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.

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new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

57483 

Vol. 70, No. 190 

Monday, October 3, 2005 

DEPARTMENT OF AGRICULTURE 

Rural Business-Cooperative Service 

7 CFR Parts 4279 and 4287 

RIN 0570–AA34 

Business and Industry Guaranteed 

Loan Program Annual Renewal Fee 

AGENCY: Rural Business-Cooperative 

Service, USDA. 

ACTION: Final rule. 

SUMMARY: In this final rule the Rural 

Business-Cooperative Service (the 

Agency) amends its regulation for the 

Business and Industry (B&I) Guaranteed 

Loan Program to provide the authority 

for the charging of an annual renewal 

fee on all loans obligated after the 

publication of the final rule. This 

annual renewal fee is in addition to the 

existing one-time guarantee fee. Changes 

to modify the program regulations were 

originally proposed on February 28, 

2005. The intended effect of this rule is 

to reduce the subsidy rate for 

guaranteed loans allowing the budget 

authority dollar level to support a 

greater level of assistance to the public 

(i.e., higher supportable loan level). A 

notice will be published in the Federal 

Register each fiscal year that will 

establish the guarantee fee rate and any 

annual renewal fee rate for loans 

obligated during that fiscal year. 

DATES: This rule is effective October 3, 

2005. 

FOR FURTHER INFORMATION CONTACT: Rick 

Bonnet, Special Projects/Programs 

Oversight Division, Rural BusinessCooperative Service, U.S. Department of 

Agriculture, STOP 3221, 1400 

Independence Avenue, SW., 

Washington, DC 20250–3221, telephone 

(202) 720–1804, or by e-mail to 

rick.bonnet@wdc.usda.gov. 

SUPPLEMENTARY INFORMATION: 

Classification 

This final rule has been determined to 

be non-significant and has not been 

reviewed by the Office of Management 

and Budget (OMB) under Executive 

Order 12866. 

Programs Affected 

The Catalog of Federal Domestic 

Assistance number for the program 

impacted by this action is 10.768, 

Business and Industry Loans. 

Civil Justice Reform 

This proposed rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. In accordance with this 

rule, (1) all state and local laws and 

regulations that are in conflict with this 

rule will be preempted, (2) no 

retroactive effect will be given this rule, 

and (3) administrative proceedings of 

the National Appeals Division (7 CFR 

part 11) must be exhausted before 

bringing suit in court challenging action 

taken under this rule. 

Environmental Impact Statement 

This document has been reviewed in 

accordance with 7 CFR part 1940, 

subpart G, ‘‘Environmental Program.’’ 

The Agency has determined that this 

action does not constitute a major 

Federal action significantly affecting the 

quality of the human environment, and, 

in accordance with the National 

Environmental Policy Act of 1969, 42 

U.S.C. 4321 et seq., this is a categorical 

exclusion and therefore an 

Environmental Impact Statement is not 

required. 

Government Paperwork Elimination 

Act (GPEA) Statement 

The Agency is committed to 

compliance with GPEA, which requires 

Government agencies, in general to 

provide the public the option of 

submitting information or transacting 

business electronically to the maximum 

extent possible. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995, the information 

collection requirements contained in 

this regulation have been approved by 

OMB under control number 0570–0017. 

Unfunded Mandates 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Pubic Law 

104–4 establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. Under section 202 of the UMRA, 

agencies generally must prepare a 

written statement, including a costbenefit analysis, for proposed and final 

rules with ‘‘Federal mandates’’ that may 

result in expenditures to State, local, or 

tribal governments, in the aggregate, or 

to the private sector of $100 million or 

more in any one year. When such a 

statement is needed for a rule, section 

205 of UMRA generally requires 

agencies to identify and consider a 

reasonable number of regulatory 

alternatives and adopt the least costly, 

more cost-effective, or least burdensome 

alternative that achieves the objectives 

of the rule. This rule contains no 

Federal mandates (under the regulatory 

provisions of Title II of the UMRA) for 

State, local, and tribal governments or 

the private sector. Thus, this rule is not 

subject to the requirements of sections 

202 and 205 of the UMRA. 

Regulatory Flexibility Act 

In compliance with the Regulatory 

Flexibility Act, the Agency has 

determined that this action would not 

have a significant economic impact on 

a substantial number of small entities, 

because the action will not affect a 

significant number of small entities, as 

defined by the Regulatory Flexibility 

Act (5 U.S.C. 601). The Agency made 

this determination based on the fact that 

this regulation only impacts those who 

choose to participate in the program. 

Small entity applicants will not be 

impacted to a greater extent than large 

entity applicants. 

Executive Order 13132 

It has been determined that, under 

Executive Order 13132, Federalism, this 

rule does not have sufficient federalism 

implications to warrant the preparation 

of a Federalism Assessment. The 

provisions contained in this rule will 

not have a substantial direct effect on 

states or their political subdivisions or 

on the distribution of power and 

responsibilities among the various 

levels of government. 

Executive Order 13175 

Executive Order 13175, Consultation 

and Coordination with Indian Tribal 

Governments, imposes requirements on 

USDA in the development of regulatory 

policies that have tribal implications or 

57484 Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Rules and Regulations 

preempt tribal law. USDA has 

determined that the proposed regulation 

does not have a substantial direct effect 

on one or more Indian tribes or on either 

the relationship or the distribution of 

powers and responsibilities between the 

Federal Government and the Indian 

Tribes. Thus, the proposed rule is not 

subject to the requirements of Executive 

Order 13175. 

Background 

The cost of the B&I Guaranteed Loan 

Program has gone up in recent years. 

This is due to higher defaults and lower 

interest rates. In the meantime, there is 

still an interest in funding this program 

in order to improve, develop, or finance 

business, industry, and employment 

and improve the economic and 

environmental climate in rural 

communities. To do that in a cost 

efficient manner for the taxpayer, the 

Agency is implementing its authority to 

impose an annual renewal fee. This will 

reduce the subsidy allowing the Agency, 

without additional costs to the taxpayer, 

to maintain the level of assistance that 

has been historically provided for this 

program to meet demand. 

The annual renewal fee is based on 

similar fees charged in the Small 

Business Administration (SBA) 

programs. Additionally, this type of fee 

is consistent with the recently 

authorized Renewable Energy Systems 

and Energy Efficiency Improvements 

Guaranteed Loan Program within the 

Agency. The borrower pool for the B&I 

Guaranteed Loan Program is even more 

likely to be able to afford this type of fee 

compared to other programs mentioned 

because the amount of the fee is 

anticipated to be less. 

The SBA 7(a) Loan Guarantee 

Program and the B&I program are 

similar in that they both require an 

initial one-time fee; and 7(a) loans have 

an annual fee similar to the one being 

implemented for the B&I program. In 

fiscal year (FY) 1996, SBA made major 

changes in its 7(a) program by lowering 

the maximum percentage of the loan 

which could be guaranteed and 

increasing both the initial fee and the 

annual fee, which made the program 

more expensive and less valuable for 

borrowers and lenders. We examined 

changes in loan volume and loss levels 

associated with these changes, and 

found no convincing evidence that the 

FY 1996 changes decreased demand for 

the 7(a) program. 

Subsidy rates are established using 

historic loss data from the program and 

other assumptions. In recent years the 

subsidy rate has increased significantly, 

resulting in a reduction in the amount 

of loans that could be guaranteed with 

the same budget authority. In the 

absence of additional budgetary 

authority, the proposed annual fee is 

necessary to cover expected losses from 

the program. The effect of the fee on the 

loan demand and program activity over 

the long term will depend on the size of 

the fee and other factors not related to 

the fee, including interest rates and 

general economic growth. This change 

is prudent and cost efficient and will 

allow us to maintain the level of 

assistance going to rural America at a 

reasonable cost to the taxpayer. 

The Agency is waiving the 30-day 

waiting period between publication of 

the rule and when it will take effect. 

The reason is to make all loans obligated 

in FY 2006 subject to the same fee 

structure. Having loans obligated with 

different fee structures in the same fiscal 

year could cause confusion and impose 

an additional administrative burden on 

lenders. Also, because lenders will not 

need to make the first renewal fee 

payments to the Agency until January of 

2007, and because the Final Rule makes 

only minor changes to the Proposed 

Rule, program participants are not 

expected to be disadvantaged by this 

rule’s earlier implementation. For these 

reasons, the Agency finds that good 

cause exists for this rule’s immediate 

implementation. 

Comments on the Proposed Rule and 

Responses 

The following paragraphs summarize 

the comments received and the Agency 

responses. We received 11 responses of 

which 8 were from the lending 

community (3 from the same bank), 2 

were from Agency employees, and one 

was from a national association. 

Generally, the comments were negative. 

The only positive comment was that the 

annual renewal fee was the best 

alternative to reduced funding levels in 

the short term. 

Several changes were made to the 

final rule as a result of comments 

received. The most significant change 

was to give the Agency discretion in 

canceling the guarantee for nonpayment 

of the renewal fee and to charge lenders 

interest on any unpaid renewal fees. 

Seven respondents felt an annual fee 

would be a financial burden/hardship 

on the borrowers, especially new 

businesses and those with more limited 

recourses. The Agency acknowledges 

that the fee will most likely represent an 

increased cost to the borrower. 

However, because the B&I Guaranteed 

Loan Program is intended only for 

credit-worthy businesses, the Agency 

feels the additional financing cost will 

not jeopardize the success of the 

businesses assisted. Agencies, in 

accordance with the Federal Credit 

Reform Act of 1990 and guidance 

provided in OMB Circular A–129, 

Appendix A(II)(4)(b)(1), are to establish 

fees structures at levels that minimize 

subsidy costs while supporting 

achievement of program objectives. The 

Agency is taking measures to improve 

the quality of its portfolio and reduce 

loan losses. Nevertheless, the Agency is 

required to further minimize subsidy 

costs. The Agency feels the renewal fee 

is the most equitable solution to 

increased costs without jeopardizing the 

achievement of program objectives. 

Six respondents felt the renewal fee 

would make the B&I Guaranteed Loan 

Program more complicated and difficult 

to market. The uncertainty of the 

amount of the fee percentage rate would 

make it especially difficult to market, 

which would discourage lenders from 

marketing the program. USDA could 

lose its competitive advantage with SBA 

if additional SBA-like fees are imposed. 

One respondent commented that the fee 

rate could change if the initial 

application was received in a fiscal year, 

but not obligated until the next fiscal 

year, which would further hamper 

marketing activities. The Agency 

acknowledges the program complexity 

and marketing challenges the renewal 

fee will add, but a reduction in the 

subsidy cost is needed to maintain the 

level of assistance that has been 

historically provided for this program. 

As described in § 4279.107(b)(1) of the 

rule, the Agency will publish the fee 

percentage rate in a Federal Register 

notice each fiscal year. The Agency will 

publish the notice as soon as the fee 

percentage rate has been determined to 

provide as much advanced notice as 

possible. All loans obligated that fiscal 

year will be subject to that same fee 

percentage rate for the full term of the 

loan. 

Four respondents felt the increased 

cost of the program would result in 

fewer loans and businesses being 

assisted, thereby hindering economic 

development and job creation. The 

Agency had a Regulatory Impact 

Analysis completed to determine the 

impact that a renewal fee would likely 

have on loan demand. As mentioned 

earlier in this document, in FY 1996, 

SBA made major changes in its 7(a) 

program by lowering the maximum 

percentage of the loan which could be 

guaranteed and increasing both the 

initial fee and the annual fee, which 

made the program more expensive and 

less valuable for borrowers and lenders. 

A review of the changes in loan volume 

and loss levels associated with these 

changes revealed no convincing 

evidence that the FY 1996 changes 

Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Rules and Regulations 57485 

decreased demand for the 7(a) program. 

Due to the similarities of the programs, 

the Agency believes the results will be 

similar. 

One respondent felt the additional 

cost of the program would undermine 

worthwhile projects and discourage the 

more credit-worthy businesses from 

participating in the program. This could 

result in a decline in the quality of the 

overall portfolio over time, which 

would tend to increase costs to the 

government. The Regulatory Impact 

Analysis revealed that there was no 

convincing evidence that the changes in 

the SBA program resulted in a decrease 

in the quality of the SBA 7(a) loan 

portfolio. Due to the similarities of the 

programs, the Agency believes the 

impact on the B&I Guaranteed Loan 

Program will be similar. 

Six respondents felt it would be a 

significant administrative burden for the 

lenders. The Agency appreciates the 

burden this change will impose. In an 

effort to keep the burden to a minimum, 

the Agency is combining the lender’s 

existing semiannual reporting 

requirement with the renewal fee 

payment process. Currently, lenders are 

required to report the principal and 

interest balances, amount advanced, 

interest rate, loan status, and amount 

ahead or behind schedule on each 

guarantee loan, semiannually. The 

Agency is web-enabling this process 

where the lender will be required to 

enter a secure website, enter the 

currently required information, as of 

December 31 of each year, and the 

system will calculate the annual fee due 

on that loan. The fee will then be drawn 

from a specified account in the lender’s 

bank on a specified date. This action 

will satisfy both the annual renewal fee 

payment and the semi-annual status 

report to the Agency. The due date of 

the renewal fee was also changed from 

March 1 to January 31 to correspond 

with the due date of the lender’s 

semiannual status reporting 

requirement, but the date any unpaid 

fee was considered delinquent remained 

April 1. 

One respondent suggested a change in 

the name of the form used to collect the 

renewal fee. The final rule is revised to 

remove the name of the form to provide 

maximum flexibility in the mechanism 

used to collect the fee. 

One respondent thought the renewal 

fee should be paid monthly or quarterly 

to reduce the financial impact from one 

annual payment. The Agency 

acknowledges the language in the 

proposed rule suggested the borrower 

was expected to pay the renewal fee 

once a year. The Agency anticipates 

lenders will likely factor the renewal fee 

into their interest rate structure, and 

collect the renewal fee as a part of the 

regular borrower payments. The 

language is therefore revised to give the 

lender maximum flexibility in 

establishing a rate structure. The final 

rule does not stipulate who is 

responsible for the fee. The lender 

actually pays the fee, but may pass the 

fee on to the borrower. 

One respondent felt the fee should be 

restricted to the guaranteed portion of 

the loan. The Agency agrees, and the fee 

will be charged only on the guaranteed 

portion of the loan. 

One respondent felt the Agency 

should refund the ‘‘unearned’’ portion 

of the renewal fee when the borrower 

prepays its loan before the end of the 

year, after the renewal fee has been paid 

for the year. The Agency is not adopting 

this suggestion as the administrative 

burden on lenders and the Agency 

would be prohibitive. The amount of the 

fee on the average B&I loan is relatively 

small. With the proposed annual 

renewal fee rate of 1⁄8 of one percent for 

FY 2006, the amount of the fee on a $1 

million B&I loan for a full year would 

be only $1,250. Depending on how a 

lender structures the loan payments, the 

borrower may not benefit from the 

return of ‘‘unearned’’ fees. Section 

4279.107 states the guarantee fees are 

non-refundable, and this has been the 

policy in the B&I Guaranteed Loan 

Program for many years. 

One respondent felt there could be 

significant servicing and legal issues for 

the Agency if a guarantee is cancelled 

for non-payment of the renewal fee. The 

Agency agrees and is changing the 

language to state that the Agency may, 

at its discretion, cancel the guarantee to 

the lender for nonpayment of the 

renewal fee. Language is also added 

where the Agency will charge the lender 

interest on any delinquent renewal fees 

and will deduct any unpaid renewal 

fees from any loss payment made to the 

lender. 

One respondent suggested alternatives 

to the renewal fee, such as varying the 

amount of initial fee, based on the size 

of the loan. The Agency has statutory 

limitations on the maximum initial fee 

that may be charged and is charging the 

maximum initial fee allowed, with 

certain limited exceptions. The Agency 

feels the annual renewal fee approach is 

the most equitable alternative. 

Two respondents felt the proposed 

rule change would be a violation of 

statute. The Farm Security and Rural 

Investment Act of 2002 (Farm Bill) gives 

the Secretary authority to assess a 1- 

time fee in an amount that does not 

exceed 2 percent of the guaranteed 

principal portion of the loan. One 

respondent indicated that the proposed 

rule eliminates the language concerning 

the cap, which could result in a 

perceived conflict with the terms of the 

Farm Bill. The Agency is replacing the 

language concerning the 2 percent cap. 

The other respondent suggested the 

renewal fee violates statute because the 

combined fees will very likely exceed 2 

percent cap established in the statute. 

The Rural Development Manager’s 

Report to the 2002 Farm Bill states that 

the 2 percent initial fee limit established 

by statute does not prevent the Secretary 

from imposing annual fees which may 

be needed to preserve an appropriation 

level. 

One respondent stated that 

§ 4279.107(b)(2) states the holder’s 

rights will continue in effect as 

specified in the Loan Note Guarantee, 

and suggested the reference should be to 

the Assignment Guarantee Agreement 

instead. The final rule references both 

the Loan Note Guarantee and the 

Assignment Guarantee Agreement. 

Several technical changes not made in 

the proposed rule were made in the 

final rule to help Agency employees and 

lenders administer the program. 

Language was also added to the B&I 

loan servicing regulation (7 CFR Part 

4287, subpart B) to reference the annual 

renewal fee requirements described in 

§ 4279.107. 

Section 4279.107(a)(2)(i) of the 

proposed rule stated the rate of the fee 

is the rate in effect at the time of the 

original issuance of the Conditional 

Commitment for the loan and will 

remain in effect for the life of the loan. 

It is very unlikely, but possible, for the 

Conditional Commitment and loan 

obligation to occur in different fiscal 

years. Because the fee rate and 

obligation are tied to the fiscal year in 

the Agency’s accounting system, the 

controlling event was changed to the 

date of obligation. 

List of Subjects in 7 CFR Parts 4279 and 

4287 

Loan programs—Business and 

industry—Rural development 

assistance, Rural areas. 

■ Therefore, chapter XLII, title 7, Code 

of Federal Regulations, is amended as 

follows: 

PART 4279—GUARANTEED 

LOANMAKING 

■ 1. The authority citation for part 4279 

is revised to read as follows: 

Authority: 5 U.S.C. 301; 7 U.S.C. 1989. 

57486 Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Rules and Regulations 

Subpart B—Business and Industry 

Loans 

■ 2. Section 4279.107 is revised to read 

as follows: 

§ 4279.107 Guarantee fees. 

For all new loans there are two types 

of non-refundable guarantee fees to be 

paid by the lender. The fees may be 

passed on to the borrower. The fees may 

be forwarded to the Agency through an 

electronic funds transfer system or, at 

the Agency’s discretion, by a check 

payable to USDA using a USDAapproved form. 

(a) Initial guarantee fee. The initial fee 

is paid at the time the Loan Note 

Guarantee is issued. The fee may be 

included as an eligible loan purpose in 

the guaranteed loan. The fee will be the 

rate (a specified percentage not to 

exceed 2 percent) multiplied by the 

principal loan amount, multiplied by 

the percent of guarantee. Subject to 

specified annual limits set by the 

Agency, the initial guarantee fee may be 

reduced to 1 percent if the borrower’s 

business supports value-added 

agriculture and results in farmers 

benefiting financially, or 

(1) Is a high impact business 

development investment in accordance 

with § 4279.155(b)(5), and 

(2) Is located in a rural community 

that: 

(i) Is experiencing long-term 

population decline and job 

deterioration, or 

(ii) Has remained persistently poor 

over the last 60 years, or 

(iii) Is experiencing trauma as a result 

of natural disaster, or 

(iv) Is experiencing fundamental 

structural changes in its economic base. 

(b) Annual renewal fee. The annual 

renewal fee is paid once a year and is 

required to maintain the enforceability 

of the guarantee as to the lender. 

(1) The rate of the annual renewal fee 

(a specified percentage) is established 

by Rural Development in an annual 

notice published in the Federal 

Register, multiplied by the outstanding 

principal loan balance as of December 

31 of each year, multiplied by the 

percent of guarantee. The rate is the rate 

in effect at the time the loan is 

obligated, and will remain in effect for 

the life of the loan. 

(2) Annual renewal fees are due on 

January 31. Payments not received by 

April 1 are considered delinquent and, 

at the Agency’s discretion, may result in 

cancellation of the guarantee to the 

lender. Holders’ rights will continue in 

effect as specified in the Loan Note 

Guarantee and Assignment Guarantee 

Agreement. Any delinquent annual 

renewal fees will bear interest at the 

note rate and will be deducted from any 

loss payment due the lender. For loans 

where the Loan Note Guarantee is 

issued between October 1 and December 

31, the first annual renewal fee payment 

will be due January 31 of the second 

year following the date the Loan Note 

Guarantee was issued. 

PART 4287—SERVICING 

■ 3. The authority citation for part 4287 

continues to read as follows: 

Authority: 5 U.S.C. 301; 7 U.S.C. 1989. 

Subpart B—Servicing Business and 

Industry Guaranteed Loans 

§ 4287.107 [Amended] 

■ 4. Section 4287.107(a) is revised to 

read as follows: 

* * * * * 

(a) Lender reports and annual renewal 

fee. The lender must report the 

outstanding principal and interest 

balance on each guaranteed loan 

semiannually using a USDA-approved 

status report or other approved format. 

The lender will transmit the annual 

renewal fee to the Agency 

simultaneously with the December 31 

semiannual status report in accordance 

with 7 CFR part 4279, subpart B, 

§ 4279.107. 

* * * * * 

Dated: September 27, 2005. 

Thomas C. Dorr, 

Under Secretary, Rural Development. 

[FR Doc. 05–19722 Filed 9–30–05; 8:45 am] 

BILLING CODE 3410–XY–P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

9 CFR Part 93 

[Docket No. 02–024–2] 

Stall Reservations at Import 

Quarantine Facilities 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Affirmation of interim rule as 

final rule. 

SUMMARY: We are adopting as a final 

rule, without change, an interim rule 

that amended the regulations regarding 

the importation of horses into the 

United States by requiring persons who 

cancel reservations for stall space at 

import quarantine facilities to notify us 

earlier and by increasing the fee for 

canceling reservations. 

DATES: The interim rule became 

effective on December 9, 2002. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Freeda Isaac, Senior Staff Veterinarian, 

Technical Trade Services, VS, APHIS, 

4700 River Road Unit 39, Riverdale, MD 

20737–1231; (301) 734–8364. 

SUPPLEMENTARY INFORMATION: 

Background 

In an interim rule effective and 

published in the Federal Register on 

December 9, 2002 (67 FR 72827–72830, 

Docket No. 02–024–1), we amended the 

regulations in 9 CFR part 93 regarding 

the importation of horses into the 

United States by requiring persons who 

cancel reservations for stall space at 

import quarantine facilities to notify us 

earlier and by increasing the fee for 

canceling reservations. Under the new 

fee structure, persons who cancel a 

reservation 30 business days or more 

prior to the reservation date will be 

charged 25 percent of the reservation 

fee; persons who cancel a reservation 15 

to 29 business days prior to the 

reservation date will be charged 50 

percent of the reservation fee; and 

persons who cancel a reservation less 

than 15 business days prior to the 

reservation date will forfeit 100 percent 

of the reservation fee. We took that 

action to discourage importers from 

reserving space that they may not use 

and canceling when it is too late for 

others to use the space and to recover 

the fixed cost associated with operating 

quarantine facilities when stall space 

goes unused. This interim rule was 

intended to improve the occupancy rate 

of stall space, and, therefore, the 

efficiency of import quarantine 

facilities. 

Comments on the interim rule were 

required to be received on or before 

February 7, 2003. We received three 

comments by that date. The comments 

were from a horse industry group, a 

transportation association, and a 

transport company. We have carefully 

considered all of the comments we 

received. They are discussed below. 

Note: In the ‘‘Background’’ section of the 

interim rule, we stated that brokers are 

required to have certain diagnostic tests 

performed on their horses and that these tests 

must be processed at National Veterinary 

Services Laboratories (NVSL). Some 

commenters interpreted this statement to 

mean that we were requiring that horses be 

pretested for the diseases dourine, glanders, 

piroplasmosis, and infectious equine anemia 

and that this pretesting be performed at 

NVSL. That perception is incorrect. 

Pretesting is not a requirement but may be 

done at the discretion of the importer or 

agent. If pretesting is done, importers may 

utilize NVSL. the Animal and Plant Health