. Another 

commenter asked how APHIS could 

require licensing of individuals who sell 

reptiles sight unseen, when the reptiles 

do not fall under the definition of 

animal. 


pmangrum on DSK3VPTVN1PROD with RULES
57238 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

As the commenter noted, coldblooded species do not fall under the 

definition of animal in § 1.1 and are 

therefore not regulated. 

Retail Pet Store: ‘‘A retail pet store 

also includes any person who meets the 

criteria in § 2.1(a)(3)(iii) of this 

subchapter.’’ 

A number of commenters raised 

questions regarding the reference to 

§ 2.1(a)(3)(iii) that we proposed adding 

to the definition of retail pet store. Many 

of these commenters were unsure why 

persons meeting these criteria were 

considered retail pet stores. A few of 

these commenters asked whether being 

considered a retail pet store because of 

these criteria allows a person to claim 

the exemption in § 2.1(a)(3)(i). One 

commenter, who met the criteria in 

§ 2.1(a)(3)(iii), asked why he would 

need two separate exemptions from 

licensing. 

Several commenters surmised that we 

included this criterion within the scope 

of the proposed definition of retail pet 

store because we proposed to remove 

the exemption in § 2.1(a)(3)(vii); many 

of these commenters referred to 

§ 2.1(a)(3)(vii) as the ‘‘hobby breeder’’ 

exemption, and suggested that our 

intent was to provide some hobby 

breeders an exemption from licensing. 

However, many of these commenters 

pointed out that the criteria in 

§ 2.1(a)(3)(iii) are significantly more 

restrictive than those in § 2.1(a)(3)(vii). 

Although a number of these commenters 

agreed with APHIS that retaining the 

exemption unchanged in § 2.1(a)(3)(vii) 

would continue to allow commercial 

Internet retailers of dogs and cats to 

remain exempt from licensing, the 

commenters stated that we had failed to 

provide a rationale for removing the 

exemption from licensing in 

§ 2.1(a)(3)(vii) for certain dog and cat 

fanciers. 

A number of self-described dog and 

cat fanciers stated that they did not meet 

any of the criteria in our proposed 

definition of retail pet store, but offered 

various reasons why they should be 

exempt from licensing. These reasons 

included: Because their animals are 

maintained in private residences; 

because dog and cat fanciers provide 

adequate care and treatment for their 

animals; and because dog and cat 

fanciers are ‘‘known commodities’’ 

among their clientele and that failing to 

provide adequate care for animals they 

offer for sale would ruin their 

reputations. Several of these 

commenters suggested that, in the final 

rule, we should specify that all dog and 

cat fanciers, rather than all individuals 

who meet the criteria in § 2.1(a)(3)(iii), 

are exempt from licensing; a number of 

these commenters suggested that we 

keep the exemption in § 2.1(a)(3)(vii) in 

the regulations, but specify that it 

pertains solely to dog and cat fanciers. 

The commenters who surmised that 

we proposed to include persons meeting 

the criteria of § 2.1(a)(3)(iii) in the 

definition of retail pet store because we 

proposed to remove § 2.1(a)(3)(vii) from 

the regulations are correct. The AWA 

exempts retail pet stores from licensing 

pursuant to the Act; this is the only 

exemption from licensing that is 

specified for retailers within the AWA. 

The exemptions from licensing that had 

existed in § 2.1(a)(3)(i) and 

§ 2.1(a)(3)(vii) were in the AWA 

regulations because we had considered 

individuals who met the criteria in 

those paragraphs to be retail pet stores. 

In the proposed rule, we proposed to 

revise the definition of retail pet store to 

make it more restrictive than it had 

previously been; this is because, as we 

noted above, the existing definition had 

begun to be interpreted in a manner that 

was inconsistent with the AWA. 

Our proposed revisions to the 

definition of retail pet store conflicted 

with the criteria in § 2.1(a)(3)(vii). 

However, as we mentioned above, that 

paragraph of the AWA regulations only 

could exist if we consider all persons 

who meet the criteria in the paragraph 

to be retail pet stores. Thus, we 

proposed to remove § 2.1(a)(3)(vii) from 

the regulations, since it would have 

otherwise provided an exemption from 

licensing for people who did not meet 

our proposed revision to the definition 

of retail pet store. 

However, we recognized that if we 

were to remove § 2.1(a)(3)(vii) from the 

regulations, we would expose to 

licensing a subcategory of individuals, 

those with four or fewer breeding female 

dogs, cats, and/or small exotic or wild 

mammals who sell at least some of the 

offspring of these animals sight unseen, 

that we consider to present a low risk 

of noncompliance with the AWA. It has 

been our experience that such 

individuals maintain few enough 

breeding females on their premises to 

offer adequate care and treatment to 

each animal. To continue to exempt 

these individuals from licensing, we 

included the ‘‘breeding females’’ 

exemption in § 2.1(a)(3)(iii) within the 

scope of the definition of retail pet store. 

During preparation of this final rule, 

we then realized that § 2.1(a)(3)(iii), as 

written, applied both to retailers and to 

wholesalers with regard to breeding 

females. If we were to finalize the 

proposed definition of retail pet store to 

include persons who meet the criteria in 

§ 2.1(a)(3)(iii), this could mistakenly 

allow wholesalers to consider 

themselves to be retail pet stores, 

although they do not engage in retail 

sales. For these reasons, we are not 

removing § 2.1(a)(3)(vii) from the 

regulations in this final rule. Instead, we 

are revising that exemption so that it 

duplicates the criteria contained in 

§ 2.1(a)(3)(iii) but specifies that those 

criteria moved into § 2.1(a)(3)(vii) 

pertain only to retailers. Conversely, we 

are amending the exemption in 

§ 2.1(a)(3)(iii) to specify that it pertains 

only to wholesalers. Because of these 

amendments, we are in turn amending 

our proposed definition of retail pet 

store so that it includes individuals who 

meet the criteria in § 2.1(a)(3)(vii) under 

the definition of retail pet store. We are 

also making a nonsubstantive change to 

the definition of retail pet store based on 

our inclusion under that definition of 

persons who meet the criteria in 

§ 2.1(a)(3)(vii). (These revisions are set 

forth in the regulatory text at the end of 

this rule.) 

Finally, it is not possible under the 

AWA to exempt a purebred dog or cat 

fancier from licensing solely because he 

or she is a purebred dog or cat fancier. 

However, dog and cat fanciers who meet 

the criteria in § 2.1(a)(3)(vii) will be 

exempt from licensing because we 

consider them to be retail pet stores for 

the purposes of the AWA regulations. 

$500 Gross Income Limit 

We also proposed to remove the 

limitation concerning the source of 

gross income in § 2.1(a)(3)(ii) of the 

regulations, which exempts from 

licensing ‘‘any person who sells or 

negotiates the sale of or purchase of any 

animal except wild or exotic animals, 

dogs, or cats, and who derives no more 

than $500 gross income from the sale of 

any animal except wild or exotic 

animals, dogs, or cats to a research 

facility, an exhibitor, a dealer, or a pet 

store during any calendar year and is 

not otherwise required to obtain a 

license.’’ We proposed removing the 

limitation on the source of sales so that 

such persons could also sell their 

animals at retail if they wish and remain 

exempt under the $500 limit. 

Several commenters stated that the 

$500 gross income limit should be much 

higher because of inflation and the 

rising costs of animal breeding. 

Conversely, some commenters stated 

that the $500 limit for the exemption is 

too high because no animal breeder 

selling his or her animals should be 

exempt from licensing. 

We are making no changes in 

response to these comments. The $500 

gross income limit was mandated by 

Congress within the AWA. However, it 

is important to note that under the 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57239 

proposed rule, there are a number of 

ways that persons who sell animals 

covered by this exemption (including 

rabbits, guinea pigs (cavies), and rats) 

can be exempted from licensing, either 

by not meeting the definition of dealer 

in § 1.1 or through one or more of the 

licensing exemptions in § 2.1 (see the 

section below titled ‘‘Retail Pet Store: 

‘‘. . . rabbits, guinea pigs . . .’’). 

A number of dog and cat breeders 

stated that the $500 gross income limit 

was too low for such animals. 

The $500 gross income limit 

exemption does not apply to dogs or 

cats. 

Breeding Females and Offspring 

Section 2.1(a)(3) of the AWA 

regulations exempts certain persons 

from licensing requirements. Prior to 

this final rule, paragraph (a)(3)(iii) had 

exempted ‘‘any person who maintains a 

total of three (3) or fewer breeding 

female dogs, cats, and/or small exotic or 

wild mammals, such as hedgehogs, 

degus, spiny mice, prairie dogs, flying 

squirrels, and jerboas, and who sells 

only the offspring of these dogs, cats, or 

small exotic or wild mammals, which 

were born and raised on his or her 

premises, for pets or exhibition, and is 

not otherwise required to obtain a 

license.’’ The paragraph further 

provided that the exemption did not 

extend to anyone in a household who 

collectively maintains a total of more 

than three breeding female dogs, cats, 

and/or small exotic or wild mammals, 

regardless of ownership, nor to any 

person maintaining breeding female 

dogs, cats, and/or small exotic or wild 

mammals, on premises on which more 

than three breeding female dogs, cats, 

and/or small exotic or wild mammals 

are maintained, nor to any person acting 

in concert with others where they 

collectively maintain a total of more 

than three breeding females, cats, and/ 

or small exotic or wild mammals, 

regardless of ownership. In the 

proposed rule, we increased the number 

of breeding females that may be 

maintained to four. 

(As noted earlier, we have revised our 

proposed definition of retail pet store so 

that it no longer includes individuals 

who meet the criteria in § 2.1(a)(3)(iii). 

However, we are revising and retaining 

the direct retail exemption in 

§ 2.1(a)(3)(vii), linking it to the retail pet 

store definition, and adding to the direct 

retail exemption the criteria in 

§ 2.1(a)(3)(iii). In other words, the 

requirement regarding the number of 

breeding females remains part of the 

retail pet store definition.) 

In the proposed rule, we solicited 

comments on our proposed change to 

the exemption limit. We also invited 

comments regarding the variability of 

litter size by breed and the impact that 

variability may have on the setting of 

size thresholds, as well as comments on 

whether to regulate breeders by number 

of offspring sold or by number of 

breeding females. 

A few commenters stated that we 

should substantially revise the 

exemption. One commenter stated that 

the exemption should cover only those 

breeders who breed their animals no 

more than once annually; other 

commenters suggested breeding 

intervals of 12, 18, and 24 months. 

Another commenter stated that the 

exemption should specify the 

conditions under which breeding 

females must be raised on their 

premises in order to qualify for an 

exemption from licensing, rather than 

set a limit on the number of breeding 

females on the premises. 

As we discuss at greater length below, 

this exemption is based upon our 

determination that individuals who 

maintain four or fewer breeding females 

on their premises and sell only the 

offspring of these females are likely to 

provide adequate care for these animals. 

Breeding Females and Offspring: ‘‘Any 

person who maintains a total of four or 

fewer breeding female dogs, cats, and/or 

small exotic or wild mammals. . . .’’ 

A number of commenters asked what 

constitutes maintaining a breeding 

female on a premises. Several 

commenters asked if breeding females 

that stay temporarily at a residence are 

considered to be maintained at the 

residence. A few of the commenters 

stated that breeders should only be 

considered to maintain a breeding 

female at their residence when the 

breeding female’s stay at the residence 

does not have a fixed end date. All of 

these commenters asked APHIS to 

define or otherwise explain ‘‘maintain’’ 

in the final rule. 

A breeding female is considered to be 

maintained at their premises if it resides 

at that premises, even if temporarily. 

That being said, as we discuss below, 

the threshold in this exemption applies 

only to dogs, cats, and/or small exotic 

or wild mammals that an APHIS 

inspector has determined to be breeding 

females, and only applies to such 

females if their offspring are sold as 

pets. 

Breeding Females and Offspring: 

‘‘Any person who maintains a total of 

four or fewer breeding female dogs, cats, 

and/or small exotic or wild 

mammals. . . .’’ 

A number of commenters asked 

whether, by ‘‘total,’’ we meant four or 

fewer breeding female dogs, in total, 

four or fewer breeding female cats, in 

total, and four or fewer breeding female 

small exotic or wild mammals, in total, 

or the total number of breeding female 

dogs, cats, and small exotic or wild 

mammals on the premises that is four or 

fewer. In the latter case, the commenters 

stated that this exemption was too 

stringent for many 4–H, FFA, and rural 

families, particularly given our decision 

to remove § 2.1(a)(3)(vii), which 

exempted any person who breeds and 

raises domestic pet animals for direct 

retail sales to another person for the 

buyer’s own use and who buys no 

animals for resale. The commenters 

stated that APHIS should engage in 

dialog with FFA and 4–H families and 

set a more reasonable number based on 

that dialog. 

Another commenter asked whether 

we meant four breeding female dogs of 

each breed on the premises, or four 

breeding female dogs, total, regardless of 

breed. 

A number of commenters suggested 

that, if the term ‘‘total’’ is meant in a 

partitive sense (i.e., four or fewer 

breeding female dogs, four or fewer 

breeding female cats, four or fewer 

breeding female small exotic or wild 

mammals), the sentence should be 

amended to make this clear. 

The exemption refers to the aggregate 

number of female dogs, cats, and/or 

small exotic or wild mammals on the 

premises who are bred and whose 

offspring are sold as pets. As we stated 

in the proposed rule, we consider 

someone who maintains four or fewer 

such females to be a low-risk facility. 

What we meant by this was that, based 

on our experience, an individual who 

maintains four or fewer such females on 

his or her premises has demonstrated 

that they are capable of providing 

adequate care and treatment for the 

animals on their premises, so we do not 

consider Federal oversight to be 

necessary. 

Furthermore, interpreting the 

exemption in such a manner is not 

likely to adversely impact rural families 

or anyone participating in FFA or 4–H 

activities. Most FFA and 4–H exhibitors 

sell their animals for agricultural 

purposes and/or in face-to-face 

transactions and thus are not dealers. 

They therefore do not need to claim an 

exemption from licensing. 

A number of commenters stated that 

litter sizes for hobby breeds and small 

breeds are considerably smaller than 

those for larger breeds, that four 

breeding females are therefore too few to 

maintain a viable breeding program, and 

that setting the exemption at four would 

accordingly encourage overbreeding of 

the animals. They also stated that a lack 


pmangrum on DSK3VPTVN1PROD with RULES
57240 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

7The documents cited were: (1) Parvene 

Farhoody and M. Christine Zink. Behavioral and 

Physical Effects of Spaying and Neutering Domestic 

Dogs (Canis familiaris). (2) Laura J. Sanborn, M.S. 

Health Risks and Benefits Associated with Spay/

Neuter in Dogs. 

of genetic diversity from having four or 

fewer breeding females would result in 

offspring that would be less desirable to 

buyers seeking strong breed 

characteristics. Others noted that smallscale breeders typically do not breed 

their dogs every estrus cycle. As a 

female will produce offspring with the 

same strengths and weaknesses each 

time, such breeders will often wait until 

her female pups mature and then breed 

the best of them in order to further 

improve the breed line. For these 

reasons, several breeders stated that 6 

breeding females is the minimum 

necessary to have a viable breeding 

program for their breed; other breeders 

stated that it should be 10, 12, or 20 for 

their breed. One commenter stated that 

USDA has historically acknowledged a 

‘‘tipping point’’ at 60 breeding females 

after which animal welfare violations 

become disproportionately common. 

The commenter asked why 60 had not 

been selected as the cut-off. 

On the other hand, a few commenters 

opposed our proposal to increase the 

maximum number of breeding females 

allowed under the licensing exemptions 

in § 2.1(a)(3)(iii) from three to four. Most 

of those commenters stated that this 

change would allow breeders to produce 

greater numbers of pets that could 

potentially be abandoned or sent to 

shelters and euthanized. One 

commenter opposed the changes 

because the current number was put in 

place years ago for a reason, and that 

reason, the commenter stated, has not 

changed. 

Rather than simply raising the 

number of breeding females allowed 

under the exemption to one of the 

numbers suggested by commenters, a 

number of commenters suggested 

alternate amendments that, they stated, 

would better serve the needs of the 

regulated community. One commenter 

supporting this approach stated that 

raising the number from three to four or 

fewer breeding females for pet fanciers 

is irrelevant, because numbers change 

within fancier practices in ways that are 

different from a wholesale operation. 

Similarly, a commenter stated that one 

set of regulations for all breeds of cats 

fails to consider the differences in 

growth rates and breeding ages among 

breeds. These commenters stated that 

we should establish breed-specific 

thresholds, or, at least, breed categories 

with various thresholds (e.g., ‘‘Breeders 

of a Category A dog may have no more 

than four breeding females; Category B, 

six breeding females,’’ and so on). 

Another commenter stated that we 

should set the exemption from licensing 

at 4, but should create subclasses of 

licensees, set at thresholds based on the 

total number of breeding females, and 

should specify the standards in part 3 

that apply to each class, e.g., ‘‘A class 

A–1 breeder has between 5 and 10 

breeding females, and must meet the 

requirements of §§ 3.7–11.’’ 

We are making no changes based on 

these comments. The number of 

offspring that breeding females are 

likely to produce annually did not factor 

into our determination to propose 

raising the threshold in the exemption 

to four breeding females. Rather, this 

decision was based on our experience 

that an individual with four or fewer 

breeding females can generally be 

considered a low-risk facility with 

regard to animal welfare, so we do not 

consider Federal oversight to be 

necessary. 

In addition, we recognize that 

depending on the species and the breeds 

within the species, animals can mature 

at different rates. In determining the 

number of eligible breeding females 

maintained by a breeder, an APHIS 

inspector would consider each animal’s 

age, health, and fitness for breeding. We 

consider it impractical and unnecessary 

to establish specific growth rate and 

breeding age standards for every breed 

and every species of pet animal. 

Breeding Females and Offspring: 

‘‘Any person who maintains a total of 

four or fewer breeding female dogs, cats, 

and/or small exotic or wild mammals. 

. . .’’ 

A considerable number of 

commenters expressed uncertainty 

about what APHIS considers to be a 

breeding female and asked us to define 

the term in the final rule. Many of these 

commenters stated that ‘‘breeding’’ 

should not be considered equivalent to 

‘‘sexually mature and sexually intact.’’ 

Several commenters cited health 

concerns with having their dogs breed. 

One of the commenters pointed out that 

her female dogs become sexually mature 

at 6 months of age, but that breeding 

them at that age would pose a serious 

health risk to the female dog and had 

little possibility of resulting in a live 

litter. Other commenters raised a similar 

point regarding older female dogs. A 

number of these commenters stated that 

‘‘retired’’ female dogs should not count 

towards the total; many of these 

commenters cited peer-reviewed 

articles 7 stating that keeping a retired 

female sexually intact is conducive to 

animal health and welfare. A number of 

commenters stated that a female dog 

should be considered a breeding female 

only when it is an age at which it is 

generally agreed her breed is capable of 

producing a live litter. 

A few commenters stated that most 

breeders do not breed their female dogs 

until they are old enough to have a 

viable litter and have passed all relevant 

health inspections, and stated that a 

female should not be considered a 

breeding female until both of these 

conditions have been fulfilled. 

Other commenters agreed that a 

female dog that is sexually mature and 

intact should not necessarily be 

considered a breeding female, but did so 

for different reasons. Breeders of female 

show dogs stated that many 

competitions require the animals to be 

sexually intact in order to be shown, but 

that few show breeders breed their 

animals during the time period that they 

are exhibiting them. Other commenters 

pointed out that a female dog may be 

retired for any number of reasons (age, 

number of litters produced to date, 

producing offspring with undesirable 

characteristics), but still reside on a 

residence. These commenters stated that 

a female dog should be considered a 

breeding female only when it is actually 

being bred. 

However, a number of commenters 

pointed out the limitations of such an 

interpretation of ‘‘breeding female’’: Just 

because a breeding female is not 

currently being bred does not mean that 

she will never be bred. The commenters 

also noted that this interpretation could 

result in enforceability issues for 

APHIS: A breeder could qualify for an 

exemption one year, need to be licensed 

the next, and again qualify for an 

exemption the third. Another 

commenter pointed out that breeders do 

have ‘‘accident’’ litters from time to 

time, so a breeder’s intent to not breed 

a female in a certain year may not 

actually mean that the female dog is not 

bred. 

While we recognize that breeders 

have several reasons for not breeding an 

intact female, for the purposes of 

enforcement, APHIS has to assume that 

a female that is capable of breeding may 

be bred. However, in determining 

whether an animal is capable of 

breeding, an APHIS inspector will take 

into consideration a variety of factors, 

including the animal’s age, health, and 

fitness for breeding. 

A few commenters pointed out that 

any definition of ‘‘breeding female’’ 

would likely exclude animals that 

should fall within its scope and include 

animals that should not. They stated 

that the determination that an animal is 

a breeding female should ultimately be 

at an inspector’s discretion. Other 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57241 

commenters agreed that the 

determination must be the inspector’s, 

but stated that APHIS should provide 

certain considerations that factor into 

this determination, at the risk of 

otherwise appearing arbitrary and 

capricious. One commenter stated that 

these considerations should include 

frequency of estrous cycles and the age 

at which the female could bear a litter. 

Two other commenters stated that tests, 

such as the OFA, Penn Hip, thyroid, and 

recognized breed-related tests, should 

factor into our determination regarding 

whether an animal has the capacity to 

breed. 

It is ultimately an APHIS inspector’s 

responsibility to decide whether an 

animal is a breeding female, and this 

decision must rely on a variety of 

factors. Inspectors currently rely on 

factors such as the animal’s age, health, 

and fitness for breeding in deciding 

whether an animal is a breeding female. 

Moreover, in determining the animal’s 

health status, inspectors may have 

recourse to recognized breed-related 

tests. 

However, inspectors do not rely on 

the frequency of estrous cycles, which 

are variable and influenced by many 

factors. 

One commenter stated that, since the 

decision that an animal is a breeding 

female is ultimately an inspector’s, this 

exemption presupposes that all breeding 

females will be inspected by APHIS, 

which the commenter stated cannot be 

done. 

APHIS does not intend to conduct 

inspections of all potentially regulated 

entities and their breeding females all at 

once. We discuss this matter in greater 

detail below. 

Another commenter asked how 

APHIS is able to determine that a female 

dog has been spayed based on visual 

inspection. 

APHIS inspectors rely on a variety of 

means to determine whether a female 

has been spayed. One means is visual 

inspection. Other options include 

reviewing veterinary records or other 

documentary evidence, such as sales 

receipts. 

Some commenters stated that certain 

types of animals should not be 

considered breeding females for 

purposes of determining the total 

number of breeding females on their 

premises. One commenter stated that 

purebred dogs and show dogs should 

not count towards the total number, 

since the medical care and husbandry 

provided to such animals exceed the 

standards set forth in the regulations. 

Similarly, other commenters stated that, 

if the breeder belongs to a registry or 

breeding organization for a particular 

breed, breeding females of that breed 

that reside on his or her premises 

should not be considered breeding 

females for purposes of this exemption, 

since the codes of ethics and guidance 

for those registries and organizations 

already provide adequate assurances of 

animal welfare. 

We are making no changes in 

response to these comments. Sexually 

mature and intact show dogs can always 

be used as breeding females at some 

point after they are no longer shown. 

Additionally, breed registries vary 

widely in how they oversee and inspect 

breeders within their organizations. 

Several commenters suggested that 

sexually intact working dogs should not 

count towards the total number of 

breeding females. 

If sellers of such dogs also sell dogs 

at retail for pets, any female dogs bred 

to produce puppies for sale would be 

counted as breeding females. 

A cat breeder stated that, because only 

2 percent of owned cats are obtained 

from pedigree breeders, breeding female 

cats should not count towards the 

number of total breeding females on the 

premises for purposes of the regulations. 

As we mentioned above, this 

exemption is intended for certain 

breeders who maintain few enough 

breeding females on their premises that 

we consider them capable of providing 

adequate care and oversight for all 

animals on their premises. We have 

determined that this threshold is four 

breeding female dogs, cats, and/or small 

exotic or wild mammals. We have no 

evidence suggesting that cats should not 

factor into the threshold, nor do we 

consider the percentage of cats obtained 

from pedigree breeders to be relevant to 

determining the threshold. 

One commenter stated that she 

intended to have several of her dogs 

spayed in order to qualify for the 

exemption, but would need some time 

in order to accomplish this. She asked 

how much time APHIS would afford 

breeders to spay their dogs following 

publication of a final rule before we 

began enforcing the ‘‘four breeding 

female’’ limit. 

The revisions to the exemption will 

be effective when this final rule 

becomes effective. 

A number of commenters stated that 

all breeders with sexually intact females 

on their premises should have to be 

licensed, and the exemption should 

therefore be removed from the 

regulations. 

We conclude from our experience 

with currently regulated entities that 

breeders who maintain four or fewer 

breeding females can generally be 

considered low-risk facilities with 

regard to animal welfare. 

Several commenters stated that 

purebred breeders and breeders of 

‘‘custom’’ mixed breeds (e.g., 

cockapoos) should be required to be 

licensed, regardless of the number of 

breeding females on their premises, 

stating that these breeders were most 

likely to overbreed their animals. 

Our data suggests that it is the total 

number of breeding female dogs 

maintained on the premises, rather than 

the breed of dogs maintained, that is the 

primary determinant in whether the 

premises is a low-risk facility. 

Several commenters suggested that we 

consider the number of puppies sold per 

year instead of counting the breeding 

females at a premises. Most of the 

commenters suggested that this number 

should be 50 puppies produced per 

year; a few commenters suggested 

adjusting this number up or down, 

depending on the breed. Two 

commenters suggested that the 

exemption be based on number of litters 

and puppies sold; one of the 

commenters suggested setting the 

exemption at 10 litters and 50 puppies, 

the other at 15 and 50. One commenter 

suggested, instead of the proposed 

amendments to exemptions in 

§ 2.1(a)(3)(iii) in the proposed rule, that 

we amend (a)(3)(iv) to read as follows: 

‘‘Any person who sells fewer than 50 

dogs and/or cats per year, which were 

born and raised on the premises of a coowner of the breeding female or at a 

facility owned by a licensed 

veterinarian in the jurisdiction either as 

pets or for research, teaching or testing 

purposes and is not otherwise required 

to obtain a license. This exemption does 

not extend to any person residing in a 

household that collectively sells 50 or 

more dogs and/or cats, regardless of 

ownership, nor to any person acting in 

concert with others, where they 

collectively sell 50 or more dogs and/or 

cats from a single property. The sale of 

any dog or cat not born and raised on 

the premises for research purposes 

requires a license.’’ The commenter 

stated that this would effectively return 

the number of regulated entities to that 

of the time period before the Internet. 

As we explained in the proposed rule, 

we have enforceability concerns 

regarding an exemption based on 

number of puppies sold: We cannot 

require individuals who are exempt 

from licensing to keep records regarding 

animal sales, but would need such 

recordkeeping in order to enforce the 

exemption. No commenters suggested 

that such recordkeeping was 

unnecessary for enforcement purposes, 

nor did commenters suggest alternate 


pmangrum on DSK3VPTVN1PROD with RULES
57242 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

means of obtaining the necessary 

information. 

Breeding Females and Offspring: 

‘‘And who sells only the offspring of 

these dogs, cats, or small exotic or wild 

mammals, which were born and raised 

on his or her premises. . . .’’ 

Several commenters stated that it is 

common for a breeder to receive a 

puppy as compensation for lending an 

animal out for stud services and then 

sell that puppy at a later date. The 

commenters pointed out that, in order to 

qualify for the exemption in 

§ 2.1(a)(3)(iii), these breeders could not 

resell such puppies, and suggested that, 

if breeders stopped engaging in this 

practice in order to qualify for the 

exemption, this would ultimately 

impact genetic diversity in several 

breeds. 

While such individuals cannot qualify 

for the exemption in § 2.1(a)(3)(iii), this 

does not necessarily mean that they 

need to stop engaging in this practice in 

order to be exempt from licensing. The 

stud services may constitute brokering 

or breeding purposes and we would 

need more information to determine the 

purpose for licensing purposes. They 

may be exempt from licensing under 

another exemption in the AWA 

regulations. 

Several commenters stated that 

breeders often sell a breeding female to 

individuals who are aspiring breeders or 

who wish to add new bloodlines to their 

breeding program; one commenter 

stated that the occasional addition of 

such bloodlines is necessary in order to 

preserve genetic diversity in his breed. 

Other commenters stated that they 

occasionally sold ‘‘retired’’ breeding 

females to friends or acquaintances as 

pets. A number of commenters 

suggested that we amend the paragraph 

so that both the breeding females and 

their offspring may be sold. 

We are not amending the paragraph in 

the manner suggested by the 

commenter. The paragraph pertains to a 

distinct category of breeders that APHIS 

has evaluated and determined to be low 

risk for noncompliance with the AWA. 

The amendments requested by the 

commenters would expand the 

paragraph’s scope to include breeders 

that APHIS has not evaluated. 

We note, however, that the 

commenters who stated that they sold 

breeding females as pets did not specify 

where the breeding females were born 

and raised. The exemption allowance on 

the number of breeding females only 

applies when dogs are sold that are born 

and raised on the seller’s premises. If 

the breeding females were not born and 

raised on the premises, the seller does 

not qualify for this exemption regardless 

of the number of breeding females they 

maintain, but may still be exempt from 

licensing as a retail pet store depending 

on the manner in which they sell the 

animals (i.e., face-to-face). Breeders who 

sell breeding females for purposes other 

than the six uses listed in the definition 

of dealer may also be exempt under this 

rule. 

Several commenters stated that the 

requirement that breeders can only sell 

the offspring of dogs, cats, and other 

small mammals born and raised on their 

premises for pets or exhibition is vague 

or unclear. One commenter, a dog 

breeding club, asked APHIS to provide 

a clear statement of the meaning of 

‘‘born and raised on his or her 

premises.’’ Several commenters were 

uncertain how to apply the requirement 

for puppies or other animals that were 

born at a veterinarian’s office, off 

premises, and then returned with their 

mother to the premises. 

‘‘Born and raised on his or her 

premises’’ means that a breeding female 

gives birth on the premises and that the 

offspring are raised on that premises. 

When enforcing this requirement, we 

consider the ownership of the animal 

and the ability to maintain control over 

the animal. This would include medical 

contingencies that may require a female 

animal to deliver its offspring at a 

veterinarian’s office. In such cases, 

APHIS may request additional 

information to determine where the 

animals are born and raised. 

Breeding Females and Offspring: 

‘‘This exemption does not apply . . . to 

any person acting in concert with others 

where they collectively maintain a total 

of more than three breeding female 

dogs, cats, and/or small exotic or wild 

mammals regardless of ownership. 

. . .’’ 

Several commenters stated that coownership is common in the hobby and 

show dog breeding community. Many 

small-scale residential breeders co-own 

animals with people who live in other 

locations. One commenter, a dog 

breeding club, asked APHIS to explain 

the meaning of ‘‘acting in concert with’’ 

and whether the term applies to coownership of breeding females. One 

commenter noted that when puppies are 

raised for show or breeding, the breeder 

will sometimes co-own a puppy with its 

new owner and mentor the owner on 

how to breed or show the dog. Another 

commenter noted that when a show dog 

is sold, breeding rights for the dog are 

often part of the sale, so that an animal 

that is owned by the buyer remains on 

the breeder’s property until it produces 

a litter. 

One commenter noted that to deprive 

retail breeders of a feasible exemption 

for co-ownership would not only 

significantly affect for-profit breeding 

operations, but would disrupt and 

change longstanding, useful practices 

among pet fanciers that actually ensure 

welfare through educating newcomers 

and sharing expertise in the long-term 

interest of better breeding. The 

commenter added that the proposed 

rule would leave fanciers and all retailsale breeders the options of selling only 

to on-premises buyers or limiting 

themselves to four breeding females. 

One commenter asked whether, if a 

breeder has multiple premises but has 

no more than four breeding females at 

any one location, he or she would be 

required to be licensed. Another 

commenter pointed out that, if this 

exemption applies to each premises 

rather than to each breeder, regardless of 

the number of premises on which the 

breeding females are maintained, this 

could create a significant loophole that 

would allow puppy mills and other 

mass-producers to retain an exemption 

from licensing by distributing their 

breeding females among multiple 

premises. Several of these commenters 

asked us to specify in the final rule that 

co-ownership does not constitute acting 

in concert with another person to 

maintain a breeding female. 

We acknowledge that co-ownership of 

breeding females is a standard practice 

among small-scale residential breeders. 

Provided that no more than four 

breeding females are maintained on his 

or her premises, these individuals 

would qualify for the exemption in 

§ 2.1(a)(3)(iii). 

Comments on Removing § 2.1(a)(3)(vii) 

As noted above, we proposed to 

remove § 2.1(a)(3)(vii), which exempted 

from licensing any person who breeds 

and raises domestic pet animals for 

direct retail sales to another person for 

the buyer’s own use and who buys no 

animals for resale and who sells no 

animals to a research facility, an 

exhibitor, a dealer, or a pet store (e.g., 

‘‘dog and cat fanciers’’), on the grounds 

that it was inconsistent with our 

proposed revision to the definition of 

retail pet store. 

One commenter stated that we should 

state in the final rule that removing the 

exemption in § 2.1(a)(3)(vii) will subject 

dog and cat fanciers to licensing and the 

possibility of inspections, but will not 

force them to comply with the standards 

in 9 CFR part 3. Several commenters 

suggested that we require dog and cat 

fanciers to follow the standards in part 

3 that pertain to grouping, exercise, 

feeding, watering, and cleaning, but that 

we exempt them from the facility 

standards of that part, which are 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57243 

impracticable for breeders who raise 

animals in their homes. Specifically, a 

number of commenters cited the 

standards in § 3.2 regarding impervious 

materials and § 3.6 regarding whelping 

areas as being cost-prohibitive for most 

residential breeders. Several of these 

commenters suggested that we amend 

part 3 in the final rule to establish 

alternate, performance-based standards 

for dog and cat fanciers and other smallscale residential breeders. 

We are making no changes in 

response to these comments. The 

comments were predicated on an 

assumption that it will be costprohibitive for most residential breeders 

who are regulated as a result of this rule 

to meet the standards in part 3; we do 

not consider that to be the case. We 

discuss this at greater length in the 

economic analysis that accompanies 

this final rule. 

One commenter suggested that we 

should delay the effective date for 

removing the exemption until we 

consult with residential breeders and 

explain what structural modifications 

they will need to make to their 

residences so that they comply with the 

regulations in part 3. 

We are not delaying the effective date. 

As we note in the economic analysis, 

many residential breeders will continue 

to be exempt from the regulations, and 

as noted by several commenters, many 

who are not exempt are already 

operating in a manner that is consistent 

with the AWA. Accordingly, they will 

likely need to make only minor 

structural changes to their facilities to 

be in compliance with AWA standards. 

One commenter suggested that we 

‘‘grandfather in’’ all existing residential 

breeders as retail pet stores, and require 

licensing only for new residential 

breeders. 

We are making no change in response 

to this comment. The commenter’s 

suggestion would privilege existing 

breeders over new breeders. 

A number of commenters stated that, 

if APHIS needed to require them to be 

regulated and licensed in order to 

ensure animal welfare, APHIS should 

take measures to ensure that the impact 

of such licensing has as minimal an 

effect on such breeders as possible. One 

commenter suggested that we limit the 

licensing fee for purebred dog and cat 

fanciers and other small-scale breeders 

to $10 yearly. 

We expect that many small-scale 

breeders will remain exempt from 

licensing and will therefore not need to 

pay a licensing fee. However, we note in 

the economic analysis prepared for this 

rule that the costs of licensing are likely 

to be lower than most breeders figure 

them to be. 

Finally, a commenter stated that the 

rollout of the final rule should be 

accompanied by a supporting document 

or educational campaign for small-scale 

residential dog and cat breeders in best 

practices for breeding and care. The 

commenter said that many breeders will 

want to comply with the regulations, 

but, because of unfamiliarity with the 

AWA, will need instruction. 

APHIS already provides such 

education as part of its prelicensing 

process and existing stakeholder 

outreach. 

Requests for Additional Exemptions 

A few commenters stated that we 

needed to add additional exemptions to 

paragraph (a)(3) of § 2.1. 

Many commenters stated that we 

should amend the regulations to specify 

that animal rescue groups should be 

exempt from licensing because such 

groups have business models that are 

vastly different from those of retail 

dealers. They pointed out that the goal 

of such groups is to preserve animal 

welfare rather than to breed animals for 

profit. A few commenters stated that we 

should make a distinction between nonprofit and for-profit rescue groups, and 

exempt the former from licensing. 

On the other hand, several 

commenters stated that rescue groups 

should not be exempt from licensing 

solely because of their mission. Some of 

these commenters pointed out that both 

profit and non-profit rescue groups 

often request substantial adoption fees 

to recoup the costs of maintaining the 

group. Several other commenters 

acknowledged the good intentions of 

rescue groups, but stated that many 

groups overreach and end up 

overcrowded with rescued animals. The 

commenters also pointed out that many 

rescues rely on volunteers to provide 

care for the animals and that reliance on 

volunteer efforts could result in gaps or 

significant disparities in the care 

provided. 

Some commenters suggested 

alternatives. One commenter suggested 

that we require rescue groups to be 

licensed, but that we waive licensing 

fees for such groups. Another 

commenter suggested exempting them 

from the facility standards of part 3. A 

third commenter suggested that we 

amend the regulations so that all ‘‘Class 

A’’ breeders have to enter into a trust 

fund agreement with APHIS at licensing 

and renewal, with the money in the 

agreement dedicated to licensing for 

non-profit rescue groups and other nonprofits. Another commenter suggested 

that we define non-profit organization 

in the final rule, include rescue groups 

within the definition, and exempt all 

non-profit organizations from licensing. 

As we noted earlier, private rescues 

and shelters tend to operate under a 

business model in which animals 

available for sale or adoption are 

physically present at a predetermined 

location where the public is encouraged 

to meet and inspect the animals; this 

business model is consistent with what 

we consider a retail pet store to be, and 

fits within the scope of our definition of 

a retail pet store. As a result, most 

private rescues and shelters have 

historically been exempted under the 

retail pet store exemption and will 

continue to be exempted as long as they 

meet the amended definition of retail 

pet store. 

However, private rescues or shelters 

that are operating in a manner that 

requires them to be licensed as dealers 

must be treated in a manner that is 

consistent with our regulation of all 

other licensed dealers. This includes 

paying licensing fees and adhering to 

the standards in part 3 of the AWA 

regulations. 

Oversight and Enforcement 

A number of commenters believed 

that we had greatly underestimated the 

number of newly regulated entities in 

our initial regulatory impact assessment 

and questioned whether we had 

sufficient personnel to enforce the 

provisions of the proposed rule. A 

number of commenters stated that, 

before conducting all the inspections 

necessary to enforce the proposed rule, 

APHIS would have to hire additional 

inspectors. One commenter stated that 

our ability to enforce the proposed rule 

is hampered by our restrictive definition 

of inspector in § 1.1, and that we should 

expand the definition to include State 

employees and third parties authorized 

by APHIS. Other commenters noted that 

APHIS had provided no indication of 

how it will fund expenditures for 

additional personnel. 

On the other hand, a commenter 

supporting the proposed rule 

commented that APHIS is capable of 

handling the enforcement responsibility 

of the proposed rule without hiring 

large numbers of additional personnel. 

The commenter acknowledged that the 

number of additional facilities that 

would be subject to licensing under this 

rule would be difficult to determine. 

They noted, however, that even if the 

new regulation doubled the number of 

operations subject to USDA regulation, 

the inspection burden would merely 

return to approximately the level that 

was handled by USDA in 2008. 


pmangrum on DSK3VPTVN1PROD with RULES
57244 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

8To view this audit, go to http://www.usda.gov/ 

oig/webdocs/33002-4-SF.pdf. The major objectives 

of the OIG audit were to examine Animal Care’s 

enforcement process against dealers that violated 

the AWA and to review the impact of recent 

changes that APHIS made to the penalty assessment 

process. 

APHIS’ plan is to incorporate newly 

affected entities into our existing 

regulatory structure using a phased 

implementation for conducting initial 

prelicensing inspections and 

compliance inspections. Factors we 

would consider when determining 

when and how frequently such 

inspections would take place include, 

but are not limited to: (1) Whether an 

entity has applied for a USDA license; 

(2) whether an entity is already subject 

to some degree of State, county, or local 

oversight, and the nature of that 

oversight; and (3) whether an entity is 

the subject of a legitimate complaint and 

the nature or severity of that complaint. 

We will conduct periodic compliance 

inspections based on a risk-based 

inspection system that calculates the 

level of risk of noncompliance. 

Because of this phased 

implementation, we do not consider it 

necessary to amend the definition of 

inspector to allow APHIS to use nonAPHIS employees to serve as inspectors. 

A number of commenters asked how 

we would identify newly regulated 

entities. One commenter suggested that 

we conduct spot checks of advertised 

breeders to confirm that they are either 

licensed or qualify for an exemption. 

Several commenters suggested that we 

develop a dealer registry and require all 

sellers or breeders to submit contact 

information, along with the appropriate 

licensing fee or a written statement 

explaining why they were exempt from 

licensing. However, a commenter 

warned that adding newly regulated 

entities to our database will take a 

sizable investment of Animal Care 

workforce hours and asked if APHIS 

considered the costs of doing so. 

We will identify newly regulated 

entities using our current methods, 

which include reviewing marketing or 

promotional material in the public 

domain, self-identification, and 

complaints. Implementation of this rule 

will take into consideration the 

workforce hours that it will take to add 

newly regulated entities to our database. 

A commenter requested that we 

investigate unlicensed ‘‘puppy brokers’’ 

who transport and sell puppies for 

commercial breeders who raise puppies 

in rural, remote areas. The commenter 

stated that such brokers are transporting 

puppies to more populated areas so that 

they can be sold out of private homes, 

for which the residents receive a 

percentage of the profit. 

APHIS investigates all credible 

reports we receive of unlicensed 

activities involving sales of covered 

pets. 

One commenter suggested that APHIS 

require breeders to maintain a record of 

whenever they move interstate and to 

allow spot audits of those records to 

determine which breeders to inspect. 

Another commenter stated that breeders 

should have to report any land or 

storage spaces they maintain and go 

through a background check and 

provide references in order to maintain 

a license. 

APHIS does not require exempted 

breeders to report such information 

cited by the commenters. However, we 

are authorized to inspect the records of 

licensed entities. 

Several commenters supporting the 

rule asked why pet stores are not subject 

to licensing and inspection under the 

regulations. Some of those commenters 

expressed concern about inhumane 

conditions in pet stores and 

recommended that they be subject to 

monitoring and inspection. Some 

commenters stated that pet stores 

should be prohibited from selling 

puppies and adult dogs, and to lesser 

extent cats, as a means to reduce the 

demand for animals from commercial 

breeders. 

Under the AWA, retail pet stores are 

exempt from regulation. 

Another commenter stated that all 

locations in which pet animals are sold 

should be required to have a licensee 

on-site at all times, and that this 

licensee should have all veterinary 

records of the animals on the premises 

available for review at all times; the 

records maintained by this licensee 

would facilitate traceback in the event 

of possible animal welfare abuses. 

Under the AWA, APHIS already 

requires licensed breeders to maintain 

such records, but we only require that 

a licensee be available to present 

records during business hours. Breeders 

exempted from licensing have no such 

recordkeeping requirements. 

One commenter suggested that APHIS 

pilot a voluntary inspection program for 

newly regulated dealers, in which 

dealers would agree to be inspected in 

exchange for assurances from APHIS 

that violations discovered during this 

inspection would not result in fines or 

penalties. Other dealers would be 

inspected based on complaints of abuse, 

and would not be exempt from 

penalties. 

We have no plans to institute a 

voluntary inspection program. APHIS 

will provide information upon request 

to persons to help them assess whether 

they need to apply for licensing and to 

offer guidance on complying with AWA 

regulations. 

A number of commenters suggested 

that the need for inspections would be 

greatly reduced if APHIS increased 

penalties for dealers who violate 

existing AWA regulations. One 

commenter pointed out that the 2010 

USDA OIG audit 8 (referred to below as 

the OIG audit) referenced in the 

proposed rule found that few, if any, 

first-time violators of the AWA were 

subject to an enforcement action, even 

for those found to be in direct violation 

of the Act. The commenter suggested 

that penalizing all first-time offenders 

would decrease recidivism, would 

further animal welfare within the 

United States, and could obviate the 

need for the proposed rule. 

We continue to review and improve 

the manner in which we assess 

penalties, consistent with our response 

to the OIG audit. However, we continue 

to maintain that this rulemaking is 

necessary in order to ensure that our 

definition of retail pet store is consistent 

with the AWA. 

We invited comments on an 

alternative regulatory scheme presented 

in the proposed rule that would 

minimize APHIS oversight of entities 

already subject to State, local, or 

industry oversight. A number of 

commenters, including several State 

agricultural officials, noted that many 

States already require licensing of 

commercial dog and cat breeders. The 

commenters stated that Federal 

oversight of breeders would likely be 

duplicative, contradictory, and 

confusing. Several commenters stated 

that APHIS should withdraw the rule in 

favor of establishing a cooperative 

Federal-State program that relies 

primarily on State officials to provide 

oversight of dealers and breeders, with 

APHIS providing guidance and 

coordination at the Federal level. 

However, a number of commenters 

disagreed, noting that State regulations 

are in many cases insufficient to provide 

for the welfare of animals sold as pets. 

Many of these commenters pointed out 

that withdrawing the proposed rule and 

deferring to States would simply 

maintain the status quo, and that the 

OIG audit clearly indicates that the 

status quo does not adequately provide 

for animal welfare. For this reason, a 

number of the commenters stated that 

State animal welfare officials should not 

be used as inspectors for purposes of 

enforcing APHIS regulations. 

A few breeders stated that, while they 

were not regulated stringently at the 

State level, they were subject to very 

stringent city or local regulations, and 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57245 

that these regulations obviated the need 

for further Federal regulation. The 

breeders suggested a locality-by-locality 

review of existing regulations prior to 

issuance of a Federal rule, and also 

encouraged us to claim selective 

preemption. 

As we noted in the proposed rule, to 

our knowledge 27 States and the District 

of Columbia have enacted laws that 

establish some form of humane welfare 

standards for animals kept at pet stores 

and sold at retail. We have provided 

many of these States with guidance on 

developing and enforcing their animal 

welfare regulations. But while these 

States and several municipalities have 

such laws, none actually address all 

categories of welfare required under the 

AWA, including veterinary care, food 

and water, proper sanitation, and 

housing. As a consequence, Federal 

oversight is necessary to ensure that 

AWA regulations are consistently 

applied across all States. 

We should add, however, that if a 

State has issued and is enforcing several 

of its regulations under a category of 

welfare required under the AWA, we 

can adjust our own inspection 

frequency and procedures in that 

category in ways that will reduce the 

burden of duplicative regulations on 

breeders in that State. 

In the proposed rule, we also invited 

comments from the public regarding the 

idea of an exemption based on oversight 

from private organizations. Many 

commenters stated that industry-run 

programs provide adequate oversight of 

certain breeders and dealers, and that 

licensing and oversight by APHIS is 

therefore unnecessary for these entities. 

One commenter, a national dog breeder 

and fancier organization, noted that they 

maintain a purebred dog registry, that 

members of that registry are subject to 

routine inspections, and that ongoing 

enrollment in the registry requires 

continued adherence to a 

comprehensive care and conditions 

policy. Several commenters noted that 

they belonged to the registry or a similar 

breed-specific registry, and that 

inclusion on the registries is in fact 

dependent on agreeing to regular 

inspections, recordkeeping 

requirements, and other welfare 

safeguards. 

However, a number of commenters 

disagreed, stating that private 

organizations are not always capable of 

adequate oversight of breeders. One 

commenter conducted a study on 

oversight by pet registry organizations 

and concluded that self-regulation 

attempts have been largely ineffective. 

They also noted that registry 

organizations only monitor breeders of 

purebred dogs, while mixed-breed and 

‘‘designer’’ dogs such as yorkie-poos, 

puggles, and labradoodles, which are 

among the most popular varieties sold 

online, appear to have no self-policing 

registries. 

We are making no changes in 

response to the comments. While some 

breed registries and other organizations 

maintain programs for oversight of 

breeders, few, if any, have requirements 

that address all categories of animal 

welfare required under the AWA. 

Furthermore, as the one commenter 

noted, many mixed-breed dog breeders 

appear to have no self-policing 

registries. 

Other commenters pointed out that a 

number of States have puppy ‘‘lemon 

laws’’ that protect consumers from the 

financial losses incurred when buying a 

sick dog, and stated that these consumer 

protection laws have the effect of 

securing animal welfare through market 

forces. Similarly, a few other 

commenters pointed out that, while not 

all States have puppy ‘‘lemon laws,’’ all 

States have laws that protect consumers 

from fraud and deceptive marketing 

practices, and that these laws could be 

enforced at the State level in a manner 

that results in State inspections of 

dealers and breeders and imposes civil 

and criminal penalties for those dealers 

and breeders who do not provide 

adequate care for their animals. Several 

of these commenters suggested that 

APHIS conduct a State-by-State review 

of animal welfare and consumer 

protection laws prior to issuing a final 

rule, and should claim preemption of 

State laws only for those States that 

have less stringent standards than those 

that dealers would have to adhere to 

under the provisions of the proposed 

rule. On the other hand, a few 

commenters stated that consumer 

protection laws do not provide 

assurances that animals are bred and 

raised humanely, but solely provide 

remedies for consumers when they 

purchase animals that turn out to be 

unhealthy or are otherwise not what 

they were portrayed to be. 

We are making no changes in 

response to the comments. ‘‘Lemon 

laws’’ protect the economic interests of 

the buyer and do not meet the goals of 

the AWA. 

Finally, one commenter suggested 

that APHIS petition Congress to amend 

the AWA so that private entities could 

bring suit against breeders, brokers, and 

handlers for AWA violations. The 

commenter stated that any damages 

awarded in a lawsuit could far exceed 

the penalties under the AWA, and 

would serve as a strong incentive to 

follow the regulations. However, a few 

commenters disagreed, pointing out that 

APHIS has limited ability to petition 

Congress to enact legislation. 

APHIS does not consider it necessary 

to amend the AWA in order to meet the 

request of the commenter. 

Constitutionality and Legal Authority 

Several commenters expressed 

concerns about the constitutionality of 

the proposed rule. One commenter 

stated that Congress is not permitted to 

delegate authority to Agencies to issue 

rules with the force of law, and that the 

rule therefore violates Section 1 of the 

Constitution. 

Congress is permitted to delegate 

authority to Agencies to issue rules. 

Another commenter stated that, 

because APHIS has no evidence that all 

individuals engaged in Internet or sight 

unseen sales are guilty of violations of 

the AWA, subjecting those who are not 

guilty to licensing amounts to a tax. The 

commenter pointed out that, as an 

Agency of the Executive Branch, APHIS 

has no authority under the Constitution 

to impose or collect taxes. 

The AWA specifically authorizes the 

assessment of licensing fees, which do 

not constitute a tax. 

A number of commenters stated that 

any change to the definition of retail pet 

store that subjects their homes to 

possible unannounced government 

inspections for AWA compliance 

violates their Fourth Amendment rights 

against unlawful search and seizure. 

Section 2146 of the AWA explicitly 

authorizes inspections of licensees to 

determine compliance with the AWA. 

However, such inspections are limited 

to only those areas that impact the wellbeing of the animals, such as areas 

where food and medicine for the 

animals are stored. 

One commenter stated that most 

animals sold as pets are born and moved 

within State boundaries. The 

commenter suggested that, since 

interstate commerce does not occur in 

those instances, attending to the welfare 

of those animals is outside of Federal 

jurisdiction under the Tenth 

Amendment and solely a State 

prerogative. 

In issuing the AWA, Congress found 

that such intrastate commerce often 

substantially affects interstate 

commerce. 

One commenter stated that the AWA 

does not address privately owned 

property, nor does it provide that a 

retail business must permit customers to 

personally visit the seller’s property to 

be considered a retail pet store. The 

commenter also stated that there is no 

assumption in the AWA that animal 

welfare entails customers visiting a 


pmangrum on DSK3VPTVN1PROD with RULES
57246 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

9See footnote 4. 

seller’s property and monitoring the 

property for compliance with the AWA. 

The AWA does not require retail pet 

sellers to allow customers to enter their 

property. A seller exempted as a retail 

pet store can indicate a place of 

business separate from his or her 

premises at which to sell pet animals at 

retail. 

One commenter stated that the rule 

essentially restricts the ability to 

advertise the availability of animals for 

sale by rendering it difficult to use the 

Internet to engage in such sales, and that 

APHIS had failed to provide a 

compelling reason for such restrictions. 

The commenter stated that using the 

Internet to sell the animal constitutes 

commercial speech and concluded that 

the rule violated the First Amendment 

right to free speech. 

The rule does not restrict the use of 

the Internet as a marketing or 

communications tool. Rather, it revises 

the definition of retail pet store to 

ensure that it stays consistent with the 

AWA. 

A few commenters noted that that the 

2010 OIG audit mentioned in the 

proposed rule focused on large-scale, 

AWA-licensed problematic dealers and 

not on small-scale breeders, and that 

APHIS inappropriately extrapolated 

from the report that breeders of all sizes 

should be under Federal oversight for 

the purpose of animal welfare. One 

commenter noted that the USDA OIG’s 

finding regarding remote, Internet sales 

(Finding 5) was that ‘‘some large 

breeders circumvented [the] AWA by 

selling animals over the Internet,’’ and 

stated that the OIG audit had broadly 

referred to these large-scale breeders as 

‘‘Internet breeders’’ later in the report 

for the sake of brevity. The commenter 

stated that, in the proposed rule, APHIS 

had construed the term ‘‘Internet 

breeder’’ in an unqualified sense that is 

at odds with the meaning of the term in 

the OIG audit. 

In the proposed rule, we used the 

term ‘‘Internet breeders’’ only for the 

purpose of passing along factual 

information regarding the OIG audit’s 

findings and were not attempting to 

assign a specialized meaning to the 

term. 

The same commenter stated that the 

OIG audit had heavily redacted 

statements made by former Secretary of 

Agriculture Ann Veneman in DDAL v. 

Veneman in order to suggest that 

Internet sellers need to be licensed. The 

commenter provided Secretary 

Veneman’s full transcript, which stated 

that oversight is necessary but is already 

being exercised by breed and registry 

organizations. The commenter 

concluded that APHIS had either taken 

these statements in the report out of 

context or relied on statements that 

were taken out of context in order to 

justify the proposed rule, and that this 

was tantamount to legal dishonesty. 

APHIS drafted the proposed rule 

because the term retail pet store was 

being understood and applied in a 

manner that was inconsistent with the 

AWA, in order to ensure that the 

definition of retail pet store in our 

regulations was consistent with the 

AWA. 

A commenter noted that the proposed 

rule makes references and comparisons 

to the Puppy Uniform Protection and 

Safety (PUPS) Act. The commenter 

stated that APHIS had assumed that the 

bill represents the will of Congress, and 

pointed out that the bill has not been 

signed into law and should not be 

considered to have the force of law for 

the sake of issuing regulations. 

The proposed rule made no 

statements suggesting the PUPS Act had 

the force of law. 

Two commenters stated that APHIS 

had failed to comply with the National 

Environmental Policy Act (NEPA) in 

issuing the proposed rule. The first 

commenter stated that we had failed to 

examine the aggregate effects on the 

environment that may occur if many 

breeders throughout the United States 

have to significantly alter their 

residences in order to meet AWA 

standards. In a similar manner, the other 

commenter stated that we had failed to 

consider the environmental impacts on 

local communities that may occur 

because of the proposed rule. 

We followed NEPA and determined 

the proposed rule was categorically 

exempt from preparation of NEPA 

documentation because it outlined 

routine measures. The commenters who 

stated that the rule would have such 

environmental effects believed that most 

residential breeders would have to make 

significant structural changes to their 

homes in order to comply with 9 CFR 

part 3; for reasons specified above and 

in the economic analysis that 

accompanies this rule, we do not 

consider that to be the case. 

Similarly, a few commenters stated 

that APHIS failed to fulfill a statutory 

duty to ensure full compliance with the 

Small Business Act, including a 

determination of impact under zoning 

laws presented by federalizing a hobby 

and converting small-scale breeders to 

home-based businesses, and submitting 

certification to the Small Business 

Administration (SBA) with a detailed 

statement on the impact of the proposed 

rule on the affected ‘‘Small Businesses.’’ 

APHIS submitted the proposed rule 

and its accompanying regulatory impact 

analysis, which included an initial 

regulatory flexibility analysis produced 

in accordance with the Regulatory 

Flexibility Act, to SBA prior to the 

publication of the proposed rule. 

A number of commenters stated that 

the factsheet 9 contained several 

responses that contradicted the 

provisions of the proposed rule. Many 

of these commenters stated that the 

average person would not interpret the 

‘‘physical entry’’ provision of the 

definition of retail pet store to allow 

face to face off-site transactions to occur. 

One of these commenters also asserted 

that the factsheet appears to grant a 

blanket exemption from licensing to all 

rescue groups, and that this exemption 

was neither explicit nor inferred within 

the proposed rule. 

In a similar manner, a number of 

commenters stated that the factsheet 

interprets the facility construction 

standards of 9 CFR part 3 in a 

performance-based manner that the 

regulations themselves, which are 

highly prescriptive, do not support. 

Several commenters concluded that the 

factsheet materially contradicts both 

existing regulations and the provisions 

of the proposed rule. The commenters 

added that APHIS had made no attempt, 

in issuing the factsheet, to specify that 

it is a ‘‘pararegulatory’’ document 

which, by definition, cannot have the 

force of law. The commenters further 

stated that the factsheet provides 

evidence that APHIS’ interpretation of 

the proposed rule will be arbitrary and 

capricious. For these reasons, the 

commenters stated that the proposed 

rule cannot be finalized and must be 

withdrawn. 

The factsheet was simply intended to 

provide additional explanation about 

the provisions of the proposed rule for 

the public. It did not contradict the 

provisions of the proposed rule. 

Several commenters cited DDAL v. 

Veneman as supporting an exemption 

from licensing for all small-scale 

residential breeders. The commenters 

asserted that APHIS had stated in DDAL 

v. Veneman that hobby breeders do not 

need to be licensed. 

As we state elsewhere in this 

document, we do not consider the term 

‘‘hobby breeder’’ to be equivalent to a 

small-scale residential breeder, nor was 

it used in such a manner in DDAL v. 

Veneman. 

One commenter stated that Congress 

has amended the AWA several times 

since its promulgation, but never sought 

to define ‘‘retail pet store’’ or otherwise 

restrict certain entities from considering 

themselves to be retail pet stores. 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57247 

It is our contention that our proposed 

definition of the term retail pet store is 

consistent with the AWA. 

One commenter stated that the rule 

had not been issued in accordance with 

Executive Order 13563. The commenter 

stated that APHIS failed to provide the 

scientific and technical basis for the rule 

and allow for a critique and evaluation 

of these bases. The commenter stated 

that it would be reasonable for someone 

to infer that the proposed rule was 

based on anecdotal evidence. The 

commenter also stated that this failure 

to provide the technical and scientific 

basis for the rule, and to apparently rely 

on anecdotal evidence, was in violation 

of Section (2)(b) of the Executive Order. 

Executive Order 13563 only requires 

regulatory Agencies such as APHIS to 

state the scientific and technical basis 

for a rule if that basis exists. The 

proposed rule was based on our 

determination that certain parties were 

construing the definition of retail pet 

store in the AWA regulations in a 

manner inconsistent with the AWA. 

The commenter further stated that, by 

failing to engage in dialog with those 

who would be potentially regulated by 

the rule, we failed to meet the objectives 

of Section (2)(c) of the Executive Order, 

which suggests that, where feasible and 

appropriate, Agencies should seek the 

views of entities likely to be affected. 

The commenter stated that he was not 

aware that we had engaged in any 

meaningful dialog with potentially 

regulated entities prior to issuance of 

the rule, and certainly not in a manner 

proportionate to the scope of the rule. 

APHIS engaged the potentially 

regulated industries at length before 

issuing the proposed rule. Our outreach 

activities included personal 

communications by telephone and in 

person. 

Other Comments 

We received many comments on 

subjects that are outside the scope of 

this rulemaking. Several of the 

comments also requested changes that 

are also outside the scope of the AWA, 

among them a ban on the sale of pets, 

mandatory spaying or neutering and 

microchipping of all pets sold at retail, 

regulation of the Internet as a marketing 

tool for pets, licensing of individuals 

who buy animals as pets and imposing 

minimum requirements on those 

individuals, and titling for animals used 

in agility competitions. 

Therefore, for the reasons given in the 

proposed rule and in this document, we 

are adopting the proposed rule as a final 

rule, with the changes discussed in this 

document. 

Executive Orders 12866 and 13563 and 

Regulatory Flexibility Act 

This final rule has been determined to 

be significant for the purposes of 

Executive Order 12866 and, therefore, 

has been reviewed by the Office of 

Management and Budget. 

We have prepared an economic 

analysis for this rule. The economic 

analysis provides a cost-benefit analysis, 

as required by Executive Orders 12866 

and 13563, which direct agencies to 

assess all costs and benefits of available 

regulatory alternatives and, if regulation 

is necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, and equity). Executive Order 

13563 emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. Executive 

Order 13563 also emphasizes the need 

for retrospective analysis of rulemaking. 

Accordingly, USDA will carefully 

monitor the implementation of this rule 

and will propose any changes that may 

be necessary to both protect the welfare 

of covered animals and to minimize 

undue burdens on the public. The 

economic analysis also examines the 

potential economic effects of this rule 

on small entities, as required by the 

Regulatory Flexibility Act. The 

economic analysis is summarized 

below. Copies of the full analysis are 

available on the Regulations.gov Web 

site (see footnote 2 in this document for 

a link to Regulations.gov) or by 

contacting the person listed under FOR

FURTHER INFORMATION CONTACT. 

This rule will primarily affect dog 

breeders who maintain more than four 

breeding females at their facilities, sell 

the offspring as pets, and whose buyers 

are not all physically present to observe 

the animals prior to purchase and/or to 

take custody of those animals after 

purchase. The rule may also affect some 

cat and rabbit breeders. While the scope 

of this rule applies to certain other 

animals, based on our experience, most 

retailers of animals other than dogs will 

meet the amended definition of retail 

pet store and continue to be exempt 

from regulation. 

The benefits of this rule justify its 

costs. More pet animals sold at retail 

will be brought under the protection of 

the AWA and monitored for their health 

and humane treatment. Improved 

animal welfare will benefit buyers of 

pets and the general public in various 

ways. Monitoring the health and 

humane treatment of pet animals should 

reduce the number of pets receiving 

inadequate care and reduces the 

possibility of sick or injured pet animals 

being purchased sight unseen. When a 

buyer receives a sick or abused pet 

animal, sight unseen, the responsibility 

for correcting inadequate care has been 

effectively transferred from the seller to 

the buyer without the buyer’s 

knowledge or consent. If that buyer is 

unable or unwilling to provide the pet 

animal with needed care, a shelter may 

become the default caregiver for that 

animal. A reduction in the number of 

sick or abused pet animals received by 

buyers may reduce the number of such 

animals sent to shelters. Public shelters 

provide for the care of these unwanted 

pet animals, usually at local taxpayer 

expense. Also, as noted by several 

commenters, neglected or abused pet 

animals confiscated from substandard 

breeding operations are often sent to 

shelters to provide for their care. Newly 

regulated commercial breeders working 

to comply with AWA regulations will 

increase the health and well-being of the 

pet animals under their care. 

In addition, when breeding operations 

for which regulatory oversight is 

insufficient fail to adequately provide 

veterinary care for their animals, the 

buyer may subsequently incur greater 

costs associated with providing that care 

because needed care has been delayed. 

The rule will benefit buyers of animals 

by providing regulatory oversight to 

ensure that breeders provide necessary 

veterinary care. 

Animals can carry zoonotic diseases 

(diseases that can be transmitted 

between, or are shared by animals and 

humans). The possibility of an animal 

carrying a zoonotic disease is reduced 

with adequate veterinary care, including 

vaccinations. To the extent that 

improved oversight reduces the 

likelihood of pet-to-human transmission 

of zoonotic diseases such as rabies, the 

public as a whole will benefit from the 

rule. The rule will also address the 

competitive disadvantage of retail 

breeders who incur certain costs by 

adhering to the AWA standards 

regulations while retail breeders who do 

not operate their facilities according to 

AWA standards may bear lower costs. 

There is a great deal of uncertainty 

surrounding the number of facilities that 

will be affected by this rule, as we 

acknowledged in the proposed rule, and 

as evidenced in the public comments. 

There are hundreds of distinct dog 

breeds, and correspondingly large 

numbers of dog breeders in the United 

States. Breeders with an online presence 

are those most likely to be selling the 

offspring sight unseen and thus are 

more likely to be affected by this rule. 

We estimate that there could be between 

8,400 and 15,000 such dog breeders in 


pmangrum on DSK3VPTVN1PROD with RULES
57248 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

the United States. This estimate is based 

on the assumption that for every five 

breeders identified by APHIS in online 

breeder registries there is one other 

breeder that has not been identified who 

also uses remote marketing methods. 

However, this rule will only affect 

those dog breeders who sell dogs as 

pets, not for hunting, security, breeding, 

or other purposes; who maintain more 

than four breeding females on their 

property; and whose buyers are not all 

physically present to observe the 

animals prior to purchase and/or to take 

custody of the animals after purchase. 

When these conditions are taken into 

account, we estimate that there are 

between 2,600 and 4,640 dog breeders 

that may be affected by this rule. The 

following table highlights the criteria 

used for identifying dog breeders 

potentially affected by this rule and the 

process used to calculate the number of 

such breeders: 

POTENTIALLY AFFECTED DOG BREEDER CALCULATIONS—A BREEDER MUST MEET ALL CRITERIA BEFORE LICENSING IS

REQUIRED

Row Category Criteria for inclusion 2 Calculation Range 

(a) ..... Number of Listed Breeders 1 ........... All listed ......................................................................... .............................. 7,000 to 12,500. 

(b) ..... Inclusion of breeders not listed ....... For every five breeders listed, we assume one more 

not listed who also has a remote marketing presence.

(a) * 1.2 ................ 8,400 to 15,000. 

(c) ...... Breeder sells pets ............................ 75% of breeders sell dogs as pets, i.e., not for hunting, security, breeding, etc.(b) * 0.75 .............. 6,300 to 11,250. 

(d) ..... AND Breeder has more than 4 

breeding females.

55% of breeders have more than 4 breeding females (c) * 0.55 .............. 3,465 to 6,188. 

(e) ..... AND Buyer purchases dog sight unseen.75% of breeders sell one or more dogs without the 

purchaser physically observing the dog before purchase and/or taking custody.

(d) * 0.75 .............. 2,599 to 4,641. 

1Two multi-breed breeder listings: www.puppysites.com and www.dogbreederregistry.com, and individual breed breeder listings for 160 individual breeds. 2Expert judgment based on online breeder registries, public comments, and APHIS’ knowledge of industry practices. 

The rule will also affect cat breeders 

who maintain more than four breeding 

females at their facilities and sell the 

offspring as pets, sight unseen. Fewer 

than 2 percent of cats in the United 

States are purebred and raised by 

breeders. We estimate that about 325 cat 

breeders may be affected by this rule. 

The rule will also affect rabbit 

breeders who sell the offspring as pets, 

sight unseen, which is not common. 

Rabbits are usually sold at auctions, 

exhibits, and fairs where the buyers are 

physically present. We estimate that no 

more than 75 rabbitries may be affected 

by this rule. 

Newly regulated breeders will be 

subject to licensing, animal 

identification, and recordkeeping 

requirements. In addition, affected 

entities will be subject to standards for 

facilities and operations, animal health 

and husbandry, and transportation. One 

set of costs attributable to the rule will 

be incurred annually by all newly 

regulated entities, such as licensing fees. 

Other costs will depend on the manner 

and extent to which entities are not 

complying with the basic standards of 

the AWA. Some of these costs will be 

one-time costs in the first year, such as 

providing adequate shelter; others will 

recur yearly, such as providing adequate 

veterinary care. 

The cost of a license for breeders is 

based on 50 percent of gross sales 

during the preceding business year. As 

an example, if 50 percent of gross sales 

are more than $500 but not more than 

$2,000, the annual cost of a license is 

$70. Identification tags for dogs and cats 

cost from $1.12 to $2.50 each. Other 

animals such as rabbits can be identified 

by a label attached to the primary 

enclosure containing a description of 

the animals in the enclosure. We 

estimate that the average licensed 

breeder requires about 10 hours 

annually to comply with the licensing 

paperwork and recordkeeping 

requirements. All newly licensed 

breeders will incur these costs. We 

estimate these costs would be between 

about $284 and $550 for a typical dog 

breeder. Costs at the 3,000 to 5,000 

newly licensed dog, cat, and rabbit 

breeders for animal licensing, animal 

identification and recordkeeping could 

range between $853,000 and $2.8 

million annually. 

The newly regulated breeders will 

also need to meet regulatory standards 

concerning facilities and operations, 

animal health and husbandry, and 

transportation. However, as 

acknowledged by a wide spectrum of 

commenters on the proposed rule, most 

breeders maintain their facilities well 

above the minimum standards of the 

AWA. Therefore, the vast majority of 

newly regulated breeders will only need 

to incur licensing, animal identification, 

and recordkeeping costs and not need to 

make structural and/or operational 

changes in order to comply with the 

standards. Neither the number of 

entities that will need to make changes 

nor the extent of those changes is 

known. Therefore, the overall cost of 

structural and operational changes that 

will be incurred due to this rule is also 

unknown. However, we can estimate the 

general magnitude of these costs by 

assuming the newly regulated entities 

exhibit patterns of noncompliance 

similar to those of currently regulated 

wholesale breeders. We agree with 

many comments we received that most 

breeders that may be affected by this 

rule are already substantially in 

compliance. 

Based on our experience regulating 

wholesale breeders, the most common 

areas of regulatory noncompliance at 

prelicensing and compliance 

inspections are veterinary care, facility 

maintenance and construction, shelter 

construction, primary enclosure 

minimum space requirements, and 

cleaning and sanitation. We apply 

percentages of noncompliance for these 

areas, multiplied by likely unit costs or 

cost ranges, to the estimated number of 

affected breeders described above to 

arrive at a total cost range for the rule. 

We estimate that costs for coming into 

compliance for currently noncompliant 

breeders could range from $2.9 million 

to $12.1 million in the first year, when 

both one-time structural changes will 

occur and annual operational changes 

will start. 

The rule will also affect some 

currently licensed wholesale breeders. 

Expanding the licensing exemption 

from three or fewer breeding females to 

four or fewer breeding females could 

reduce the number of these licensees. 

We expect that the number of current 

licensees that will fall below the 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57249 

exemption threshold following the 

implementation of this rule will be very 

small. 

The majority of businesses affected 

are likely to be small entities. As 

explained, this wide range in total cost 

is mainly derived from the uncertainty 

surrounding the total number of 

breeders that will need to become 

licensed as a result of this rule and the 

number that will then need to make 

structural or operational changes. It 

derives to a lesser degree from the 

ranges in costs that are assumed will be 

incurred by the newly licensed facilities 

to remedy instances of noncompliance. 

Executive Order 12372 

This program/activity is listed in the 

Catalog 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 final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. It is not intended to 

have retroactive effect. The Act does not 

provide administrative procedures 

which must be exhausted prior to a 

judicial challenge to the provisions of 

this rule. 

Paperwork Reduction Act 

In accordance with section 3507(d) of 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the information 

collection or recordkeeping 

requirements included in this final rule, 

which were filed under 0579–0392, 

have been submitted for approval to the 

Office of Management and Budget 

(OMB). When OMB notifies us of its 

decision, if approval is denied, we will 

publish a document in the Federal 

Register providing notice of what action 

we plan to take. 

E-Government Act Compliance 

The Animal and Plant Health 

Inspection Service is committed to 

compliance with the E-Government Act 

to promote the use of the Internet and 

other information technologies, to 

provide increased opportunities for 

citizen access to Government 

information and services, and for other 

purposes. For information pertinent to 

E-Government Act compliance related 

to this rule, please contact Mrs. Celeste 

Sickles, APHIS’ Information Collection 

Coordinator, at (301) 851–2908. 

List of Subjects in 9 CFR Parts 1 and 2 

Animal welfare, Pets, Reporting and 

recordkeeping requirements, Research. 

Accordingly, we are amending 9 CFR 

parts 1 and 2 as follows: 

PART 1—DEFINITION OF TERMS 

■ 1. The authority citation for part 1 

continues to read as follows: 

Authority: 7 U.S.C. 2131–2159; 7 CFR 2.22, 

2.80, and 371.7. 

■ 2. In § 1.1, the definitions of dealer 

and retail pet store are revised to read 

as follows: 

§ 1.1 Definitions. 

* * * * * 

Dealer means any person who, in 

commerce, for compensation or profit, 

delivers for transportation, or transports, 

except as a carrier, buys, or sells, or 

negotiates the purchase or sale of: Any 

dog or other animal whether alive or 

dead (including unborn animals, organs, 

limbs, blood, serum, or other parts) for 

research, teaching, testing, 

experimentation, exhibition, or for use 

as a pet; or any dog at the wholesale 

level for hunting, security, or breeding 

purposes. This term does not include: A 

retail pet store, as defined in this 

section; any retail outlet where dogs are 

sold for hunting, breeding, or security 

purposes; or any person who does not 

sell or negotiate the purchase or sale of 

any wild or exotic animal, dog, or cat 

and who derives no more than $500 

gross income from the sale of animals 

other than wild or exotic animals, dogs, 

or cats during any calendar year. 

* * * * * 

Retail pet store means a place of 

business or residence at which the 

seller, buyer, and the animal available 

for sale are physically present so that 

every buyer may personally observe the 

animal prior to purchasing and/or 

taking custody of that animal after 

purchase, and where only the following 

animals are sold or offered for sale, at 

retail, for use as pets: Dogs, cats, rabbits, 

guinea pigs, hamsters, gerbils, rats, 

mice, gophers, chinchillas, domestic 

ferrets, domestic farm animals, birds, 

and coldblooded species. In addition to 

persons that meet these criteria, retail 

pet store also includes any person who 

meets the criteria in § 2.1(a)(3)(vii) of 

this subchapter. Such definition 

excludes— 

(1) Establishments or persons who 

deal in dogs used for hunting, security, 

or breeding purposes; 

(2) Establishments or persons, except 

those that meet the criteria in 

§ 2.1(a)(3)(vii), exhibiting, selling, or 

offering to exhibit or sell any wild or 

exotic or other nonpet species of 

warmblooded animals (except birds), 

such as skunks, raccoons, nonhuman 

primates, squirrels, ocelots, foxes, 

coyotes, etc.; 

(3) Any establishment or person 

selling warmblooded animals (except 

birds, and laboratory rats and mice) for 

research or exhibition purposes; 

(4) Any establishment wholesaling 

any animals (except birds, rats, and 

mice); and 

(5) Any establishment exhibiting pet 

animals in a room that is separate from 

or adjacent to the retail pet store, or in 

an outside area, or anywhere off the 

retail pet store premises. 

* * * * * 

PART 2—REGULATIONS 

■ 3. The authority citation for part 2 

continues to read as follows: 

Authority: 7 U.S.C. 2131–2159; 7 CFR 2.22, 

2.80, and 371.7. 

■ 4. Section 2.1 is amended as follows: 

■ a. By revising paragraph (a)(3)(i); 

■ b. In paragraph (a)(3)(ii), by removing 

the words ‘‘to a research facility, an 

exhibitor, a dealer, or a pet store’’; 

■ c. By revising paragraphs (a)(3)(iii) 

and (a)(3)(vii); and 

■ d. In the OMB citation at the end of 

the section, by removing the words 

‘‘number 0579–0254’’ and adding the 

words ‘‘numbers 0579–0254 and 0579– 

0392’’ in their place. 

The revisions read as follows: 

§ 2.1 Requirements and application. 

(a) * * * 

(3) * * * 

(i) Retail pet stores as defined in part 

1 of this subchapter; 

* * * * * 

(iii) Any person who maintains a total 

of four or fewer breeding female dogs, 

cats, and/or small exotic or wild 

mammals, such as hedgehogs, degus, 

spiny mice, prairie dogs, flying 

squirrels, and jerboas, and who sells, at 

wholesale, only the offspring of these 

dogs, cats, and/or small exotic or wild 

mammals, which were born and raised 

on his or her premises, for pets or 

exhibition, and is not otherwise 

required to obtain a license. This 

exemption does not extend to any 

person residing in a household that 

collectively maintains a total of more 

than four breeding female dogs, cats, 

and/or small exotic or wild mammals, 

regardless of ownership, nor to any 

person maintaining breeding female 

dogs, cats, and/or small exotic or wild 

mammals on premises on which more 

than four breeding female dogs, cats, 

and/or small exotic or wild mammals 

are maintained, nor to any person acting 

in concert with others where they 

collectively maintain a total of more 


pmangrum on DSK3VPTVN1PROD with RULES
57250 Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 

1 12 U.S.C. 1757(4). 

2 12 CFR 701.36. 

3 12 CFR 721.3(d). 

4 12 CFR 701.36. 

5 12 CFR 701.36(c). 

6NCUA Interpretive Ruling and Policy Statement 

(IRPS) 87–2, as amended by IRPS 03–2, Developing 

and Reviewing Government Regulations. 7 78 FR 17136 (Mar. 20, 2013). 

than four breeding female dogs, cats, 

and/or small exotic or wild mammals 

regardless of ownership; 

* * * * * 

(vii) Any person including, but not 

limited to, purebred dog or cat fanciers, 

who maintains a total of four or fewer 

breeding female dogs, cats, and/or small 

exotic or wild mammals, such as 

hedgehogs, degus, spiny mice, prairie 

dogs, flying squirrels, and jerboas, and 

who sells, at retail, only the offspring of 

these dogs, cats, and/or small exotic or 

wild mammals, which were born and 

raised on his or her premises, for pets 

or exhibition, and is not otherwise 

required to obtain a license. This 

exemption does not extend to any 

person residing in a household that 

collectively maintains a total of more 

than four breeding female dogs, cats, 

and/or small exotic or wild mammals, 

regardless of ownership, nor to any 

person maintaining breeding female 

dogs, cats, and/or small exotic or wild 

mammals on premises on which more 

than four breeding female dogs, cats, 

and/or small exotic or wild mammals 

are maintained, nor to any person acting 

in concert with others where they 

collectively maintain a total of more 

than four breeding female dogs, cats, 

and/or small exotic or wild mammals 

regardless of ownership. 

* * * * * 

Done in Washington, DC, this 11th day of 

September 2013. 

Edward Avalos, 

Under Secretary for Marketing and Regulatory 

Programs. 

[FR Doc. 2013–22616 Filed 9–17–13; 8:45 am] 

BILLING CODE 3410–34–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 701 

RIN 3133–AE05 

Federal Credit Union Ownership of 

Fixed Assets 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: The NCUA Board (Board) is 

amending its regulation governing 

federal credit union (FCU) ownership of 

fixed assets to help FCUs better 

understand and comply with its 

requirements. The final rule does not 

make any substantive changes to those 

regulatory requirements. Rather, the 

amendments only clarify the regulation 

by improving its organization, structure, 

and ease of use. 

DATES: This rule is effective November 

18, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Pamela Yu, Staff Attorney, Office of 

General Counsel, National Credit Union 

Administration, 1775 Duke Street, 

Alexandria, Virginia 22314–3428 or 

telephone (703) 518–6593. 

SUPPLEMENTARY INFORMATION: 

I. Background and Proposal 

II. Final Rule 

III. Regulatory Procedures 

I. Background and Proposal 

A. Background 

The Federal Credit Union Act (FCU 

Act) authorizes an FCU to purchase, 

hold, and dispose of property necessary 

or incidental to its operations.1 NCUA’s 

fixed assets rule interprets and 

implements this provision of the FCU 

Act.2 In general, an FCU may only 

invest in property it intends to use to 

transact credit union business or in 

property that supports its internal 

operations or serves its members.3

NCUA’s fixed assets rule: (1) Limits 

FCU investments in fixed assets; (2) 

establishes occupancy, planning, and 

disposal requirements for acquired and 

abandoned premises; and (3) prohibits 

certain transactions.4

For purposes of the rule, fixed assets 

are premises, furniture, fixtures, and 

equipment, including any office, branch 

office, suboffice, service center, parking 

lot, facility, real estate where an FCU 

transacts or will transact business, office 

furnishings, office machines, computer 

hardware and software, automated 

terminals, and heating and cooling 

equipment.5

B. March 2013 Proposal 

Executive Order 13579 provides that 

independent agencies, including NCUA, 

should consider if they can modify, 

streamline, expand, or repeal existing 

regulations to make their programs more 

effective and less burdensome. 

Additionally, the Board has a policy of 

continually reviewing NCUA’s 

regulations to ‘‘update, clarify and 

simplify existing regulations and 

eliminate redundant and unnecessary 

provisions.’’ 6 To carry out this policy, 

NCUA identifies one-third of its existing 

regulations for review each year and 

provides notice of this review so the 

public may comment. In 2012, NCUA 

reviewed its fixed assets rule as part of 

this process. 

In March 2013, the Board proposed 

amendments to the fixed assets rule to 

make it easier for FCUs to understand.7

NCUA has continually received 

questions about the fixed assets rule, 

indicating there is some confusion about 

its application. For example, FCUs have 

asked for clarification regarding the 

waiver process, and the provision that 

requires an FCU to partially occupy 

unimproved property acquired for 

future expansion. Accordingly, the 

Board proposed amendments to the 

fixed assets rule to clarify the waiver 

and partial occupation requirements 

and to improve the rule overall. The 

proposed amendments did not make 

any substantive changes to the 

regulatory requirements. Rather, they 

only clarified the rule and improved its 

overall organization, structure, and 

readability. 

II. Final Rule 

A. Summary of the Public Comments on 

the March 2013 Proposal 

NCUA received 9 comments on the 

proposed rule: 2 from credit union trade 

associations, 6 from state credit union 

leagues, and 1 from an FCU. All of the 

commenters supported the proposal and 

indicated the amendments make the 

fixed assets rule easier to understand. 

Specifically, commenters noted that the 

plain language revisions and structural 

reorganization improve the readability 

of the rule and the newly added 

definitions enhance clarity and 

flexibility. Commenters also expressed 

support for the revised waiver 

provisions, noting the revisions improve 

consistency within the regulation and 

allow FCUs to better understand the 

waiver process. Several commenters, 

however, offered suggestions for 

substantive changes to the regulatory 

requirements in the current rule. 

For example, a number of commenters 

urged the Board to consider increasing 

or eliminating the current 5 percent 

aggregate limit on fixed assets. One 

commenter asserted that computers, 

automated terminals, and other 

equipment should no longer be treated 

as fixed assets subject to the 5 percent 

cap. Several commenters suggested the 

current requirement to fully occupy 

premises acquired for future expansion 

should be eliminated from the rule. 

Also, one commenter asked that the 

Board revise and extend the time frames 

for partially occupying improved 

premises and unimproved premises 

acquired for future expansion, which 


pmangrum on DSK3VPTVN1PROD with RULES