### United States Department of Agriculture Animal and Plant Health Inspection Service March 2012 Analysis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities

Final Rule APHIS

- 20 07

- 0 158
RIN 0579

- AD30 Amend 9 CFR 92.1 and 92.2, to modify the information requested from foreign regions applying for recognition of animal health status

Policy & Program Development Policy Analysis & Developmenti 

### Summary

Fore ign regions requesting an update of their animal disease status, as recognized by the United States, do so by undergoing an evaluation process that includes completing a n 11

- factor questionnaire. However, the content and format of the questionnaire may be causing delays in the evaluation process. Additionally, the 11 factors do not specifically address regions that may be considered historically free of a disease in accordance with OIE standards. This rul e will consolidate the questionnaire into an eight

- factor format, provide explanatory paragraphs for each factor, and make provisions for regions that may be considered historically free of a disease. APHIS’ evaluation process consists of two phases, inclu ding a site visit. The foreign region requesting the change in disease status is required to complete the questionnaire in Phase 1. We expect that the new format will reduce the time required for completion of the questionnaire and result in submission o f more complete information , resulting in more efficient processing by APHIS of requests for updating of disease status. The time savings could have minor effects for U.S. businesses and consumers; subsequent animal or animal product imports allowed becau se of the updating of a region’s disease status could begin sooner, all things equal

. Industries that could be affected by the final rule, wholesalers and producers of animals and animal products, are largely composed of small entities. However, based on expected impacts, the final rule will not have a significant economic effect on a substantial number of small entities.ii 

### Table of Contents Summary

................................ ................................ ................................ .............................. i Introduction

................................ ................................ ................................ ......................... 1 Potential Impact s ................................ ................................ ................................ ................. 2 References

................................ ................................ ................................ ........................... 51 

### Introduction
This analysis provides the basis, as required by the Regulatory Flexibility Act, for certification by the APHIS Administrator that the rule will not have a significant economic impact on a substantial number of small entities. Foreign regions wishing to have their animal health status reviewed and updated normally provide the Animal and Pl ant Health Inspection Service (APHIS) with the requested information in the 11

- factor format outlined in 9 CFR 92.2(b). Veterinary Services’ (VS) Regionalization Evaluation Services (RES) staff then initiates an evaluation of the status of the particular disease in the requesting region. However, there are often delays in the evaluation process due to gaps in the information submitted , which require additional time and resources to address . We believe that part of the reason for such insufficient informat ion is that, in some cases, the 11 factors are not clear as to the information that is required. This rule w ill amend the 11 factors used to evaluate the animal health status of foreign regions. The 11 factors w ill be consolidated to 8, thereby eliminating redundancies and improving the logical flow of the questionnaire . T he more streamlined format w ill begin with a narrative that describes APHIS’ evaluation process and the informational requirements, and w ill include explanatory descriptions under each fac tor. These changes are intended to remove areas of misunderstanding and help eliminate delays due to submission of insufficient information. The final rule w ill provide for the recognition of regions as historically free of a given disease, which w ill be determined using a historically free status questionnaire aligned with World Organization for Animal Health (OIE) standards. The questionnaire w ill facilitate the status evaluation for a region that does not conduct active surveillance for a disease si mply because it has historically been free of the disease.2 

### Potential Impacts
APHIS has identified two potential benefits related to the expected reduction in the time required to process requests by foreign regions for updates of disease status: (i) more efficient use of APHIS resources, and (ii) the possibility of gains to U.S. businesses and consumers because importation of animal s or animal product s following the updating of a region’s disease
status w ill begin sooner, on average, than currently.
APHIS will bear costs of developing the eight

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

- factor questi onnaire. The RES evaluation process has two phases, with their length of time dependent on the activities of both APHIS and the foreign region. During Phase 1, information is gathered using the 11

- factor format and logistical arrangements are made for an in

- country site visit. Phase 2 spans the site visit and preliminary steps of rulemaking, including preparation of the risk analysis and the regulatory workplan. APHIS expects that the final rule w ill reduce the amount of time that it normally takes to

co mplete Phase 1 of the evaluation process. Specifically, the final rule and new questionnaires will promote more complete initial information submissions and thereby reduce the time required for APHIS and the foreign region to address information gaps. A re view of timelines for past evaluations found that Phase 1 has averaged about 15 months, with APHIS tasks and those of the foreign region each taking about an equal share of this time. 1 Phase 2 has averaged about 14

1 The maximum time spent in this phase was about 19 months by APHIS and nearly 28 months by the foreign region.3 months, with APHIS tasks consuming about three

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

- fourth. RES receives about four questionnaires a year from regions requesting an updating of disease status. 2 As an example of potential time savings per evaluation, if the revised questionnaire were to result in a 10 percent reduction of Phase I time compared to present, the time saved would be about 0.75 month, or three weeks , based on a Phase 1 average time

r equirement for foreign regions of 7.5 months. Multiplying this time savings by an average of 8 questionnaires per year yields a total savings of about 24 weeks per year for completing Phase 1 tasks. As this scenario suggests, the aggregate time savings f rom more rapid completion of the evaluation process could be sizable. Net benefits of the rule for the private sector are not as readily apparent. Using this same hypothetical example, a region would b e able to begin to export the product of concern to t he United States three weeks earlier than at present, all things equal. 3 U.S. businesses and consumers could be affected by this earlier initial entry date, but we expect any such impacts will be minor. For U.S. welfare as a whole, whatever benefits might accrue to consumers from a three

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

- week period, in terms of the price decline and i ncreased foreign competition

. In accordance with the Regulatory Flexibility Act of 1980 (Public Law 96

- 354), we consider the expected impact of the final rule on small businesses, small organizations, and small governmental jurisdictions. The final rule su pports a continuing policy to allow the import ation

2 Personal Communication with Dr. Kelly Rhodes, USDA APHIS RES. 3 Importation will require that there were no other prohibitive sanitary restrictions in place.4 of foreign animal products that pose no significant risk of introducing pests or disease s into the United States. This rule will amend 9 CFR 92.1 and 92.2. Potentially affected entities are importers and producers of animals and animal products. The majority of such enterprises are small entities as defined by the Small Business Administration. For most categories of wholesale trade, the small

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

- entity standard is not more than $750, 000 in annual receipts. Most businesses that could be affected by this rule are small, but we expect the effects to be insignifica nt. Although we do not know the actual time savings that will be achieved, for a foreign region to be able to export a particular animal or animal product to the United States a few weeks

– or even months

– sooner than generally has been the case under the e xisting regulations is not expected to have a significant effect on U.S. businesses, either positively or negatively. T he APHIS Administrator has determined that this action will not have a significant economic impact on a substantia l number of small entities.5 

### References
Census of Agriculture, 2007 , http://www.nass.usda.gov/Census_of_Agriculture/index.asp Economic Census, 2007 , http://www.census.gov/econ/census07/ Small Business Administration. A Guide for Government Agencies How to Comply with the Regulatory Flexibility Act

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