The Federal Agriculture Improvement and Reform Act of 1996 (1996 Farm Bill) authorized USDA to issue guidelines for the regulation of the commercial transportation of horses and other equines for slaughter by persons regularly engaged in that activity within the United States. The statute gives USDA authority to regulate the commercial transportation of equines to slaughtering facilities, which the statute indicates include assembly points, feedlots, or stockyards. The authority to carry out this statute was delegated to USDA’s Animal and Plant Health Inspection Service (APHIS). Pursuant to this authority, APHIS issued a regulation, “Commercial Transportation of Equines to Slaughter” (transport regulation), in 2001. In 2001, APHIS also established the transport program. This program seeks to ensure that horses being shipped for slaughter are transported safely and humanely. In addition, USDA’s Food Safety Inspection Service (FSIS) carries out the Humane Methods of Slaughter Act and related regulations, which require the humane handling of livestock, including horses, in connection with slaughter. APHIS’s transport regulation establishes a number of requirements that owners/shippers (shippers) must meet for horses transported to slaughter. The regulation states that shippers must (1) provide horses with food, water, and rest for at least 6 hours prior to loading; (2) provide horses adequate floor space in whatever conveyance (e.g., a trailer) is being used; (3) segregate all stallions and other aggressive equines; and (4) ensure that trailers are free of sharp protrusions, are not double-decked, and have adequate ventilation. If a trip is longer than 28 hours, horses must be unloaded and provided at least 6 hours of food, water, and rest before being reloaded. Horses cannot be shipped to slaughter unless they are accompanied by an “Owner/Shipper Certificate—Fitness to Travel to a Slaughter Facility” (owner/shipper certificate) certifying that the horses are fit for travel. The certificate must state that horses are over 6 months of age, are not blind in both eyes, can bear weight on all four limbs, are able to walk unassisted, and are not likely to foal (i.e., give birth) during transport. Figure 1 provides an example of this certificate. Shippers found to be in violation of the transport regulation can face penalties of $5,000 per horse, per violation. As of fall 2007, the last three horse slaughtering facilities in the United States were closed following unsuccessful challenges to state laws banning the practice. According to USDA data, those facilities, two in Texas and one in Illinois, slaughtered almost 105,000 horses in 2006—the last full year of operations—and exported more than 17,000 metric tons of horsemeat, which was valued at about $65 million at that time. Regarding the Texas facilities, in January 2007, the U.S. Court of Appeals for the Fifth Circuit ruled that a 1949 Texas law banning the sale or possession of horsemeat applied to them. They ceased operations in May 2007. Regarding the Illinois facility, the state enacted a law in May 2007 making it illegal to slaughter horses for human consumption. In September 2007, the U.S. Court of Appeals for the Seventh Circuit upheld this slaughter ban, and the Illinois facility ceased operations that month. Since fiscal year 2006, Congress also has taken annual actions in appropriations legislation that have effectively prevented the operation of horse slaughtering facilities in the United States by prohibiting USDA’s use of federal funds to (1) inspect horses being transported for slaughter and (2) inspect horses intended for human consumption at slaughtering facilities. The 1996 Farm Bill authorized the issuance of guidelines for the regulation of the commercial transportation of equines for slaughter as well as the conduct of any inspections considered necessary to determine compliance. The Federal Meat Inspection Act requires inspection of certain animals, including cattle, sheep, swine, goats, and horses, before they are slaughtered and processed into products for human food to ensure that meat and meat products from those animals are unadulterated, wholesome, and properly labeled. However, Congress prohibited USDA from using appropriated funds to pay for these inspections, effective 120 days after enactment of the fiscal year 2006 appropriations legislation on November 10, 2005. Following the prohibitions, the three domestic slaughtering facilities open at that time petitioned USDA to create a voluntary fee-for-service inspection program for horses prior to slaughter, and USDA created such a program in early 2006, allowing required inspections, and, thus, domestic slaughtering, to continue. The congressional prohibition on use of appropriated funds continued in fiscal year 2007, but, as previously discussed, the plants had already been shut down by state law that year. In fiscal year 2008, Congress renewed the prohibition on the use of appropriated funds for inspections on horses being transported to slaughter and at slaughtering facilities, and it added a new prohibition on the use of appropriated funds for implementation or enforcement of the fee-for-service program. These prohibitions were continued in fiscal years 2009 through 2011. These prohibitions notwithstanding, U.S. horses intended for slaughter are still allowed to be transported within the United States under the oversight of USDA’s transport program and exported to slaughtering facilities in Canada and Mexico. In September 2010, USDA’s Office of Inspector General (OIG) reported, in part, on the operations of the transport program. The OIG found that APHIS needs to improve its controls for ensuring that horses being shipped to foreign facilities for slaughter are treated humanely. For example, APHIS does not deny authorization to shippers with a record of inhumanely transporting horses intended for slaughter from shipping other loads of horses, even if unpaid fines are pending for previous violations. The OIG also found deficiencies in how APHIS tags horses that have been inspected and approved for shipment to foreign slaughtering facilities. For example, the agency requires shippers to mark such horses with backtags, which are intended to allow APHIS to trace horses back to their owner and also to verify that horses have passed inspection by an accredited veterinarian. However, APHIS lacked an appropriate control to track individual horses by backtag number on approved shipping documents so that it could perform reconciliations, investigate violations, and initiate enforcement actions, as appropriate. In addition, the OIG noted that APHIS needs to obtain the resources necessary to adequately oversee the transport program and issue in final a proposed rule that would broaden the scope of the agency’s regulation of horses being shipped to foreign slaughtering facilities. In its official response to the OIG report, APHIS concurred with the OIG’s findings and recommendations related to the transport program, and APHIS proposed specific actions and time frames for implementing the recommendations. For example, APHIS agreed to work with USDA’s Office of General Counsel and complete by May 31, 2011, an evaluation of “the best options to revise regulations necessary that will establish an agencywide policy that those who have violated the humane handling regulations and failed to pay the associated penalties shall not receive endorsement of any subsequently requested shipping documents.” The U.S. slaughter horse market has changed since domestic slaughter for food ceased in 2007, particularly in terms of increased exports to Canada and Mexico and lower domestic sales and prices, especially for lower- value horses, according to our analysis of available trade data and horse auction sales data. The number of horses slaughtered in the United States decreased from 1990 (345,900 horses) through 2002 (42,312 horses), according to available data from USDA’s National Agricultural Statistics Service. At the same time, the reported number of slaughtering facilities dropped from at least 16 U.S. facilities that operated in the 1980s to 7 facilities in 1994 to as few as 2 in 2002. Beginning in 2003, however, the number of horses slaughtered began rising through 2006, the last full year of domestic slaughtering operations, when nearly 105,000 horses were slaughtered in the United States. According to USDA officials, this increase can be explained, in part, by the reopening of a horse slaughtering facility in DeKalb, Illinois, in 2004 that increased domestic slaughtering capacity. This facility had been closed for 2 years following a fire set by anti-slaughter arsonists. Because all domestic slaughtering facilities closed by September 2007, however, the number of horses being slaughtered in the United States dropped to zero by the end of that year. Figure 2 shows the changes in the number of horses slaughtered in the United States from 1990 through 2007. Before 2007, horses were slaughtered in domestic slaughtering facilities only when the horsemeat was destined for consumption by humans or zoo animals. Currently, pet food and other products, including glue, may still be obtained from the corpses of horses that are hauled to rendering plants for disposal. The production of these products is not covered by the requirements of the Federal Meat Inspection Act and is therefore not affected by the current ban on the use of appropriated funds for the ante- mortem inspection of horses destined for human consumption. According to a transport program official, USDA is not aware of any domestic facility slaughtering horses for any purpose, including for zoos, as of the end of 2010. USDA identified at least three establishments—in Colorado, Nebraska, and New Jersey—that import horsemeat for repackaging and distribution to purchasers in the United States who feed the meat to animals at zoos and circuses. With the cessation of domestic slaughter, U.S. exports of horses intended for slaughter increased to Canada and Mexico, the current locations of all North American horse slaughtering facilities. As of the end of 2010, Canada had four such facilities, and Mexico three, that were the principal destinations of U.S. horses exported for slaughter.