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###### Department of Agriculture

###### Animal and Plant Health Inspection Service

          - [Docket No. APHIS-2023-0058]

# AGENCY:

Animal and Plant Health Inspection Service, U.S. Department of Agriculture (USDA).

# ACTION:

Final notice.

# SUMMARY:

The Animal and Plant Health Inspection Service (APHIS) is announcing adjusted user fee rates for the costs of providing certain goods and services, including veterinary diagnostic goods and services and veterinary services for imports and exports of live animals and animal products. This action is necessary because the regulations provide that APHIS will issue such a notice. This action ensures that the fees charged more closely align with the costs of providing the goods or services, thus ensuring program solvency.

# DATES:

The fee rates in this notice go into effect January 10, 2025.

# FOR FURTHER INFORMATION CONTACT:

 For information on the user fee activities covered by this notice, contact Ms. Lisa Slimmer, User Fee Financial Team Manager, Veterinary Services Money Management, 920 Main Campus Drive, Raleigh, NC 27606; (919) 414-7205.

# SUPPLEMENTARY INFORMATION:

## Background

The regulations in 9 CFR part 130 (referred to below as the regulations or the user fee regulations), cover user fees to reimburse the U.S. Department of Agriculture's (USDA's) Animal and Plant Health Inspection Service (APHIS) for the costs of providing veterinary diagnostic services and import/export related services for live animals, animal products and byproducts, poultry, birds, germplasm, organisms, and vectors. These user fees are authorized by section 2509(c) of the Food, Agriculture, Conservation, and Trade Act (FACT Act) of 1990, as amended (21 U.S.C. 136a(c)), which provides that the Secretary of Agriculture may, among other things, prescribe regulations and collect fees to recover the costs of providing import/export related services for animals, animal products and byproducts, birds, germplasm, organisms, and vectors, and for veterinary diagnostics relating to the control and eradication of communicable diseases of livestock or poultry within the United States.

Since fiscal year 1992, APHIS has received no directly appropriated funds to cover the cost of certain veterinary diagnostics or to provide import/export related services for animals, animal products and byproducts, birds, germplasm, organisms, and vectors. Our ability to provide these services depends on user fees. User fees are associated with providing services for live animal, animal product, bird, and germplasm imports and exports and the user fees fund, among other things, quarantine services, the processing of import permit applications, port of entry inspections, inspections and approvals of import/export facilities and establishments, endorsements of export certificates, and services related to emergency situations that arise during the export or import process.

                    On August 1, 2023, APHIS published a final rule in the                     **Federal Register**                     that revised the regulations (88 FR 49994-50002, Docket No. APHIS-2021-0052, referred to below as the August 2023 final rule).[1]                                          This final rule removed tables providing the individual fees from the regulations and instead indicated that they are posted on the following website:                     *www.aphis.usda.gov/​business-services/​vs-fees.*                     It also provided that, on an annual basis, APHIS would propose changes to the fee rates through publication of a notice in the                     **Federal Register**                    .                

                    On November 8, 2024, we published the first such notice in the                     **Federal Register**                     (89 FR 88697, Docket No. APHIS-2023-0058, referred to below as the November 2024 notice).[2] 

We solicited comments on the notice for 30 days, ending on December 9, 2024. We received 33 comments by that date from industry groups and private citizens.

## General Comment

Four of the commenters supported the fee increases articulated in the notice. One of these commenters asked if the revenue generated by the fee increases would be used to reopen an USDA APHIS office in Conyers, Georgia.

We are uncertain what office the commenter is referring to because the USDA APHIS office in Conyers, Georgia is currently open.

                    Similarly, a commenter asked us if the additional revenue generated by the fees would go to additional staffing of                           ( print page 1942)                        personnel at ports of entry, particularly those along the southern border.                

The fees collected are allocated, in part, to staffing port environs. However, due to the nature of fee remittance and the Federal hiring process, it may take time before additional personnel are hired and stakeholders experience the benefits associated with the additional staffing.

Twenty-nine commenters disagreed with the proposed user fees for various reasons. We discuss these comments below, by topic.

Several commenters stated that they would either have to assume the financial burden associated with the fee increases as part of their business model, or pass them off to other parties in their supply chain. The commenters stated that these impacts could adversely impact international trade.  

We acknowledge that the parties subject to the user fees will have to assume the costs of the increased fees, and could pass this cost differential through to other parties in their supply chain. However, the commenters did not state that the fees had been miscalculated. Additionally, as we stated in the August 2023 final rule, the November 2024 notice, and this document, APHIS has received no directly appropriated funds to cover the cost of certain veterinary diagnostics or to provide import/export related services for animals, animal products and byproducts, birds, germplasm, organisms, and vectors. Our ability to provide these services depends on user fees. In addition, as discussed later in this notice, the fees must be changed in order to ensure that the program remains solvent and there are no disruptions of the services provided.

A number of commenters stated that the customer service associated with some of the services funded by the fees was suboptimal and/or non-standardized. Of these, several commenters recommended that APHIS' Veterinary Services (VS) provide service standards and guidelines for user fee activities to ensure consistency of services provided. In a similar vein, several commenters stated that import/export-related services were often technically difficult and inexperienced APHIS personnel could take longer to do the task, leading to disparate and potentially inflated levels of effort, and, in turn, higher fees.

                    The fees are based on average level of effort associated with the service. This helps ensure that the fees are not set against outlying scenarios that may not be indicative of usual level of effort. With that being said, APHIS exercises multiple controls to ensure that work is done in an efficient and standardized manner. This includes requiring specialized experience or its equivalent as a condition of hiring, and standard operating procedures for employees in the form of VS guidance documents (VSGs). While some of these VSGs are internal-facing, APHIS has made many of them publicly available for the sake of transparency and as a service to the general public. For example, VSGs related to the import and export of equines are found here:                     *https://www.aphis.usda.gov/​live-animal-import/​equine/​vs-guidance.*                     Finally, because commenters did not provide information regarding the services they claimed were occurring suboptimally or in a non-standard manner, APHIS is unable to evaluate these claims further.                

One commenter who stated that they were currently dissatisfied with the service provided by APHIS stated that the fees should not be raised until customer satisfaction increases.

Such a delay runs the risk of disruption of the services provided or, in a worst-case scenario, program insolvency due to insufficient funds, which would run counter to the commenter's request for increased customer service. Based on current and projected revenue, the program runs the risk of such disruptions if the fees are not increased by early spring 2025.

Several commenters stated that advance notification was necessary regarding any regulatory changes to the fee structure or possible increases in fees. One commenter requested at least 12 months advance notification, while others stated that this should be at least 12 to 24 months before the fees are raised. The commenter asking for at least 12 months advance notification characterized the fee increases in the November 2024 notice as an abrupt policy change and without prior notice.

On October 3, 2022, we issued the proposed rule on which the August 2023 final rule revising the regulations was based (87 FR 59731-59740, Docket No. APHIS-2021-0052, referred to below as the October 2022 proposed rule). In it, we indicated the nature of the regulatory revisions contemplated, and stated “we anticipate that, since APHIS' import/export and veterinary diagnostic user fees have not been updated for more than 10 years, there will be a change in the fees when APHIS applies this new approach.” (87 FR 59732). We also stated that we intended to issue a notice annually proposing actual fee rates. In the August 2023 final rule, we again indicated that we would publish an annual notice, and stated that it was the Agency's intent to issue initial and second notices adjusting the fees on an annual basis. (88 FR 49995). Finally, our November 2024 notice proposing the updated fee rates itself had a public comment period. In light of the foregoing, we believe that there was adequate notification provided of the changes to the regulations, the likelihood of fee increases, and the specific nature of the increases; we therefore disagree that the proposed fee increases were an abrupt policy change. Moreover, as noted above, further delay of issuance of the adjusted fees runs the risk of disruption of the services provided or, in a worst-case scenario, program insolvency due to insufficient funds. Based on current and projected revenue, the program runs the risk of such disruptions if the fees are not increased by early spring 2025.

Several commenters stated that APHIS should have engaged stakeholders prior to proposing to revise the fees.

                    APHIS has consistently apprised stakeholders of the need to revise the current fees. Additionally, we note that both the October 2022 proposed rule and the November 2024 notice referenced above provided an opportunity for stakeholder feedback in the form of public comment. Finally, APHIS issued notifications of the availability of both the October 2022 proposed rule and the November 2024 notice using our Stakeholder Registry. To subscribe to the Stakeholder Registry, please visit                     *https://public.govdelivery.com/​accounts/​USDAAPHIS/​subscriber/​new.*                     APHIS strives to ensure that any changes in our policies/regulations are communicated early and robustly through the Stakeholder Registry and other outreach mechanisms.                

One commenter suggested that an advisory group be established relative to the user fee regulations.

While outside the scope of this notice, we will take this suggestion into consideration.

Several commenters suggested that APHIS consider phased implementation with an altered fee structure that would allot additional time for industries to adapt to the new fees. One commenter stated we should consider implementation a year after publishing, and another commenter suggested implementation over several years.

                    The costs of providing veterinary diagnostic and import/export related services is unsustainable at the current fee rates, and the program runs the risk of disruption of the services provided or, in a worst-case scenario, program insolvency due to insufficient funds. Based on current and projected revenue, the program runs the risk of such                           ( print page 1943)                        disruptions if the fees are not increased by early spring 2025. This precludes prolonged phased implementation of the fees.                

Several commenters recommended that we tier services. Tiering suggestions included lower fees for smaller businesses, high-volume consumers of the service for which the fee is assessed, the species in question, or biosecurity compliance history.

As noted in the November 2024 notice, APHIS sets user fees based on the average level of effort identified to complete each service, for which a user fee is assessed, referred to as the direct time factor in minutes. To determine the direct time factor in minutes for each service, we conducted labor surveys for each of the organizations providing the services. APHIS does not charge different fees based on the size of an organization receiving the service, or the volume of times the organization receives the services. One of the primary reasons for this is to ensure that cross-subsidization of differing fee areas does not occur; cross-subsidization is prohibited by the FACT Act.

APHIS does charge different fees for different species of animals when the service provided for one species of animal is disaggregated from services provided to other species of animals. For example, we charge different user fees for different species of animals and birds receiving standard housing, care, feed, and handling while quarantined in an APHIS-owned or operated animal import center or quarantine facility. However, disaggregation is not always possible depending on the service in question. We discuss this at greater length later in this notice.

Several commenters suggested that some of the services for which fees are currently assessed could be subdivided into further fee classes based on level of effort. For example, one commenter suggested that export health certificates could be assessed different fees based on whether or not the certificates require additional attestations, test results, or other certifications.

With regard to the commenter's example, APHIS currently does subdivide the user fee for export health certificates based on whether or not the certificate requires additional endorsements, certificates, or verification of tests or vaccinations. This was previously set forth in the regulations themselves, and was presented in tables 24 and 25 of the November 2024 notice.

If a fee is not currently subdivided, it is because the fee was not subdivided previously in the regulations. APHIS did not amend the fee categories in the August 2023 final rule. Rather, as noted previously, we moved the current fee categories from the regulations to a website. However, APHIS is open to the consolidation or subdivision of fee categories when aggregation or disaggregation of the services provided is possible. These would be announced as part of the annual notice to adjust the fees in future notices.

Conversely, several commenters noted that we divided several user fee services into simple versus complex based on the number of hours needed to complete them. The commenters appeared to assume that these were new subcategories that the Agency would use in order to artificially increase level of effort and charge more fees.

The terms existed in the regulations prior to the August 2023 final rule and were simply ported from the regulations as a result of that final rule. The terms still have the meaning that they had while part of the regulations, and APHIS has no intent to change its practices to artificially render the services complex. Additionally, as noted elsewhere, fees were set based on average level of effort, in order to control for outlying scenarios.

Several commenters asked why fees for services provided for their class of animals or products were greater than the same service provided for other classes of animals or products.

As noted in the November 2024 notice, the differing proposed adjusted fees are the result of differing average levels of effort needed to complete each service. The same service can take different average levels of effort to complete for different classes of animal or products. For example, the average level of effort associated with the inspection of imported cattle differs from that associated with horses. This can be the result of many factors, including, but not limited to increased technical complexity associated with the task for a certain class of animals or products, specialized requirements that must be met and/or evaluated that are not applicable to other classes of animals or products, and, particularly in the case of endorsement of export certificates, extensive and non-standardized documentation and attestations.

                    A commenter asked how the cost-of-living adjustment (COLA) and consumer price index (CPI) percentages referenced in the November 2024 notice were calculated and stated that this was not explained thoroughly in the notice. The manner in which COLA and CPI are calculated for purposes of the user fee regulations was discussed at length in October 2022 proposed rule to revise the regulations, and the terms                     *cost of living*                     and                     *Consumer price index*                     are defined in the regulations themselves.                

The same commenter asserted that we needed to provide justification in the November 2024 notice that COLA and CPI adjustments directly impact direct and indirect costs to the Agency.

We disagree. The relationship was discussed in the October 2022 proposed rule to revise the regulations.

Although many commenters stated they understood the need for fee increases in general, several commenters raised concerns regarding the increase in user fees for their respective industries. Several commenters noted that the notice provided cost calculation tables for certain fees, but not for others, and asked that the final notice provide the relevant cost calculations that led to each fee. Other commenters stated that the data provided in the November 2024 notice was insufficient to assess whether the proposed fee was justified and asked for additional source data to evaluate the fee. Specific fee classes that were flagged as needing additional information included those for new and amended import permits, those for disease tests for imported equines, those for inspection of horses intended for export, those for export health certificates for bovine germplasm, and those for endorsement of export health certificates.

We believe that the October 2022 proposed rule and the August 2023 final rule provided the cost components used to calculate each fee, as well as the nature of the underlying Agency costs in each component. The examples in the November 2024 notice were illustrative to show the real costs in each component for various fee types.

                    However, in response to these requests and in the interest of full transparency, we are making all cost data on which the fees were based available at                     *www.aphis.usda.gov/​business-services/​vs-fees.*                     Please note that, due to the size of the files, they must be downloaded before viewing.                

A commenter noted that the notice did not address reimbursable overtime rates, and provided comment on these rates. However, we stated in the October 2022 proposed rule that reimbursable overtime would not be part of the notice-based process under which the November 2024 notice was issued, but rather would be adjusted periodically through a separate rulemaking process.

                    A commenter suggested that we amend the duration for which import permits are valid. This is outside the scope of both this notice and the user                           ( print page 1944)                        fee regulations under which this notice was issued.                

A commenter suggested that APHIS not require permit amendments, which are assessed a user fee, for import permits for equines when a change of expected itinerary occurs. This likewise is outside the scope of both this notice, and the user fee regulations under which this notice was issued.

A commenter suggested that all export health certificates should be electronically generated and filed.

To the extent that our trading partners allow this practice, we will pursue it. However, we note that foreign nations are sovereign to set their own import requirements for agricultural products, including the form of export health certificates that they will accept.

A commenter referenced a 2024 United States Animal Health Association (USAHA) resolution related to equine imports, and asked for a comprehensive review report to be supplied to the industry related to the Agency's use of personnel resources in order for the industry to be able to evaluate the merits of the November 2024 notice.

                    The commenter is referring to Resolution 7 passed at the 2024 Annual USAHA conference, found here:                     *https://usaha.org/​wp-content/​uploads/​2024/​12/​2024-USAHA-Resolutions-7.pdf.*                     The resolution called for “a comprehensive formal official review of all programs and units involved in the international movement of equine and equid products,” including a review of personnel resources, management protocols, policy and procedure documents and protocols, international movement data, and memoranda of understanding, derogations and waivers. This request significantly exceeds the scope of this notice and is not necessary in order to evaluate whether the fees have been calculated correctly. In this regard, we are making all source data used to calculate the fees publicly available in tandem with this final notice.                

## Comments Regarding Specific Costs and Fees

In our November 2024 notice, we indicated that factors leading to the increase of the fees included increased level of effort and expertise associated with providing different services. As an illustrative example, we indicated that export health certificates had historically been VS forms that allowed information to be presented in a standardized way. However, in recent years, many countries have changed their import requirements and now require country and species-specific health certificates. We also noted that the certificates can now vary widely in terms of the information they contain, the requirements they cite, and the type of certificate that can be used. We provided further that all export health certificates must now be verified for each animal or shipment of product being exported. We noted that all of these factors had increased the level of effort needed to complete the work, and increased the need for subject matter expertise to ensure the work addresses the additional complexities now involved.

Several commenters stated that endorsement of export health certificates for bovine germplasm had become more streamlined, rather than more complex, and argued that fees should have gone down, rather than risen, if based on the level of complexity.

Endorsement of export health certificates for bovine germplasm falls within the larger category of endorsement of export health certificates for animal products and is not disaggregated from endorsements for export health certificates of other types of products, for which level of effort and complexity has increased.

Additionally, we note that increased level of complexity was not the sole factor leading to the increased fees. Rather, the fees were set based on all cost components listed in the regulations, and all cost components associated with the fees have increased since they were last set.

Several commenters stated that subject matter expertise was not specifically needed to endorse export health certificates for animal products.

We disagree that subject matter expertise is not needed for the endorsement of export certificates for animal products. Some of the endorsements are lengthy in terms of documentation and highly complex. Moreover, many countries specifically require endorsement by individuals with a certain level of credentials, technical expertise, and/or experience. While APHIS does attempt to ensure these are actually required for the endorsements in question through trade negotiations and the development of export protocols, as noted previously, foreign countries are sovereign and may set their own import requirements.

In our November 2024 notice, we stated that the total information technology (IT) costs included in the update were $6,461,071.38 for Import-Export to ensure funding is available as costs are actualized.

A commenter asked us what IT improvements had been budgeted in this estimate, and how industry and APHIS would be able to use them.

The costs include not only development of new IT and equipment costs, but also operation and maintenance costs, new information technology and equipment costs. With that being said, projected projects include:
    - APHIS-VS Trade System Modernization design and development, including live animal exports and imports, animal import center reservations, and product import and export certificates and facility inspections.
    - Further development of APHIS' EFile system, which handles APHIS' permitting processes.
    - Further development and identified enhancements to APHIS' Veterinary Export Health Certification System, also known as VEHCS.
    - Design and development of the User Fee invoicing system.

A commenter asked why the fee for housing, care, feed, and handling of miniature horses while in import-related quarantine was increasing at a greater rate than the fee for similar services for non-miniature equines. They also inquired why there is not a depreciation of the fee for miniature horses for instances of prolonged care, as there is for non-miniature equines.

As noted in the paragraphs below table B in the November 2024 notice, this is because the fee for such services for miniature horses is based on an alternate fee structure for instances when there is no identifiable volume in the previous year, when the fee is rarely charged, or when APHIS cannot readily identify level of effort. In such instances, we will calculate the fee based on the last available historic data, including inflation, program, agency, department and support costs, imputed costs, and reserve.

There is not a depreciation of the fee for instances of prolonged care for miniature horses, as there is for non-miniature equines, because there was not such a depreciation for miniature horses previously in the regulations, as there was for non-miniature equines. As noted previously, the August 2023 final rule did not amend the fee categories, but, rather, moved the current fee categories from the regulations to a website.

In the November 2024 notice, we proposed to increase the fees for processing import permit applications.

                    Several commenters stated that import permits for their class of animal or animal products and/or their exporting country were routine and processing fees should not have                           ( print page 1945)                        increased to the extent that we proposed.                

                    The processing of import permits is a service where disaggregation based on the class of animal or animal product or the exporting country in question is not possible. The fees were calculated based on the average level of effort to complete the issuance of import permits. Additionally, as a matter of transparency, we are making all cost data on which the fees were based available at                     *www.aphis.usda.gov/​business-services/​vs-fees.*

Therefore, in accordance with § 130.3(a), we are updating the fees as proposed and without modification.

*Authority:*5 U.S.C. 5542; 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 3701, 3716, 3717, 3719, and 3720A; 7 CFR 2.22, 2.80, and 371.4.                

Done in Washington, DC, this 6th day of January 2025.

Donna Lalli,

Acting Administrator, Animal and Plant Health Inspection Service.

# Footnotes

1.                             To view the final rule, go to                         *https://www.regulations.gov/​document/​APHIS-2021-0052-0014.*
        Back to Citation      

2.                             To view the notice or the comments that we received, go to                         *https://www.regulations.gov/​docket/​APHIS-2023-0058.*                         Additionally, please note that on November 22, 2024, we issued a correction to the notice to provide a proposed fee that was inadvertently omitted from table 21 in the initial notice.                    
        Back to Citation      

[FR Doc. 2025-00421 Filed 1-8-25; 8:45 am]

BILLING CODE 3410-34-P