[Federal Register: August 21, 2001 (Volume 66, Number 162)] [Rules and Regulations] [Page 43963-44003] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr21au01-20] [[Page 43963]] ----------------------------------------------------------------------- Part II Department of Agriculture ----------------------------------------------------------------------- Animal and Plant Health Inspection Service ----------------------------------------------------------------------- 9 CFR Parts 54 and 79 Scrapie in Sheep and Goats; Interstate Movement Restrictions and Indemnity Program; Final Rule [[Page 43964]] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Parts 54 and 79 [Docket No. 97-093-5] RIN 0579-AA90 Scrapie in Sheep and Goats; Interstate Movement Restrictions and Indemnity Program AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: We are amending the regulations for the interstate movement of sheep and goats by requiring certain animal identification for sheep and goats moving interstate, by establishing a list of States that conduct an active State scrapie program that is consistent with Federal requirements, by establishing requirements for moving sheep and goats interstate from those States and from States that do not conduct such programs, by reinstituting an indemnity program for certain sheep and goats affected by scrapie, and by making other associated changes. These changes will help prevent the interstate spread of scrapie, an infectious disease of sheep and goats. DATES: Effective Date: September 20, 2001. Compliance Dates: The compliance date for all requirements to identify animals that are not scrapie-positive animals, suspect animals, high-risk animals, exposed animals, or animals from an infected or source flock is November 19, 2001. The compliance date for all requirements for the identification of commercial whitefaced breeding sheep under 18 months of age and commercial breeding goats is February 18, 2002. FOR FURTHER INFORMATION CONTACT: Dr. Diane Sutton, Senior Staff Veterinarian, National Animal Health Programs Staff, 4700 River Road Unit 43, Riverdale, MD 20737-1235, (301) 734-6954. SUPPLEMENTARY INFORMATION: Background Scrapie is a degenerative and eventually fatal disease affecting the central nervous systems of sheep and goats. It is a member of a class of diseases called transmissible spongiform encephalopathies (TSE's). Its control is complicated because the disease has an extremely long incubation period without clinical signs of disease. To control the spread of scrapie within the United States, the Animal and Plant Health Inspection Service (APHIS), U.S. Department of Agriculture (USDA), administers regulations at 9 CFR part 79, which restrict the interstate movement of certain sheep and goats. APHIS also has regulations at 9 CFR part 54, which describe a voluntary scrapie free flock certification program. On November 30, 1999, we published in the Federal Register (64 FR 66791-66812, Docket No. 97-093-2) a proposal (referred to below as the November 30 proposal) to amend 9 CFR parts 54 and 79. We proposed three significant areas of change: Further restrictions on the interstate movement of sheep and goats from States that do not consider scrapie a reportable disease or do not quarantine infected flocks or source flocks. We also proposed standards describing how a State must conduct a quarantine in order to avoid further restrictions on interstate movement of animals. Additional official identification requirements for sheep and goats moved interstate to allow for a more effective national program for surveillance for scrapie and traceback of scrapie-positive animals. The proposed identification requirements were similar to current requirements for cattle and swine. Reinstatement of a scrapie indemnification program for sheep and goats that owners agree to destroy. As proposed, the owners of destroyed high-risk animals and animals diagnosed as scrapie positive by an approved live-animal test would be eligible for indemnity payments. We solicited comments concerning our proposal for 30 days ending December 30, 1999. We reopened and extended the deadline for comments until January 14, 2000, in a document published in the Federal Register on January 7, 2000 (65 FR 1074, Docket No. 97-093-3). We received 171 comments by that date. They were from State agriculture agencies, sheep and goat industry associations, sheep and goat producers, livestock auction and slaughter companies, and universities and researchers. After receiving comments on the November 30 proposal, we published another proposed rule in the Federal Register on August 15, 2000 (65 FR 49770-49775, Docket No. 97-093-4, referred to below as the August 15 proposal). We solicited comments concerning the August 15 proposal for 30 days ending September 14, 2000. The August 15 proposal to amend 9 CFR part 79 fulfilled a promise made in the November 30 proposal, which stated that before the November 30 proposal was finalized, APHIS would develop and publish for comment a list of States that conduct an active scrapie program that is consistent with Federal requirements and, therefore, qualify as Consistent States. The August 15 proposal listed all 50 States as Consistent States and also proposed certain changes to the criteria by which States may qualify to be designated as Consistent States. The comments received on both the November 30 proposal and the August 15 proposal, and the changes we are making in response to some of them, are discussed below by topic. Definition of Certificate We are making certain changes to the process for issuing certificates for sheep and goats. These changes are discussed later in this document in the discussion of Sec. 79.5, ``Issuance of certificates.'' Because we are moving certain requirements from the definition of certificate in Secs. 54.1 and 79.1 to Sec. 79.5, we are also changing the definition of certificate to read, ``An official document issued in accordance with Sec. 79.5 of this chapter by an APHIS representative, State representative, or accredited veterinarian at the point of origin of an interstate movement of animals.'' Definitions of Exposed Animal and Exposed Flock In the November 30 proposal, we tried to define the term exposed animal in a manner that would include all animals that were exposed to conditions that might result in the animal becoming infected with scrapie. We defined exposed animal in Secs. 54.1 and 79.1 as ``Any animal that has been in the same flock at the same time within the previous 60 months as a scrapie-positive animal, excluding limited contacts. Any animal born in a flock after a scrapie-positive animal was born into that flock, if born before that flock completes the requirements of a flock plan.'' Our proposed definition of flock included ``All animals that are maintained on a single premises and all animals under common ownership or supervision on two or more premises with animal interchange between the premises.'' Several commenters were concerned over the effect of these definitions on shows and sales and asked whether all animals that attended a show or sale where a scrapie-positive animal was in attendance would be considered exposed animals, regardless of their degree of contact with the scrapie-positive animal. That was not our intention, and we have modified the definition of exposed animal to include animals that have exposure to scrapie while at shows or sales without [[Page 43965]] classifying all animals at a show or sale as exposed animals. We have done this by adding to the definition of exposed animal specific means of exposure that could cause a sheep or goat to contract scrapie and by revising the definition of flock to specifically exclude animals at shows and sales. These changes were based on research into the means of scrapie transmission and our knowledge of the manner in which sheep and goats are marketed and shown. We added the following language to the definition of exposed animal: ``Any animal that was commingled with a scrapie-positive female animal during or up to 30 days after she lambed, kidded, or aborted, or while a visible vaginal discharge was present, or that was commingled with any other scrapie-positive female animal for 24 hours or more, including during activities such as shows and sales or while in marketing channels.'' Commenters also suggested that we review the scientific basis for the timeframe requirements in the proposal. We reviewed the assumption that there is a particular timeframe, during which an animal might transmit scrapie, between the time it becomes infected and the time it dies from the disease or shows obvious symptoms and is destroyed. One of the places the proposal used this assumption is the proposed definition of exposed animal, which counted exposure if it occurred ``within the previous 60 months.'' We have reviewed research on this matter. One of the sources relied on for the proposal was Mission Field Trial data. The study monitored 653 sheep and goats that were exposed to the scrapie agent at birth, and 145 sheep and goats that were exposed post-weaning. Results showed that 91 percent of the sheep exposed at birth that died of scrapie died before the age of 54 months and 98 percent died at 67 months or less. For sheep exposed post-weaning 100 percent of those that died of scrapie died at an age of 73 months or more. These data suggest that animals diagnosed with scrapie at an age of 72 months or less were probably exposed at birth, which suggests that their flock of birth should be designated a source flock. Upon reexamining these findings we believe that the assumption that an infected animal has an effective timeframe for developing signs of scrapie for only 60 months, as implied by the proposed definition of exposed animal, is too conservative, since infected sheep might survive longer than this, particularly if the animals are exposed post-weaning. The results of the Mission Field Trial suggest that this timeframe should be removed. Therefore, we have removed this timeframe in the definition of exposed animal. As discussed below, we have changed a similar timeframe in the definition of source flock from 54 months to 72 months to be consistent with the data for animals exposed at birth. Other commenters noted that the November 30 proposal discussed actions that were required for flocks exposed to scrapie, particularly with regard to post-exposure management and monitoring plans, but did not define exposed flock. We agree that such a definition would be useful and have added the following definition of exposed flock to Secs. 54.1 and 79.1: ``Any flock in which a scrapie-positive animal was born or lambed. Any flock that currently contains a female high-risk, exposed, or suspect animal, or that once contained a female high-risk, exposed, or suspect animal that lambed in the flock and from which tissues were not submitted for official testing and found negative. A flock that has completed a post-exposure management and monitoring plan following the exposure will no longer be classified as an exposed flock.'' Definition of Flock Comments on the definition of flock in Secs. 54.1 and 79.1 noted that the proposed definition could be interpreted to consider separate groups of animals to be a single flock when they are temporarily placed on the same premises, even when this does not involve close contact or a significant risk of spreading scrapie. These commenters suggested the definition be revised to note that animals maintained temporarily on a premises for activities such as shows and sales or while in marketing channels are not a flock. We agree, and have made the requested change. One commenter also indicated the definition of flock is overly restrictive in addressing when groups of animals on the same premises can be considered separate flocks. We agree that separate flocks can be kept in close proximity without risk of spreading scrapie if there is a physical barrier between the flocks. We are, therefore, adding the phrase ``or are separated by a solid wall through, over, or under which fluids cannot pass and through which contact cannot occur'' to this part of the definition. Definition of Flock of Origin Several commenters noted that the term flock of origin was used in the November 30 proposal without being defined. For scrapie control purposes, the important consideration for determining the flock of origin is to identify the flock(s) that are likely to harbor or spread scrapie as a result of an infected animal ``originating'' in the flock. In this sense, an infected animal originated in any flock where the animal gave birth, was bred, or was born. For clarity, we are adding a definition of flock of origin to Secs. 54.1 and 79.1, to read as follows: ``The flock in which an animal most recently resided in which it either was born, gave birth, or was used for breeding purposes. The determination of an animal's flock of origin may be based either on the physical presence of the animal in the flock, the presence of official identification on the animal traceable to the flock, the presence of other identification on the animal that is listed on the bill of sale, or other evidence, such as registry records.'' Definition of Infected Flock Several commenters stated that, in addition to designating as infected flocks the flocks of origin of scrapie-positive female animals, we should consider as infected any flock in which a scrapie- positive ewe lambed. We agree, and have changed the definition of infected flock in Secs. 54.1 and 79.1 accordingly. The definition of infected flock has been changed to read: ``The flock of origin of a female animal that a State or APHIS representative has determined to be a scrapie-positive animal; or any flock in which a State or APHIS representative has determined that a scrapie-positive female animal has resided, unless an epidemiologic investigation conducted by a State or APHIS representative shows that the animal did not lamb in the flock. A flock will no longer be considered an infected flock after it has completed the requirements of a flock plan.'' Definition of Limited Contacts One commenter suggested that the proposed definition of limited contacts in Secs. 54.1 and 79.1, intended to define contacts that do not present a significant risk of spreading scrapie, was overly strict and would unnecessarily restrict the way in which animals are shown and transported. The proposed definition stated that a contact was not limited if it occurred within 60 days after lambing or kidding. We have reduced this exclusion to 30 days, since tissues and fluids associated with lambing are unlikely to be prevalent beyond this 30-day period. However, we have also added that the contact is not limited if it is with an animal that has aborted within the past 30 days or that had a vaginal discharge at the time of the contact, since infectious materials from abortions or discharges may [[Page 43966]] contaminate nearby animals. We are changing the text to read ``Limited contacts do not include any contact, incidental or otherwise, with a female animal during or up to 30 days after she lambed, kidded, or aborted or when there is any visible vaginal discharge at the time of the contact.'' Readers interested in this issue should also note that the changes in the definitions of flock and exposed animal reduce the effect of the limited contacts definition on the transport and showing of animals. Some commenters stated that they were confused by the language in the definition of limited contacts that said contact was not limited if it involved ``uninhibited contact while sharing a section of a transport vehicle, or transportation to other flocks for breeding.'' The first restriction on sharing a section of a transport vehicle appears to make the second restriction redundant. For clarity, we have changed the second restriction to ``residing in other flocks for breeding or other purposes.'' Definition of Official Eartag Several comments indicated confusion regarding the relationship of the terms official eartag and premises identification and questioned whether the proposal was consistent with existing national identification standards. We agree that the discussion in the proposal was unclear, and we are clarifying that the National Uniform Eartagging system or a combination of premises and individual animal identification numbers may be used. We have added a definition of official eartag to Sec. 79.1 that reads ``An identification eartag approved by APHIS as being sufficiently tamper-resistant for the intended use and providing unique identification for each animal. An official eartag may conform to the alphanumeric National Uniform Eartagging system or another system approved by APHIS, or it may bear a premises identification number that either contains or is used in conjunction with the producer's livestock production numbering system to provide a unique identification number.'' Definition of Official Identification We used the term official identification in the proposed rule, but commenters noted that it was undefined. We are adding a definition of official identification to Sec. 79.1 for clarity. The definition reads as follows: ``Identification mark or device approved by APHIS for use in the Scrapie Eradication Program. Examples are listed in Sec. 79.2(a)(2).'' Definition of Premises Identification One commenter requested that ear notches that are officially registered be allowed in addition to brands, and another suggested that temporary paint brands (where owners of animals that will be temporarily commingled each mark their own animals with a strips of a particular paint color, to facilitate later separation of the animals) were adequate premises identification for animals that move without changing ownership. We agree and are revising the proposed definition of premises identification in Sec. 79.1 to allow for the use of ear notches. We are changing the definition to read, ``An APHIS approved eartag, backtag, or legible tattoo bearing the premises identification number, consisting of the State postal abbreviation or code followed by a unique alphanumeric number or name, assigned by a State or Federal animal health official to the premises of the flock of origin for the sheep or goats that, in the judgment of the State animal health official or area veterinarian in charge, is epidemiologically distinct from other premises, or a permanent legible brand or ear notch pattern registered with an official brand registry. Premises identification may be used when official individual animal identification is required, if the premises identification method either includes a unique animal number or is used in conjunction with the producer's livestock production numbering system to provide a unique identification number and where, if brands or ear notches are used, the animals are accompanied by an official brand inspection certificate. Clearly visible and/or legible paint brands may be used on animals moving directly to slaughter and on animals moving for grazing or other management purposes without change in ownership.'' Definition of Separate Contemporary Lambing Groups Several commenters suggested that we review other APHIS animal disease eradication programs to improve implementation of the scrapie program. This review showed that cleaning and disinfection for other disease programs are carried out under supervision. We agree that supervision is necessary, and have changed the definition of separate contemporary lambing groups in Secs. 54.1 and 79.1 accordingly, to require supervision of cleaning and disinfection by an APHIS or State representative or an accredited veterinarian, and to require records documenting animal grouping and documenting cleaning and disinfection. We have also clarified the proposed definition, which stated that guidelines for cleaning and disinfection could be found in the Scrapie Flock Certification Program standards. We have moved requirements for cleaning and disinfection from the Scrapie Flock Certification Program standards into Sec. 54.7(e) of the regulations. Guidelines and examples regarding how to apply these requirements may now be found in both the Scrapie Flock Certification Program standards and the Scrapie Eradication Uniform Methods and Rules. Definition of Source Flock Several commenters suggested that the definition of source flock in Secs. 54.1 and 79.1 should be qualified by stating how the determination that an animal was born in a flock should be made. We agree and have changed the definition to state that the determination that an animal was born in a flock will be based on such information as the presence of official identification on the animal traceable to the flock, the presence of other identification on the animal that is listed on the bill of sale, or other evidence, such as registry records, to show that a scrapie-positive animal originated from the flock, combined with the absence of any records indicating that the animal was purchased from outside and added to the flock. One commenter recommended that only official identification be accepted for tracebacks. We disagree, because there are often cases where registry records or bills of sale are adequate for positive identification of an animal, and sometimes these documents are available when official identification is not. Commenters also suggested that DNA comparison be used for positive identification of traced animals. We agree that an owner should be allowed to request verification of a traced animal's identity through DNA comparison, at the owner's expense, when the conditions exist to make such verification possible and reliable. These conditions exist in those cases where DNA has been archived at an approved genotyping laboratory, or if DNA collection and storage are required for breed registration and the breed registration has appropriate safeguards in place to ensure the integrity of the banking process, and when adequate records and identification have been maintained by the owner and the repository. We have changed the definition of source flock accordingly. [[Page 43967]] As discussed above regarding the definition of exposed animal, commenters suggested we reexamine the scientific basis of the timeframes in the proposed rule. The proposal assumed that animals exposed at birth would die by the age of 54 months. We reexamined the data and concluded that it shows that while almost all animals that contract scrapie at birth die at an age of 72 months or less, animals that contract scrapie post-weaning do not die from it until at least the age of 73 months. Weaning normally occurs 80-90 days after birth. Therefore, if an animal is diagnosed with scrapie at an age of 73 months or more, it did not contract scrapie at birth, and its flock of birth should not be considered a source flock based on the diagnosis. Therefore, we have amended the definition of source flock to state that it includes flocks where at least one animal was born that was diagnosed as a scrapie-positive animal at an age of 72 months or less. As amended according to the comments discussed above, the definition of source flock in this final rule now reads as follows: ``A flock in which a State or APHIS representative has determined that at least one animal was born that was diagnosed as a scrapie-positive animal at an age of 72 months or less. The determination that an animal was born in a flock will be based on such information as the presence of official identification on the animal traceable to the flock, the presence of other identification on the animal that is listed on the bill of sale, or other evidence, such as registry records, to show that a scrapie-positive animal was born in the flock. If DNA from the animal was previously collected by an accredited veterinarian and stored at an approved genotyping laboratory, or if DNA collection and storage are required for breed registration and the breed registration has appropriate safeguards in place to ensure the integrity of the banking process, the owner may request verification of the animal's identity based on DNA comparison if adequate records and identification have been maintained by the owner and the repository to show that the archived DNA is that of the animal that has been traced to the flock. The owner will be responsible for all costs for the DNA comparison. A flock will no longer be a source flock after it has completed the requirements of a flock plan.'' Definition of High-Risk Animal Commenters suggested two specific changes to the definition of high-risk animal. The first suggestion was that only sexually intact animals should be considered high-risk, since other animals are extremely unlikely to spread scrapie. The second suggestion was that an animal born into the same flock in which a scrapie-positive animal was born should not be considered high-risk if the animal was born after the flock completes the requirements of a flock plan, designed to remove the risk of spreading scrapie. We agree, and have added language to the definition of high-risk animal in Secs. 54.1 and 79.1 to accomplish these changes. We have also made changes to this definition in response to comments suggesting that the regulations incorporate the most recent scientific research on animal genetics and resistance to scrapie, discussed below. As revised, the definition of high-risk animal reads as follows: ``A sexually intact animal, excluding male sheep that have tested RR at codon 171 and AA at codon 136 using an official genotype test, that is: (1) The progeny of a scrapie-positive dam; or (2) Born in the same flock during the same lambing season as progeny of a scrapie-positive dam, unless the progeny of the scrapie- positive dam are from separate contemporary lambing groups; or (3) Born in the same flock during the same lambing season that a scrapie-positive animal was born, or during any subsequent lambing season, if born before that flock completes the requirements of a flock plan; or (4) An exposed female sheep that has not tested QR, HR, or RR at codon 171 using an official genotype test.'' Definition of Suspect Animal Some commenters indicated that the movement restrictions in proposed Sec. 79.3 were overly complex. In response, we have combined the categories of suspect animal and affected animal into one category. We have done this by adding the following to the definition of suspect animal in Secs. 54.1 and 79.1: ``A sheep or goat that has tested positive for scrapie or for the proteinase resistant protein associated with scrapie on a live-animal screening test or any other test is a suspect animal, unless it is designated a scrapie-positive animal.'' This removes the need to use the term affected animal, which essentially applied to animals that tested positive to a live-animal screening test. In the November 30 proposal, the same movement restrictions applied to suspect animals and affected animals, so this change will not alter movement restrictions. This change reduces the complexity of the rule and removes the need for States to change their regulations to separately address affected animals. It also closes a loophole that would have allowed sheep and goat owners to use unofficial tests without any risk that positive results would result in restrictions on the movement of the animals. Under the new definition, animals that test positive to unofficial tests would be designated suspect animals. This designation may be removed in accordance with Sec. 79.4. New Definitions of Commercial Sheep or Goat, Low-Risk Goat, and Low- Risk Commercial Sheep Several commenters suggested that lesser interstate movement restrictions were appropriate for animals that are raised primarily for production and that are of a breed type or cross that has a low prevalence of scrapie. These commenters suggested that whitefaced animals from commercial flocks in States where scrapie has not been reported in whitefaced animals do not represent a substantial scrapie risk. We agree, and have added two new definitions to Sec. 79.1 that are used in the chart of interstate movement restrictions in Sec. 79.3, commercial sheep or goat and blackfaced sheep. A commercial sheep or goat is any animal from a flock from which animals are moved only either directly to slaughter or through slaughter channels to slaughter or any animal that is raised only for meat or fiber production and that is not registered with a sheep or goat registry or used for exhibition. A blackfaced sheep is any purebred suffolk, hampshire, shropshire or cross thereof, any non-purebred sheep known to have suffolk, hampshire, or shropshire ancestors, and any non-purebred sheep of unknown ancestry with a black face, except commercial hair sheep. We are defining blackfaced sheep in the regulations, rather than whitefaced sheep and whitefaced crossbreeds, because blackfaced sheep are the higher risk category and defining this term makes it easier to address risk in the requirements and exemptions contained in the regulations. Several commenters suggested that we should simplify the chart of interstate movement restrictions in Sec. 79.3 and provide lesser restrictions for certain low-risk goats and commercial sheep. We agree, and have done so by adding definitions of low-risk goat and low-risk commercial sheep and then referring to those defined terms in the chart. We are defining low-risk goat in Sec. 79.1 as a goat that is not a scrapie-positive, suspect, high-risk, or exposed animal, that has not been commingled with sheep, and [[Page 43968]] that meets certain other requirements that indicate the goat has a low risk of spreading scrapie. These other requirements are that the goat must be from: (1) A State in which scrapie has not been identified in a goat during the previous 10 years; (2) A State in which scrapie has been identified in a goat during the previous 10 years, but the scrapie-positive goat was not born in the State and resided in the State for less than 72 months and did not kid while in the State; or, (3) A State in which scrapie has been identified in a goat during the previous 10 years, and the scrapie-positive goat was commingled with sheep, but flock records allowed a complete epidemiologic investigation to be completed and all resulting infected, source, and exposed goat herds have completed flock plans and are in compliance with post-exposure monitoring plans. Similarly, we are defining low-risk commercial sheep in Sec. 79.1 in a manner that excludes blackfaced sheep, animals that are known to be at risk of having scrapie or having been exposed to scrapie, and animals that are not sufficiently identified to determine their flock of origin. We define low-risk commercial sheep as ``Commercial whitefaced, whitefaced cross, or commercial hair sheep from a flock with no known risk factors for scrapie, including any exposure to female blackfaced sheep, that are identified with a permanent brand or earnotch pattern registered with an official brand registry and that are not scrapie-positive, suspect, high-risk, or exposed animals and are not animals from an infected, source, or exposed flock. The term brand includes official brand registry brands on eartags in those States whose brand law or regulation recognizes brands placed on eartags as official brands. Low-risk commercial sheep may only exist in a State where scrapie has not been diagnosed in the previous 10 years in commercial whitefaced, whitefaced cross, or commercial hair sheep that were not commingled with female blackfaced sheep.'' Additional New Definitions We are also adding new definitions for the following terms: commercial hair sheep, ownership brand, official test, official genotype test, approved laboratory, unofficial test, direct movement to slaughter, and flock sire. In order to properly separate risk categories it is necessary to make distinctions between hair sheep and other types of sheep, making it necessary to define commercial hair sheep. We are adding a definition of commercial hair sheep to Sec. 79.1 to read ``Any commercial sheep with hair rather than wool that is either a full- blooded hair sheep or that resulted from the cross of a hair sheep with a whitefaced wool sheep.'' In the proposal ownership brands were not defined. We have added a definition of ownership brand to Sec. 79.1, using the definition commonly accepted in livestock industries: ``A unique permanent brand or earnotch pattern applied to an animal that indicates ownership by a particular person when the brand pattern is registered with a State's official brand recording agency.'' Several commenters recommended that there be greater flexibility in the handling of infected and source flocks. We agree. In order to organize changes to provide greater flexibility it is necessary to define a term that includes all approved tests and that indicates where such tests must be conducted in order to be used for this purpose. We are adding the following definition of official test to Secs. 54.1 and 79.1: ``Any test for the diagnosis of scrapie in a live or dead animal that is approved by the Administrator for that use and conducted either at an approved laboratory or at the National Veterinary Services Laboratories.'' Commenters also stated that if the rule distinguishes the risk level of animals based on their genotype, it should define a means for approving acceptable methods of genotype testing. We agree, and are adding the following definition of official genotype test to Secs. 54.1 and 79.1: ``Any test to determine the genotype of a live or dead animal that is conducted at either an approved laboratory or at the National Veterinary Services Laboratories, when the animal is officially identified and the samples used for the test are collected and shipped to the laboratory by either an accredited veterinarian or a State or APHIS representative.'' We are also adding a complementary definition of approved laboratory to Secs. 54.1 and 79.1: ``A laboratory approved by the Administrator in accordance with Sec. 54.11 to conduct one or more scrapie tests, or genotype tests, on one or more tissues.'' To clearly distinguish official tests from other tests that owners may conduct for their own purposes, we are also adding the following definition of unofficial test to Secs. 54.1 and 79.1: ``Any test for the diagnosis of scrapie or for the detection of the proteinase resistant protein associated with scrapie in a live or dead animal that either has not been approved by the Administrator or that was not conducted at an approved laboratory or at the National Veterinary Services Laboratories.'' One commenter stated that, in some circumstances, the proposal would require that animals be moved directly to slaughter, but did not define what this means. We agree that clarification would be useful, and we have added to Sec. 79.1 a definition of direct movement to slaughter that reads ``Transported to a facility for slaughter, without stops or unloading except for feeding and watering during which the animals are not commingled with any other animals.'' We are also adding to Sec. 54.1 the following definition of flock sire, a type of animal that is eligible for a premium indemnity under the rule: ``A sexually intact male animal that has ever been used for breeding in a flock.'' Destruction by Slaughter of High-Risk, Exposed, and Scrapie-Positive Animals Several commenters indicated that high-risk and exposed animals and animals that test positive to a live-animal screening test should be permitted to move to slaughter because there is no known human health risk from scrapie and Food and Drug Administration ((FDA) regulations provide adequate protection against inclusion of the scrapie agent in ruminant feed. These commenters argued that sending these animals to slaughter is usually more economical and less difficult than arranging other means of disposal. We agree that there is no evidence that scrapie is a human health risk and significant evidence that it is not a human health risk. The World Health Organization recommendation calls for the exclusion of small ruminants showing signs of a TSE from slaughter to address a theoretical risk. In keeping with this recommendation small ruminants with clinical evidence of central nervous system disease are condemned by the Food Safety Inspection Service (FSIS) on ante-mortem inspection. Excluding test-positive animals goes one step farther to exclude the scrapie agent from the food and feed chains. We believe that excluding from slaughter animals that test positive to a live-animal test is warranted to maintain consumer confidence and minimize the risk of the scrapie agent entering the human and animal food chains. We agree with the commenters that most scrapie-exposed and high- risk animals do not, in fact, contain the scrapie agent. Under the proposed rule, high-risk animals would be indemnified but prohibited from going to slaughter [[Page 43969]] while scrapie-exposed animals would not be indemnified and could be slaughtered. Since both types of animals share the same, low risk of spreading scrapie, we have now decided that it is not consistent to keep one set of these animals from slaughter but allow the other set to go to slaughter. Also, owners of non-indemnified scrapie-exposed and high-risk animals can recoup much of the animals' economic value by sending the animals to slaughter, although such animals usually fetch a discounted price from slaughter plants. Keeping these animals from slaughter would also present additional environmental problems related to finding enough landfills and incinerator capacity to deal with the large number of exposed and high-risk animals. Therefore, we are changing the definition of destroyed in Sec. 54.1 to allow indemnified high-risk animals to move to slaughter; however, we continue to prohibit movement to slaughter of animals that test positive to a live- animal test in order to minimize the amount of scrapie agent in the food chain, since these animals are known to contain PrP-sc, which has been linked to the presence of the scrapie agent. We are also making corresponding changes in Sec. 54.7, ``Procedures for destruction of animals,'' to allow indemnified animals (except for scrapie-positive or suspect animals) to move to slaughter, or to a quarantined research facility or another location for destruction, if the movement is approved by APHIS. Note that this change does not affect the FDA regulations that continue to prohibit the inclusion of animal protein derived from mammalian tissues in ruminant feed. We are also amending the definition of destroyed to include movement to a quarantined research facility when such movement is authorized by the Administrator. The scrapie program has always authorized some animals that would otherwise have to be euthanized to be moved for research purposes, and this change to the definition acknowledges that such movements satisfy the regulatory requirement to destroy an animal. Cooperative Agreements and Memoranda of Understanding With States The November 30 proposal did not propose regulatory requirements for cooperative agreements and memoranda of understanding, but it did solicit comments on whether it would be desirable to require States to sign a compliance agreement with APHIS describing State scrapie program operations, cooperative activities with APHIS, and planning and financing details for these activities. Several commenters suggested that the final rule should contain a section authorizing and describing such agreements. We agree, and have added a new Sec. 54.2 describing cooperative agreements and memoranda of understanding for activities under both the Scrapie Eradication Program and the Scrapie Flock Certification Program. Based on suggestions from commenters, this section states that such agreements will describe the respective roles of APHIS and State personnel in implementing the Scrapie Eradication Program and the Scrapie Flock Certification Program. Each agreement may specify the financial, material, and personnel resources to be committed to these programs and other scrapie control measures by APHIS and the State and assign specific activities related to the control of scrapie within a State to APHIS or State personnel. The agreements may also establish schedules for APHIS representatives or State representatives to visit flocks, establish procedures for maintaining and sharing program records, and specify other responsibilities of State representatives and APHIS representatives in support of the Scrapie Eradication Program and the Scrapie Flock Certification Program. Indemnity Values and Application for Indemnity Numerous commenters indicated that the indemnity value set for sheep was too low and should be based on market value. The indemnity payments proposed were $150 for registered animals and $50 for other animals and were significantly lower than the average national sale price of sheep. After evaluating comments on this issue, we agree that an indemnity that approximates fair market value would increase compliance and assist scrapie control. We have considered several methods for establishing market value and have decided to rely, as other indemnity programs have done, on the average sale price information published by the U.S. Department of Agriculture's Agricultural Marketing Service (AMS). The indemnity value will be set weekly by APHIS based on the ewe and lamb market prices reported by AMS and will be posted on the APHIS scrapie web page. We are field testing this market based method by using it to purchase animals for diagnostic purposes. Specifically, we are changing Sec. 54.6, which sets the amounts of indemnity payments, to state that indemnity for sheep will be set based on the following AMS price reports: The weekly weighted average Choice/ Prime slaughter lamb prices at Greeley, CO; the weekly weighted average Utility slaughter ewe prices at San Angelo, TX; the monthly weighted average commercial western ewe lamb replacement price per head; the monthly weighted average commercial western yearling ewe replacement price per head; the monthly weighted average commercial western running age ewe price per head; and the monthly weighted average commercial western aged ewe price per head.. If pricing information is unavailable from these markets during a given week or month, or if the numbers sold are too low to give an accurate market value, the preceding week or month's value will be used. The AMS reports from the most recent week or month prior to the date APHIS first offers to pay an owner indemnity shall be used to calculate the indemnity for that owner's sheep. In contrast to indemnities for sheep, indemnities for goats will be calculated based directly on the value of the goat as indicated by the producer's purchase records and sales records for the preceding 12 to 24 months, not to exceed the maximum indemnity allowed for sheep. We are not establishing a complicated, market price-based formula for calculating indemnities for goats because based on program experience there will be extremely few goats eligible for indemnity. Program experience also suggests that sales and purchase records of goats are a good guide to the fair market value of goats, and it will be cost- effective to calculate the indemnity individually in each case from these records. The amount of indemnities for sheep will be calculated as follows: For sheep under 1 year of age, the indemnity will equal the weekly weighted average Choice/Prime slaughter lamb price per pound times 50 lbs, or times the actual weight, whichever is more. (The default weight of 50 lbs was selected to fairly compensate owners whose sheep were identified as eligible for indemnity while very young, before they achieved significant weight gain.) However, for ewe lambs under 1 year of age, the indemnity will equal the monthly weighted average commercial western ewe lamb replacement price per head, if this price is higher, since ewe lambs might have a greater potential value as breeding animals. For sexually intact sheep 8 years of age or older and castrated animals 1 year of age or older, the basic indemnity shall equal the weekly weighted average Utility slaughter ewe price per pound times 150, based on an average weight of 150 lbs. For mature sexually intact sheep at [[Page 43970]] least 1 year of age and under 2 years of age, the indemnity will equal the greater of the monthly weighted average commercial western yearling ewe replacement price per head, or the weekly weighted average Utility slaughter ewe price per pound times 150, based on an average weight of 150 lbs. For mature sexually intact sheep at least 2 years of age and under 6 years of age, the basic indemnity will equal the greater of the monthly weighted average commercial western running age ewe price per head, or the weekly weighted average Utility slaughter ewe price per pound times 150, based on an average weight of 150 lbs. For mature sexually intact sheep at least 6 years of age and under 8 years of age, the basic indemnity will equal the greater of the monthly weighted average commercial western aged ewe price per head, or the weekly weighted average weekly Utility slaughter ewe price per pound times 150, based on an average weight of 150 lbs. If records and identification are inadequate to determine the actual age of animals, an APHIS or State representative will count all sexually intact animals that are apparently under 1 year of age, and those that are apparently at least 1 and under 2 years of age, based on examination of their teeth, and the indemnity for these animals will be calculated. The total number of these animals will be subtracted from the total number of sexually intact animals in the group to be indemnified, and indemnity for the remainder will be calculated based on the assumption that the remainder of the flock is 80 percent aged 2 to 6 years and 20 percent aged 6 to 8 years. This assumed age distribution reflects the fact that animals tend to die or be culled as they get older. Most ewes in commercial flocks are eliminated between 6 to 8 years of age. As many commenters requested, we will increase the indemnity amounts for registered animals to partially compensate owners for the greater value of these animals. We will add a premium to the basic indemnity for each registered animal equal to $100 for each registered animal under 1 year of age, $200 for each registered animal at least 1 year of age and under 4 years of age, and $100 for each registered animal at least 4 years of age and under 8 years of age. In addition to this, we will add a premium of $50 to the indemnity for each flock sire. Also, any animal that is not registered at the time indemnity is first offered, but is eligible to be registered, will receive the registered animal premium reduced by $50. The owner must provide adequate records to qualify for these premiums. As a result of the change in the definition of destroyed to allow high-risk animals eligible for indemnity to be destroyed by slaughter, it was necessary to address the effect of moneys received from slaughter plants on the amount of indemnity received by owners of animals disposed of by being sent to slaughter. We are changing Sec. 54.6 to provide that, for animals destroyed by slaughter, the owner will retain the salvage value (the amount paid by a slaughter plant for the animal) of animals. If the salvage value, less shipping costs, is less than the slaughter price used to calculate indemnity, APHIS will pay the owner the difference. APHIS will also indemnify the owner in the amount of any productivity, registered animal, or flock sire premiums for which the animal qualifies. We anticipate that owners will wish to have recourse if they believe that the average weights used to calculate indemnities do not fairly represent the weights of animals in their flock. We have revised Sec. 54.6 to allow an owner who disagrees with the average weight estimate to have the sheep weighed at a public scale at his own expense (the usual average weighing fee is less than $1 per animal, though there will be additional expense if the owner must transport them to be weighed). In such a case, the owner will be paid based on the actual weight times the AMS weekly average price. We have also clarified that indemnity will be paid to an owner only for animals actually in a flock at the time indemnity is first offered. Animals removed from the flock as part of a post-exposure management and monitoring plan will be paid indemnity based on the AMS average prices at the time an APHIS representative designates the animals for removal. We received several comments concerning Sec. 54.4, the section describing how to submit an application for indemnity. One comment noted that the proposal stated that normally a State or APHIS representative would initiate the application for a flock that is already under a State quarantine. This comment stated that some States do not actually call the movement restrictions they place on flocks a ``quarantine,'' and the regulations should not use this term here to avoid confusion. We agree, and have changed ``State quarantine'' to ``State movement restrictions.'' In such cases, the flock owner will confirm information about the flock's eligibility for indemnity that is contained in the application submitted by the APHIS or State representative. Another comment noted that under the proposal, flock owners could choose to apply directly for indemnity, rather than having a State or APHIS representative make the application, in all cases, except for flocks that were under State quarantines (movement restrictions). The commenter did not see the purpose of excluding flocks under State movement restrictions from applying directly for indemnity. Neither do we, and we have removed this restriction. Another commenter noted that proposed Sec. 54.4(a)(5) required registration papers for any registered animals in a flock to accompany the application for indemnity. This commenter stated that the language did not make it clear that owners may apply for indemnity for unregistered animals without registration papers. To clarify this, we have added the phrase ``registration papers are not required for the payment of indemnity for animals that are not registered'' to this paragraph. Certification by Owners Receiving Indemnity Proposed Sec. 54.5 required owners receiving indemnity to sign an agreement with APHIS certifying that the owner would cooperate with certain conditions. One of these conditions was to allow an APHIS representative, upon request, to review bills of sale and other records of the flock. One commenter suggested that this agreement should also allow State representatives to review these records. We agree, and have made that change. The proposed agreement would also require flock owners that maintain a flock after receiving indemnity to maintain that flock under a post-exposure management and monitoring plan. One commenter suggested that the agreement should specify how long the flock would have to be subject to the post-exposure management and monitoring plan. We agree, and have added ``for 5 years'' to this requirement. Five years of monitoring is consistent with normal epidemiological practice and guidance in the Scrapie Flock Certification Program standards. We have also added to the agreement, based on another comment, that the owner must allow any animal for which indemnity is paid to be removed to a U.S. Department of Agriculture facility or a quarantined research facility, slaughtered, or euthanized and necropsied and tissues removed for diagnostic or other purposes. This change will ensure that APHIS has access to animals when they are needed [[Page 43971]] for testing to further our knowledge of scrapie transmission patterns. Identification of Sheep and Goats in Interstate Commerce Several commenters suggested changes to proposed Sec. 79.2(a)(1), which specified where and when identification should be attached to animals that must be identified under the regulations. The proposal stated that animals must be identified at whichever of the following occurs first: The point of first commingling of the sheep or goats in interstate commerce with sheep or goats from any other source; upon unloading of the sheep or goats in interstate commerce at any livestock market; upon transfer of ownership of the sheep or goats in interstate commerce; or upon arrival of the sheep or goats in interstate commerce at their final destination. Some commenters stated that animals should always be identified before being moved from their flock of origin, rather than at any later stage of movement, because this would minimize chances for errors in identification and would eliminate the need for markets, slaughter plants, or other businesses to apply identification. We agree in part and have changed the wording in Sec. 79.2(a)(1) to require the owner of the flock of origin or his agent to identify the animals. This does not preclude the owner of the flock of origin from contracting with a livestock market, slaughter plant, or other person to act as his agent for the purpose of applying official identification at the first point in movement where official identification is required. In response to comments suggesting that animals be identified to their flock of birth, not just their flock of origin, we are requiring identification to the flock of birth for animals born after January 1, 2002. The delay in this requirement's effective date will give owners an opportunity to prepare for the new requirement. To further mitigate the impact on owners and markets, we are allowing animals moving interstate directly to slaughter to move without flock-of-birth identification until June 1, 2003. We have also amended Sec. 79.2(a)(1) to note the fact that the regulations, in Sec. 79.6(a)(10)(i), allow Consistent States to exempt certain low-risk animals in intrastate commerce from being identified to their flock of origin or birth. It would be impractical and unnecessary to require that these animals be identified to their flock of origin or birth in order to move interstate, so we have amended our identification requirements for animals in interstate commerce to state that animals that Consistent States have exempted from flock of origin identification in intrastate commerce in accordance with Sec. 79.6(a)(10)(i) may be moved interstate with only individual animal identification traceable to the State of origin and to the owner of the animals. We have also clarified that if an owner fails to arrange required official identification for his animals, other persons engaged in moving those animals (shippers, markets, slaughter plants, etc.) may not move the animals unless the required identification is accomplished. It would have undesirable effects on compliance with the regulations if other persons engaging in interstate commerce were free to move animals that an owner failed to identify. In some cases, this requirement may result in shippers, markets, or other parties applying official identification to animals, using information from owners statements or bills of sale, in order to legally move the animals in interstate commerce. Commenters also suggested that identification requirements be kept to a minimum. In response to this we have identified one case where the proposed identification requirement appears to be unnecessary. The proposal required individual identification of animals whose final destination was a slaughter plant. The proposal also allowed those animals to be moved interstate without such identification if it was applied after the animals arrived at the slaughter plant. Since individual identification would be required at slaughter plants primarily to allow APHIS to conduct slaughter sampling and trace back positive animals, we believe that this identification would serve no purpose on those days when APHIS does not conduct slaughter sampling at a plant, and we have removed this individual identification requirement in such cases. A commenter noted that the requirements for Consistent State status mean that States will require identification even when animals change ownership within a State. The commenter also noted that the State requirement would facilitate identifying animals moving interstate under the Federal regulations. We agree. No change is necessary in response to this comment since Sec. 79.2(a)(1)(iv) requires identification ``upon transfer of ownership of the sheep or goats in interstate commerce.'' In accordance with the above comments, we have revised Sec. 79.2(a)(1) to read as follows: (1) The sheep or goat must be identified to its flock of origin and, for an animal born after January 1, 2002, to its flock of birth, by the owner of the flock or his or her agent; at whichever of the following points in commerce comes first, Except that; animals born after January 1, 2002, may be moved interstate direct to slaughter without identification to flock of birth until June 1, 2003, and animals that cannot be identified to their flock of origin because Consistent States have exempted them from flock of origin identification in intrastate commerce in accordance with Sec. 79.6(a)(10)(i) may be moved interstate with only individual animal identification traceable to the State of origin and to the owner of the animals at the time they were so identified: (i) The point of first commingling of the sheep or goats in interstate commerce with sheep or goats from any other flock of origin; (ii) Upon unloading of the sheep or goats in interstate commerce at any livestock market, except a market described in paragraph (a)(1)(iii) of this section; (iii) Upon leaving a livestock market that has been approved in accordance with this chapter to handle sheep and goats in interstate commerce and that has agreed to act as an agent for the owner to apply official identification to the animals. In such cases the animals must be: (A) Moved to the market and maintained until officially identified in distinguishable groups identifiable to their flocks of origin and when required their flock of birth by means of partitions or other such maintenance; and, (B) Accompanied by an owner statement that contains the information needed to officially identify the animals to their flock of origin and, when required, their flock of birth; (iv) Upon transfer of ownership of the sheep or goats in interstate commerce; (v) In the case of animals shipped directly to slaughter at a slaughter plant that has agreed to act as an agent for the owner to apply official identification to the animals, upon arrival of the sheep or goats in interstate commerce at the slaughter plant. In such cases the animals must be: (A) Moved to the slaughter plant and maintained until officially identified in distinguishable groups identifiable to their flocks of origin and when required their flock of birth by means of partitions or other such maintenance; and, (B) Accompanied by an owner statement that contains the information needed to officially identify the animals to their flock of origin and, when required, their flock of birth. If the slaughter plant has agreed to allow APHIS to conduct slaughter sampling, animals need not be identified if they arrive at the plant on days that an APHIS designated sampler is not available at the plant to collect samples; or (vi) Prior to moving a sheep or goat across a State line, unless the animals are moving to an approved livestock market in accordance with (a)(1)(iii) of this section or to an approved slaughter plant in accordance with (a)(1)(v) of this section. Numerous commenters requested that we acknowledge that some forms of premises identification could satisfy the [[Page 43972]] proposed requirement for identification of animals moving interstate. It is in some cases less expensive and troublesome for owners and persons selling and buying animals to apply premises identifications to the animals, and to maintain records indicating which premises animals came from, than to maintain records of a unique identifying number for each animal when a group of animals is moved interstate. We agree that we can make some changes to the individual animal identification requirements in proposed Sec. 79.2 to make the process less burdensome. However, the identification must be sufficient to allow traceback of individual animals at any point in interstate commerce or else the disease control purpose of the identification suffers. To address the concerns of commenters to the extent possible, we are adding provisions to Sec. 79.2 that will allow interstate movement of animals marked with a premises identification eartag or backtag that bears a unique number associated with the animal to which the tag is applied. Eartags approved for use in the Scrapie Flock Certification Program (SFCP) are already approved for this use, and other eartags and backtags may be approved by APHIS. Specifically, we are changing Sec. 79.2(a)(2), which identifies acceptable means of identification, by revising paragraphs (ii) and (iii), which refer to eartags and backtags, respectively. Paragraph (ii) in the proposal read: ``Official eartags, including tags approved for use in the SFCP, when used on any sheep or goat.'' We are changing paragraph (ii) to read: ``Official eartags, including tags approved for use in the SFCP or APHIS-approved premises identification number eartags when combined with a unique animal identification number.'' Paragraph (iii) in the proposal read: ``United States Department of Agriculture backtags, when used on sheep or goats moving to slaughter.'' We are changing paragraph (iii) to read: ``United States Department of Agriculture backtags or official premises identification backtags that include a unique animal identification number, when used on sheep or goats moving directly to slaughter and when applied within 3 inches of the poll on the dorsal surface of the head or neck.'' This change is based on comments that suggested that premises backtags that include a unique animal identification number are suitable for individual animal identification, and that suggested a standard location on the head or neck to make it easy to collect the tag at slaughter. Comments on proposed Sec. 79.2(b), which dealt with how serial numbers and other codes for official identification would be issued, suggested that APHIS provide more detail on how these codes would be assigned by USDA to State officials and other intermediaries who could ultimately assign them for use by particular flocks. These comments suggested that it would be efficient to allow various animal health personnel, such as 4-H leaders, to be assigned blocks of codes that they could reassign to flocks. The comments stated that this means of assigning codes would be convenient for flock owners and would be reliable as long as USDA had initial control of the code assignments and subsequent assignments were identified to the premises on which the codes are used in a USDA database. We agree, and have added the following language to Sec. 79.2(b): ``The official responsible for issuing eartags in a State may assign serial numbers of official eartags to other responsible persons, such as 4-H leaders, if the State animal health official and the area veterinarian in charge agree that such assignments will improve scrapie control and eradication within the State. Persons assigned serial numbers may either directly apply eartags to animals, or may reassign eartag numbers to producers. If these persons reassign eartag numbers, they must maintain appropriate records that permit traceback of animals to their flock of origin, or flock of birth when required. Premises identification eartag, backtag, and tattoo numbers (series of alphanumeric USDA tags and backtags may be assigned as premises identification if they are linked to the premises in the National Scrapie Database) will be assigned to animal owners by the State animal health official or the area veterinarian in charge, whoever is responsible for assigning premises codes in that State.'' Proposed Sec. 79.2(c) provided that, when animals move interstate, the buyers, sellers, and transporters would all have to keep records containing all serial numbers and other approved means of identification appearing on each sheep or goat. In this final rule, these requirements have been changed and moved to Sec. 79.2(d). This paragraph now provides that, when the animals are identified to the premises of the flock of origin, the records will have to show the premises identification, which will be the same for all animals from a premises, rather than the unique identification number associated with each animal. The eartag or backtag on each animal will have a unique identification number, which APHIS can use, if necessary, in combination with the flock owner's records to conduct an epidemiologic investigation. We have also amended Sec. 79.5, ``Issuance of Certificates,'' to note that for movements where premises identification instead of individual animal identification is allowed, the certificate will record the premises identification number rather than individual animal identification numbers. Chart of General Restrictions Comments have led us to substantially revise the chart in Sec. 79.3, which contains restrictions and identification requirements for sheep and goats moved interstate. Many commenters suggested that the chart in this section should take more note of the fact that sexually intact female animals present an inherently higher risk of spreading scrapie than neutered animals, since lambing and kidding have been identified as chief opportunities for the spread of scrapie. When consolidated, these comments suggested that the chart should be organized to provide different levels of identification and restriction for six different groups of animals. The six groups represent six different risk levels for spreading scrapie, ranging from high risk to low risk. The groups are as follows, beginning with the highest risk group: Scrapie-positive, suspect, or high-risk animals. Animals from an infected or source flock that are not scrapie-positive, suspect, or high-risk animals. Exposed female animals that are sexually intact and are not scrapie-positive, suspect, or high-risk animals or from an infected or source flock. Sexually intact female animals that are not scrapie- positive, suspect, high-risk, or exposed animals or animals from an infected or source flock. Commercial whitefaced sheep, commercial hair sheep, and commercial goats when they are in low-risk flocks. Castrated or spayed animals that are not scrapie-positive or suspect animals and are not from an infected or source flock. We have reorganized the chart based on these major groups of animals, although the chart actually establishes more categories using risk-based subdivisions of these groups. The restrictions and identification requirements this final rule requires for the various categories of animals are similar to the requirements in the chart [[Page 43973]] in the proposal, and range from prohibition of movement for the first group through no requirements for some members of the last group. Like the chart in the proposed rule, the chart in this final rule distinguishes the level of restriction and identification required based on whether an animal is being moved to slaughter, to be bred, to be displayed at a show, or for other reasons. As commenters pointed out, it is necessary to preserve these distinctions because each type of movement presents different opportunities for animals to spread or contract scrapie, and therefore different levels of risk. Many commenters also suggested that the identification requirements for lambs moved to slaughter be relaxed. The proposal required that lambs moved to slaughter be individually identified if they were over 6 months of age. Some commenters presented economic arguments that it was simply too expensive and difficult for large production flocks to individually identify hundreds or thousands of lambs in order to move them to slaughter. Other commenters presented arguments based on the age at which scrapie can be first diagnosed. Both types of comments urged that individual animal identification for animals moving to slaughter should not be required until animals reach sexual maturity. The age at which commenters suggested lambs should be identified ranged from 9 to 18 months. APHIS agrees that age and sexual maturity are important benchmarks that can be used to divide animals into different groups characterized by different risk levels for scrapie transmission or differing suitability for diagnosis of the disease. We have revised the chart to take this into account. The chart contains lesser restrictions for animals under 18 months of age and greater restrictions for animals over that age. The more severe restrictions will also apply to animals that have lambed or kidded, even if they did so at less than 18 months of age. Specifically, the dividing line in the chart will impose greater restrictions on an animal that has lambed or kidded, or that is over 18 months of age, as evidenced by eruption of the second incisor. One commenter recommended that identification not be required for animals under 14 months of age, whether they are from Consistent or Inconsistent States, when the animals are in slaughter channels or have been castrated. We agree in part and have removed the identification requirement for castrated animals under 18 months of age and for sexually intact animals that are under 18 months of age when they are moved directly to slaughter or to a terminal feedlot from an Inconsistent State. No identification is required for castrated or sexually intact animals under 18 months of age in slaughter channels when they are moved from a Consistent State. Some commenters wanted the identification and permitting requirements for high-risk animals relaxed. APHIS believes that it is critical to maintain control of these animals through slaughter to ensure that they do not return to the farm. No changes were made based on these comments. Based on comments that movement restrictions should use newly- developed genetic tests as a tool, we have added genetic testing as a requirement for the movement of sexually intact exposed animals that are moved for breeding, show, grazing, or other purposes. We have added a requirement to Sec. 79.3(a)(3) and (d)(3) that for female sheep in these classes, the results of an official genotype test showing QR or RR at codon 171 must be included on or attached to the permit that is required to move these animals. Several other changes to the chart in Sec. 79.3 are discussed below, in context with the comments which brought them about. These comments addressed movement restrictions for goats, methods for issuing certificates and the statements certificates should contain, and other issues. Proposed List of Consistent States In the August 15 proposal we stated that the Administrator had evaluated the qualifications of States in accordance with the standards for Consistent States proposed in the November 30 proposal. The Administrator evaluated State statutes, regulations, and directives pertaining to animal health activities, reports, and publications of State animal health agencies, and a written statement from each State animal health agency describing State scrapie control activities. The August 15 proposal announced that all 50 States had submitted written statements indicating their willingness to comply with the proposed requirements and provided copies of their regulatory authority to carry out these actions. The August 15 proposal also proposed certain changes to the standards that a State would have to meet to qualify as a Consistent State and announced that, based on the Administrator's evaluation of all State submissions and other information and reports describing scrapie quarantine and control activities in the States, the Administrator had determined that all 50 States meet the proposed standards for Consistent State status. One of the standards for Consistent State status, in Sec. 79.6(a)(3) of this final rule is that each State must sign a memorandum of understanding (MOU) between APHIS and the State that delineates the respective roles of each in National Scrapie Program implementation. Prior to the August 15 proposal, all States signed letters of intent to draft and sign an MOU with APHIS. The designation of all 50 States as Consistent States is contingent on the State actually signing the MOU. To date, not all States have signed such an MOU. If any States have not signed the necessary MOU by the effective date of this final rule, APHIS will publish another final rule in the Federal Register changing the status of those States to Inconsistent. We received eight comments on the proposal to list all 50 States as Consistent States under the revised standards contained in the August 15 proposal. All of these comments supported the revised qualification standards and supported designating all 50 States as Consistent States, although some suggested associated changes to the regulations. Therefore, this final rule designates all 50 States as Consistent States contingent upon the signing of the MOU and finalizes the standards for Consistent State status that were proposed in the August 15 proposal. One commenter on the August 15 proposal stated that there should be procedures in the regulations for APHIS to work with individual producers to allow interstate movement of animals, so that producers ``doing a good job'' are not penalized due to problems in another part of the State. We are not making any change in response to this comment because we believe the problem is addressed by the lighter restrictions on interstate movements from Consistent States in Sec. 79.3, as well as by the provision in Sec. 79.6(a)(10)(i)(A) that allows Consistent States to exempt from identification commercial whitefaced sheep under 18 months of age moving in intrastate commerce if the State has had no case of scrapie in commercial whitefaced sheep and no commercial whitefaced flocks in the State have been exposed by a female animal. We consider it impractical and overly expensive for both APHIS and States to apply this exemption on a basis smaller than Statewide, or to develop unique movement requirements for individual flocks. Also, flock owners would be subject to the most burdensome, Statewide restrictions only in Inconsistent States, but this rule [[Page 43974]] establishes all States as Consistent States, at least for now, if they sign the appropriate MOU. Several commenters on the August 15 proposal said that APHIS should clearly state that entering data in the Generic Database is an acceptable alternative to entering data in the National Scrapie Database and would minimize the burden and costs to States. We agree; in fact, the National Scrapie Database is in fact a subset of the Generic Database, and States already entering the required scrapie data in the Generic Database will not have to reenter it. APHIS will continue to work cooperatively with States to minimize the data entry burden for scrapie and other animal health databases. To clarify this point, we have also added to Secs. 54.1 and 79.1 a definition of National Scrapie Database to read ``A database designated by the Administrator in which APHIS and State animal health agencies cooperatively enter data concerning scrapie outbreaks, flocks and premises affected by scrapie, individual animal identification and premises identification data, and other data to support the Scrapie Eradication Program and the Scrapie Flock Certification Program.'' One commenter on the August 15 proposal said that APHIS should define ``commercial goats'' to clarify which goats must comply with identification requirements and which are exempted. The same commenter suggested that we define ``slaughter channels'' to include private sales of kids to individuals for slaughter. We agree, and as discussed above, we have added a definition of commercial sheep or goat to Sec. 79.1. We are also adding to both Secs. 54.1 and 79.1 a definition of slaughter channels to read as follows: ``Animals in slaughter channels include any animal that is sold, transferred, or moved either (1) directly to a slaughter facility, (2) to an individual for custom slaughter, or (3) for feeding for the express purpose of improving the animals' condition for movement to slaughter. Any sexually intact animal that is commingled with breeding animals or that has been bred is not in slaughter channels. When selling animals for slaughter, owners should note on the bill of sale that the animals are sold only for slaughter.'' One commenter on the August 15 proposal requested that APHIS exempt animals that are removed from feedlots for breeding purposes from the requirement that animals not in slaughter channels be traceable to premises of birth. The commenters stated that changing economic conditions often makes this necessary and maintained that such animals need to be traced back only to the feedlot for program purposes. We disagree. Tracing animals to a feedlot is of little epidemiologic value unless the feedlot maintains records that would allow the animals to be traced back to their flocks of origin. Currently this is not the case, and we do not believe imposing such a recordkeeping burden would be warranted at this time. The primary purpose of traceback is to locate infected breeding flocks, not to locate feedlots where animals have temporary residence. Several commenters on the August 15 proposal suggested that APHIS should begin now to enhance the education and training of producers and accredited veterinarians. We agree and are engaged in activities to support education and training regarding scrapie control. In addition to projects by APHIS public information offices, we are cooperating on projects with the American Sheep Institute and the National Institute of Animal Agriculture. One commenter on the August 15 proposal stated that APHIS should develop the Uniform Methods and Rules (UM&R) with full coordination of all segments of industry and the pertinent advisory committees. We agree, and the final rule states that APHIS will consult with Consistent States and provide an opportunity for industry and public review of the UM&R. We also intend to provide the United States Animal Health Association and the public with the opportunity to review the UM&R in draft form. In regard to this review, it should be noted that the legal requirements for the interstate movement of sheep and goats due to scrapie are contained in 9 CFR parts 54 and 79. The UM&R provides additional guidance to the States regarding the minimum standards necessary for States to participate in the National Scrapie Eradication Program. The UM&R also provides examples of how to comply with those requirements. One commenter on the August 15 proposal stated that the language concerning the Paperwork Reduction Act in the proposed rule, stating that there were ``no new impacts'' associated with the rule, was inaccurate because livestock markets in particular will have to keep many new records. The paperwork statement was accurate for the particular rule in which it appeared, i.e., the proposal to list 50 States as Consistent States. That proposal added no new records or forms not already addressed in the earlier November 30 proposed rule. Please refer to the Paperwork Reduction Act section of this final rule to see final analysis of the paperwork issues raised in the November 30 proposed rule. One commenter on the August 15 proposal stated that since the risk of a positive ram transmitting scrapie is effectively zero, the program should take no regulatory action against a flock based on the presence of an infected ram that was purchased from another flock. We agree, and the revised definitions of exposed animal and exposed flock discussed above require the exposure to be to a scrapie-positive female animal, not a ram. On the same basis, to update classifications made under earlier versions of the regulations, Sec. 79.4(b)(8) of the final rule allows an exposed animal to be reclassified if the exposure was only by an infected ram, outside of lambing and breeding situations. This final rule primarily regulates rams by requiring that they be individually identified in certain circumstances. This requirement does not reflect a belief that rams may directly spread scrapie, but rather it exists to allow scrapie-positive rams to be traced back to their flocks of origin or birth, as required, so that the necessary regulatory requirements may be imposed on those flocks. Comments on Goats Several commenters requested that goats be exempted from part or all of the regulations due to the low incidence of scrapie in goats. We have made the following changes in response to these comments. Since there is no immediate intent to collect diagnostic specimens from goats at slaughter, we have removed the requirement from Sec. 79.3(b) to identify goats in slaughter channels, except for goats that have been exposed to scrapie. In Sec. 79.3(a) we have exempted commercial goats that are not in contact with sheep from identification requirements if they originate in a State that has not had a case of scrapie in goats. We have allowed Consistent States that have had no cases of scrapie in goat flocks to exempt commercial goats from identification while in intrastate movement. We have partially removed the requirement that breeding goats moving interstate from Inconsistent States must originate from a SFCP flock. In this final rule, such goats must originate from a SFCP flock only if they have commingled with sheep, or are from a State that has had scrapie diagnosed in goats that were not commingled with sheep. [[Page 43975]] Comments on Genetics and Testing A few commenters recommended that animals that have an R at codon 171 should be exempted from the regulations because of their resistance to scrapie. APHIS disagrees with exempting all animals with an R at codon 171 from all regulation, for the following reasons. While Suffolk sheep with an R at codon 171 are documented in the literature to be more resistant to clinical scrapie than Suffolks that are QQ at codon 171, there have been several reports of sheep that are QR and one report of a sheep that is RR at codon 171 that were diagnosed with scrapie. Also, there has been inadequate work done with other breeds to know if or to what degree an R at codon 171 increases resistance in these sheep. It is also unknown whether a carrier state exists in sheep that are RR or QR at codon 171. However, we believe it is appropriate to classify highly exposed male sheep that are RR at codon 171 and AA at codon 136 as exposed, rather than high risk, since the lower risk from a male sheep combined with the lower genetic susceptibility associated with this genome lowers the risk of spread to a range similar to or less than that of other exposed animals. Likewise, exposed female sheep that are QQ at codon 171 are more susceptible and therefore of higher risk than other exposed animals and so have been included in the definition of high risk animals. APHIS is supporting further research with the U.S. Department of Agriculture's Agricultural Research Service to assess the utility of genotyping for regulatory purposes and will propose adjustments to the regulations as appropriate based on the results. Several commenters urged the approval of the third eyelid test and also asked that we specify how tests would be approved by the Administrator. We are in the final steps of evaluating the third eyelid test. We have included new Secs. 54.10 and 54.11 describing how APHIS will approve tests and laboratories in response to this comment. Essentially, the Administrator will approve new scrapie tests for live or dead animals after evaluating the test protocols and study data regarding each test's methodology, sensitivity, specificity, and reproducibility. The Administrator will approve laboratories after evaluating them using the same type of standards used to evaluate other laboratories authorized to conduct official tests under APHIS regulations. These are well-established standards for evaluating the methodology, personnel, and quality control procedures of diagnostic laboratories. For examples of current APHIS regulations for approval of laboratories, see the equine infectious anemia regulations at Sec. 75.4(c), pseudorabies regulations at Sec. 85.1, and contagious equine metritis regulations at Sec. 93.301(i). Several commenters have objected to references to a live-animal test that has not been approved yet. We believe that the third eyelid test will be validated by the time this regulation is finalized and will be approved by the Administrator soon thereafter. The references to live-animal tests in this final rule will then aid the speedy and orderly introduction of the test. Identifying an Animal's Premises of Birth Several commenters recommended that breeding animals be marked with flock of birth identification. We agree that this is an ideal method to allow complete traceback of animals and encourage its use; however, we are allowing other forms of identification on breeding sheep since birth premises identification is impractical in some circumstances, such as for sheep that no longer reside in their flock of birth or that lose tags after leaving the flock of birth. We have added a requirement to the general movement restrictions in Sec. 79.3(a)(3) and (a)(4) and to the conditions for issuing certificates in Sec. 79.5(a) that, for breeding sheep born after January 1, 2002, the flock of birth must be indicated on any health certificate issued for those sheep. This requirement will make it possible to trace these animals to their flock of birth. Also, as discussed in the August 15 proposal, we have added a requirement to the Consistent State qualification requirements at Sec. 79.6(a)(10)(i), requiring official identification, upon change of ownership, of all animals of any age not in slaughter channels and any sheep over 18 months of age. This requirement will help us trace animals back to their flock of birth in Consistent States. Consistent States must meet this identification requirement within 2 years of their designation as Consistent. When Consistent States impose this identification requirement for intrastate movements, it will substantially increase our ability to trace animals back to their flock of birth. Publication of Lists of Infected Flocks, Source Flocks, and Flocks Participating in the SFCP In the past, APHIS has published and has made available through the Internet lists of all known infected flocks, source flocks, and flocks participating in the Scrapie Flock Certification Program. APHIS intends to continue publishing a list of participating flocks, which is available by writing to us or at URL http://www.aphis.usda.gov/vs/ scrapie. We have amended Sec. 54.21 to state that a list of noncompliant flocks (defined below) will also be developed and published at that address. However, we do not intend to continue publishing lists of infected and source flocks. Several commenters supported publishing lists of all infected and source flocks, regardless of whether or not they participate in the SFCP. We have modified the rule to address this concern by requiring the scrapie status to be indicated on all certificates of animals moving for breeding or show purposes, discussed below under ``Comments on Issuance of Certificates,'' and by defining noncompliant flock in Secs. 54.1 and 79.1 as ``(1) Any source or infected flock whose owner declines to enter into a flock plan or post-exposure management and monitoring plan agreement within 30 days of notification, or whose owner is not in compliance with either agreement; (2) any exposed flock whose owner fails to make animals available for testing within 60 days of notification, or as mutually agreed, or whose owner fails to submit required postmortem samples; (3) any flock whose owner or manager has misrepresented, or who employs a person who has misrepresented, the scrapie status of an animal or any other information on a certificate, permit, owner statement or other official document within the last 5 years; or (4) any flock whose owner or manager has moved, or who employs a person who has moved, an animal in violation of this part within the last 5 years.'' Publishing a list of noncompliant flocks, rather than lists of infected and source flocks, will protect the privacy of flock owners who comply with the regulations while listing those who do not and, therefore, present a risk of spreading scrapie. Commenters also suggested we take steps to improve our ability to enforce the requirements of flock plans by taking action against persons who violate them. To accomplish this, we are slightly changing the definition of flock plan to require that a flock plan must be signed by the flock owner and by the accredited veterinarian, if any, employed by the flock owner. We believe signatures are desirable to document that participants in a flock plan have committed to follow its requirements, particularly now that nonperformance could cause a flock to be designated noncompliant. In the proposed definition of flock plan, the document did not have to be signed. [[Page 43976]] Comments on Issuance of Certificates As mentioned above, some commenters suggested that all infected and source flocks should be kept on a list that potential buyers could consult to obtain information about the scrapie status of animals they might buy. We believe this need for information regarding animals' exposure to scrapie can be met by changing the procedure for issuing certificates to require that certificates include a statement by the owner documenting any relevant information the owner has about the scrapie status of the animals, the exposure of the animals to scrapie, and the status of the animals' flock. This change would also address comments that suggested that certificates should contain more information about exposure of animals to scrapie. Therefore, we are changing Sec. 79.5, which concerns issuance of certificates, to require that a certificate must include: (1) A statement by the issuing veterinarian that the animals were not exhibiting clinical signs associated with scrapie at the time of examination and (2) an owner statement indicating whether the animal is or is not a scrapie-positive, suspect, high-risk or exposed animal and whether the animal originated in an infected, source, exposed or noncompliant flock. This added information will make the certificate more useful to persons acquiring these animals and to APHIS and State representatives enforcing the regulations, especially because the regulations require permits or prohibit the interstate movement of scrapie-positive, suspect, and high-risk animals, some exposed animals, and animals that originated in an infected or source flock. Other and General Comments Several commenters recommended that we make the regulations consistent with the Office International des Epizooties (OIE) draft chapter on scrapie for the International Animal Health Code. While we believe that these regulations are in concordance with the spirit of the OIE draft chapter on scrapie, some requirements in the draft chapter are impractical for some segments of the U.S. sheep industry. Since the draft chapter is still being debated by the member countries, we have decided not to change our regulations in ways that will be costly to our industry without knowing what the final draft will include. Several commenters supported the basic Consistent State requirements of reportability and movement restrictions but asked that the States be given up to 2 years to come into compliance with the other requirements. We agree, and proposed this change in the August 15 proposal. No commenters objected to this change, and we have included a delayed compliance date for these requirements. Several commenters stated that ewe lambs sent to feedlots should not be required to be identified. Their reasoning was that only a small percentage of ewe lambs are moved out of feedlots other than to slaughter, and that, in these cases, it would be appropriate to consider the feedlot to be their flock of origin. We disagree, because this would create a significant loophole which would encourage producers worried about their scrapie status to sell their breeding ewe lambs to feeders for resale to prevent tracebacks. Several commenters asked that we add a medium risk or exposed flock classification for flocks with lower levels of risk, particularly those on pilot project flock plans. We agree and have added an exposed flock classification in Sec. 79.4. We discussed the new definition of exposed flock above. This classification will identify animals with some degree of risk that might otherwise be exempted from necessary movement restrictions, e.g., as low-risk commercial sheep. Several commenters recommended that we give designated scrapie epidemiologists (DSEs), rather than APHIS or State veterinarians, the responsibility for designating animals scrapie-positive, high-risk, or exposed, and for designating flocks as infected, source, or exposed flocks. We agree that a DSE has the appropriate level of technical expertise for making these determinations, and for making redesignations when needed, and have made this change in Sec. 79.4(a). The commenters also suggested we give DSEs increased flexibility in addressing individual flock situations by customizing requirements for individual flock plans and post-exposure management plans and by conducting testing of flocks when test results could justify redesignation of a flock. We agree and have done this by allowing DSEs to determine the testing and monitoring needed for exposed flocks and by allowing them to modify flock plans and post-exposure management and monitoring plans under certain conditions to meet changing needs. These changes expanding the role of DSEs are in Sec. 54.3(a) and in Secs. 54.8(f), (h), and (i). We have also changed Sec. 79.4 to allow DSEs that are engaged in designating or redesignating a flock's status to order testing of flock animals if the DSE determines such testing is needed to properly designate a flock. In such cases the DSE will select animals for testing in a manner that will provide a 95 percent confidence of detecting scrapie at a prevalence of 1 percent. Testing may include live-animal testing using a live-animal official test, the culling and postmortem examination of genetically susceptible animals in the flock that cannot be evaluated by a live animal test, and postmortem examination of animals found dead or cull animals at slaughter. One commenter stated that flock plans and post-exposure management and monitoring plans should allow APHIS or State representatives, when necessary, to restrict the removal of animals from flocks subject to those plans. Otherwise, animals might be removed from fear that they would be officially determined to be scrapie positive. We agree, and have added appropriate language to Sec. 54.8(d). Many commenters noted an error in the preamble that stated ``* * * imported lamb sells at a higher price than domestic lamb and mutton.'' In fact, domestic lamb and mutton sell at a higher price than imported lamb and mutton, and this has been corrected in our final regulatory flexibility analysis. Several commenters supported our proposal to change the name of the Voluntary Scrapie Flock Certification Program to the Scrapie Flock Certification Program (SFCP), and a few commenters opposed the change. Those in favor recognized the trade benefits; those opposed were concerned that the program would no longer be voluntary. We have made no changes in rule based on this comment. Participation in the SFCP will remain voluntary. Several commenters asked that we review our requirements for importing sheep and goats in light of this rulemaking to ensure equitable treatment. That is outside the scope of this rulemaking but will be considered in making policy and in future changes to the import regulations. Several commenters expressed concern over how this regulation would affect large commercial range flocks. We agree that some of these concerns are valid and have made several changes to the rule to lessen adverse effects on these flocks. Some of the changes we have made to distinguish commercial flocks from other types were discussed above regarding the definitions of commercial sheep or goat and low-risk commercial sheep. We have also made changes affecting both intrastate and interstate movement of commercial sheep and goats. These changes, to both the interstate movement restrictions in Sec. 79.3 and the requirements for [[Page 43977]] Consistent States in Sec. 79.6, include: (1) Allowing Consistent States that have had no cases of scrapie in commercial flocks to exempt them from identification while in intrastate movement under 18 months of age; (2) allowing commercial sheep and goats to be identified with brands or earnotches in interstate movement; (3) reducing the recordkeeping and identification requirements for commercial flocks if they become infected; (4) not designating flocks as infected if the positive animal is a purchased ram; (5) allowing the interstate movement of all animals under 18 months of age in slaughter channels without identification; and (6) allowing increased options for commercial flocks if they are designated infected, source, or exposed and by giving greater latitude to DSEs to modify flock plans and post- exposure management and monitoring plans. Several commenters recommended that we differentiate between blackfaced and whitefaced sheep based on the higher incidence of reported scrapie cases in blackfaced sheep. We agree in part with this concept and have changed Secs. 79.3(a)(7) and (c)(5) of the interstate movement restrictions chart to distinguish between exposure to whitefaced and blackfaced sheep. A commenter expressed concern over the number of signs that could potentially result in an animal being designated a suspect animal. We believe that this will not be a problem because the definition of suspect animal in Secs. 54.1 and 79.1 includes the condition ``A sheep or goat that exhibits any of the following possible signs of scrapie and that has been determined to be suspicious for scrapie by an accredited veterinarian, or a State or APHIS representative.'' This requires not only that the animal exhibit at least one of the signs but that a veterinarian determine that it is suspicious for scrapie before it is officially designated a suspect animal for regulatory purposes. Anyone who suspects that an animal has scrapie is encouraged to report it to a State, Federal, or accredited veterinarian so that an official determination can be made. In some States, such reporting is a legal requirement. Several commenters commented on the cost of identifying animals. APHIS will provide alphanumeric tags to accredited veterinarians and backtags to markets and dealers. Additionally, producers may acquire alphanumeric eartags and backtags from APHIS at no cost if they have their premises and the tag sequences recorded in the National Scrapie Database. Producers may also purchase premises identification tags with assigned premises numbers from approved vendors. The requirements for vendors who wish to produce approved tags are contained in Sec. 79.2(f). Discussions with tag companies suggest that the cost of these tags will range from $0.06 for metal tags to $1.00 for highly tamper-resistant plastic flap tags. The type of approved tag used will be up to the producer and their flock identification needs. Also, we have eliminated the identification requirements for most sheep under 18 months of age and all slaughter goats, which substantially reduces the identification cost. Many commenters also remarked about the cost of applying identification, in addition to the material cost of the tags. We agree that there will be a cost to producers and markets to apply identification and keep records. We have reduced this as much as possible by reducing the number of animals that must be identified, by allowing certificates and market and dealer records to record premises identification rather than individual identification under certain circumstances, and by allowing several options for identification to fit different producers' needs. Some commenters were concerned that the rule does not indicate the penalties for failing to comply. The maximum criminal and civil penalties that may be imposed are listed in the statutes that are the legal authority behind our regulations. Listing penalty amounts in our regulations is not normal practice for APHIS. In response to this comment we have indicated some instances when violators will have privileges under this rule, such as the ability to apply official identification, revoked. Our intent to publish the identities of noncompliant flocks should also serve as a deterrent. Finally, action may be taken under civil and criminal law against violators of the regulations. Administrative penalties may include warnings, monetary penalties, or withdrawal of certified flock status. One commenter indicated that this rule would preclude State scrapie control programs. The rule does not preclude States from designing their own scrapie programs for intrastate movements. It would require that the program either meet the minimum specified requirements or can be shown to be equally effective in preventing the interstate movement of scrapie from the State. Some commenters expressed concern about the effect of burial or incineration on the environment, when animals are disposed of in accordance with the requirements of Secs. 54.7(b) or 54.8(f). APHIS believes that the regulations currently in place are adequate for safe, environmentally conscious disposal of this material. All commenters that addressed disposal costs stated that APHIS should pay the disposal costs for indemnified animals. We agree that APHIS will pay the disposal costs of scrapie-positive and suspect animals that cannot be disposed of by slaughter, and we have changed Sec. 54.7(d) of the rule to provide that APHIS may pay the reasonable costs of disposal for scrapie-positive and suspect animals that are indemnified. To obtain reimbursement for disposal costs, animal owners must obtain written approval of the disposal costs from APHIS, prior to disposal. This paragraph also states that the Administrator may also authorize payment of up to half the reasonable disposal costs for animals that are allowed to be destroyed by slaughter under this section but for which slaughter is not a practical or cost efficient means of disposal. However, Sec. 54.7(d) provides that APHIS may pay more than one-half of the expenses when the Administrator determines that doing so will contribute to scrapie eradication. For reimbursement to be made, the owner of the animals must present the veterinarian in charge with a copy of either a receipt for expenses paid or a bill for services rendered. Any bill for services rendered by the owner must not be greater than the normal fee for similar services provided by a commercial hauler or disposal facility. Some commenters misinterpreted the indemnity section and were unsure whether indemnity would be provided for both commercial and registered animals. Both the November 30 proposal and this rule provide indemnity for both types of animals, but in differing amounts. One commenter expressed concern over permitting exposed and high- risk sheep to go to feedlots, because this might pose a risk of spreading scrapie. We agree that allowing high-risk animals, exposed pregnant animals, or exposed animals with a vaginal discharge to go to feedlots from which they might return to the farm would present a significant risk, and we have changed Secs. 79.3(b)(3) and (c)(3) of the rule to restrict the movement of these animals to slaughter or to terminal feedlots. One commenter questioned whether the statement in the November 30 proposal regarding Executive Order 12988 that stated the rule ``preempts all State and local laws and regulations that are in conflict with this rule'' was [[Page 43978]] accurate, or was needed. The commenter stated that while State restrictions on the interstate movement of sheep and goats that were less stringent than the requirements of the rule will be overruled by the Federal requirements, State restrictions that are stricter than the rule's requirements should be allowed, because they would serve to improve disease control and reduce risks. The commenter also expressed concern that the statement meant that a State could not require any conditions for movement of animals into the State over and above the Federal requirements. Under Executive Order 12988, a Federal agency that formulates proposed regulations is required to specify in clear language the preemptive effect it intends to be given to its legislation or regulations. The executive order does not specify what that preemptive effect shall be. Historically, domestic animal health regulations of a State have not been challenged when they require conditions on interstate movement that are more stringent than those included in APHIS regulations. However, State regulations that conflict with or subvert Federal regulations concerning the interstate movement of animals and products that are promulgated for the purpose of the control of diseases of livestock and poultry are preempted by the Federal regulations. This is a matter of Constitutional law that we cannot change by regulation. Scrapie Pilot Projects Final Rule This final rule also republishes changes to parts 54 and 79 that were made by another final rule concerning scrapie pilot projects. That rule was published and effective on June 27, 2000 (Docket No. 99-067-2, 65 FR 39534-39536). That rule amended the regulations to exempt flocks from certain regulatory requirements when the flocks are participating in scrapie control pilot projects authorized by APHIS. Miscellaneous Changes We have also made miscellaneous minor changes to the November 30 and August 15 proposals in this final rule, such as correcting misspellings, revising sentences for clarity, and adding explanatory subject titles to some paragraphs of amendatory language. 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 Order 12866 and Regulatory Flexibility Act This rule has been reviewed under Executive Order 12866. The 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. In accordance with 5 U.S.C. 603, we have performed a final regulatory flexibility analysis for this rule. The economic analysis for this rule is summarized below, and a full copy is available from Regulatory Analysis and Development, PPD, APHIS, 4700 River Road Unit 118, Riverdale, MD 20737-1238. The economic analysis provides a cost- benefit analysis as required by Executive Order 12866 and an analysis of impacts on small entities as required by the Regulatory Flexibility Act. We are taking the actions described in this rule in order to strengthen scrapie control programs on the national level and to reduce the losses from scrapie to the sheep and goat industries. This action is considered necessary because not all State scrapie control programs may be effective in identifying animals that may be infected with scrapie and controlling their movement in intrastate and interstate commerce in a manner that will prevent the further spread of scrapie. Statutory authorities, including 21 U.S.C. 111, 114, 114a, and 134a- 134h, authorize the Department of Agriculture to conduct programs for the control of communicable animal diseases and to restrict the interstate movement of animals that may spread disease. As alternatives to this action, APHIS considered a complete ban on interstate movement of sheep and goats from States that do not have effective scrapie control programs. We also considered adding stricter certification, recordkeeping, and animal identification requirements for all sheep and goats moving interstate, without regard to the effectiveness of individual State scrapie programs. We also considered setting up a system to employ a prospective live-animal test in mandatory testing of sheep and goats before they could be sold for any commercial purpose, with mandatory destruction and disposal of animals that fail the test. All of these alternatives would impose more costs and recordkeeping requirements than the selected alternative, and we do not believe any of these alternatives would control scrapie more effectively than the selected alternative. A complete ban on movements from Inconsistent States would hurt the economies of those States, and while it would provide other States with some protection against infection from Inconsistent States, it would not eradicate the reservoirs of scrapie in those States. The alternative of stricter recordkeeping and identification for all interstate movements would not be effective as long as some of the information to be recorded is unknown or dubious, as can frequently happen when the animal originates in a State with a weak scrapie program. The alternative of mandatory testing, and destruction of animals that fail, was discussed in the November 30 proposal. It is not a practical option because a live- animal test has not been validated and approved and is also impractical at this time for economic reasons. This rule will result in the expenditure of indemnity funds by APHIS to compensate the owners of certain animals destroyed to prevent the spread of scrapie. This will also encourage certain States to improve the effectiveness of their State scrapie programs to avoid additional restrictions on the movement of sheep and goats from their States. The budgetary effects on APHIS of this rule will fall into four categories, all within available funds: An increase in outlays for staff to work with States and producers as they adapt to the new scrapie program requirements, a new program for indemnity payments, the cost of providing official eartags and backtags, and the cost for disposal (usually by landfill or incineration) of scrapie-positive and suspect animals that are indemnified. The initial amount of indemnity payments (the first year) is estimated to be approximately $761,245, based on an estimated 4,188 animals eligible for indemnity in known scrapie-infected and source flocks, but may be more if producer response to the availability of indemnity results in new admissions of infection that reveal additional cases of scrapie. The amount of indemnity paid should decline in subsequent years, although, if slaughter surveillance is initiated or if live-animal tests are approved and widely used, this decline may not occur for several years, depending on the number of scrapie-positive animals that are revealed by initial use of these tests. This indemnity program will be less costly than some previous indemnity programs since it focuses on eliminating individual infected and high-risk animals rather than entire flocks, a focus that should be aided in the near future by the availability of a validated live-animal test. If a live-animal test is accepted for official use, an increase in indemnity costs will be expected initially as new infected flocks are identified. [[Page 43979]] APHIS will bear the total reasonable cost for disposing of indemnified scrapie-positive and suspect animals, and will bear half the cost for disposal of certain other indemnified animals that are destroyed rather than sent to slaughter. The cost for disposal of each animal will range between a low of approximately $15 (for simple burial in a landfill, the most common method) and a high of approximately $100 (the maximum cost when incineration is required). The method used will vary depending on local disposal alternatives and requirements. The total cost for disposing of an estimated 3000 animals the first year would therefore fall in the range between $30,000 and $300,000, and would probably be on the order of $150,000. The cost for disposing an estimated 4200 animals over the lifetime of the program is estimated to fall in the range between $42,000 and $420,000, probably on the order of $210,000. Although this rule lists all States as ``Consistent States,'' any State that loses this status will bear additional costs to improve its State scrapie programs so that the producers in that State can avoid additional interstate movement restrictions established for States without effective intrastate control programs. However, the designation of all 50 States as Consistent States indicates that they have already dedicated the resources needed to conduct effective intrastate programs. The signing of the MOU will complete this process of designating a State as a Consistent State. Overview of U.S. Sheep and Goat Industry Operations, Inventory and Trade Much of the data used in this analysis is from the 1997 Census of Agriculture (USDA, National Agricultural Statistics Service), the last full census that is available. Where possible, updated 1999 data from Agricultural Statistics 2000 (USDA, National Agricultural Statistics Service) are employed. There were 7.026 million sheep and lambs in the United States in 1999. There were 5.163 million breeding sheep and lambs, of which 4.433 million were ewes and rams 1 year old or older. In 1997, as shown in Table 1, small farms accounted for over 99 percent of all the farms raising sheep and lambs, while farms considered to be large accounted for less than 0.3 percent. About 85 percent of the farms had an inventory of less than 100 animals and accounted for about 17 percent of the total inventory of sheep and lambs. On the other hand, sheep operations with an inventory of 5,000 sheep or more represented less than 0.3 percent of the farms but accounted for nearly 26 percent of the total inventory. Table 1.--Sheep and Lambs: Farms and Inventory by Size, 1997 --------------------------------------------------------------------------- ------------------------------------- Number of Inventory Farm inventory farms Farm share share --------------------------------------------------------------------------- ------------------------------------- 1 to 24......................................................... 35584 0.54 0.045 25 to 99........................................................ 20461 0.31 0.123 100 to 299...................................................... 6010 0.09 0.123 300 to 999...................................................... 2429 0.04 0.158 1,000 to 2,499.................................................. 820 0.01 0.16 2,500 to 4,999.................................................. 297 0.005 0.128 5,000 or more................................................... 189 0.003 0.263 ----------------- Total....................................................... 65790 --------------------------------------------------------------------------- ------------------------------------- Source: USDA, Census of Agriculture 1997. Of the total number of operations, about 60 percent were full owners, about 32 percent were part owners, and about 8 percent were tenants. Sheep are produced in all parts of the United States, although stock levels vary from State to State. Ten States accounted for nearly 73 percent of the total inventory, mostly in western and central areas. Northern and southeastern States have the smallest sheep populations, accounting only for 5.2 percent of the total. There were about 1.99 million goats in the United States in 1997, of which 52 percent were goats other than Angora or milk goats, 41 percent were Angora goats and about 7 percent were milk goats. The State of Texas accounted for about 64.3 percent of the goat inventory. Other States where goats are raised include Arizona, California, Georgia, New Mexico, North Carolina, Oklahoma, and Tennessee. These States together represented another 14.2 percent of the U.S. goats holdings. An average holding was about 35 goats. All goat holdings were considered to be small. During 1999 the United States produced about 247 million pounds of mutton, lamb and goat meat. It exported 5.6 million pounds and imported about 111 million pounds valued at $189.2 million. The United States exported 518,257 sheep and goats valued at $21.99 million in 1999, of which 494,098 went to Mexico. The United States imported 53,165 sheep and goats valued at $5.33 million in 1999, of which 53,126 were from Canada. The United States imported 111 million pounds of sheep and goat meat valued at $190.2 million and exported 5.6 million pounds of sheep and goat meat valued at $6.46 million in 1999. Most lamb and mutton imports came from Australia and New Zealand, countries recognized as being free from scrapie. The United States is a net importer of lamb and mutton. Sheep and Goats Affected by Scrapie Interstate Movement Restrictions Nearly 6.487 million lambs and sheep are marketed each year, of which 0.977 million are mature sheep and 5.51 million are lambs less than 18 months of age.\1\ There are 15 States with 53 flocks that were on the infected or source flock list as of July 2000. Of these, 47 are infected flocks and 6 are source flocks. Also, 14 additional flocks contained a scrapie-positive animal during FY 2000 but were not considered infected or source flocks in July, either because they had not been formally categorized yet or because they had completed an approved flock plan. Infected and source flocks are potential candidates for destruction and indemnity payments. --------------------------------------------------------------------------- \1\ USDA/NASS, Agriculture Statistics 2000, U.S. Government Printing Office, Washington DC, 2000. --------------------------------------------------------------------------- Additionally, over the last 10 years (1990-1999), an annual average of 139 animals have been submitted for scrapie diagnosis, of which an annual average of [[Page 43980]] 61 (or 44 percent) were determined to be scrapie-positive animals. However, it is likely that the number of reported cases will increase as the indemnity payments become available. There are about 1.578 million breeding sheep and lambs in the 15 States in which positive cases have occurred in FY 2000 or in which a source or infected flock exists. These animals represent approximately 28 percent of all breeding sheep and lambs in the United States and have a market value of about $150 million. The average size of a flock in an operation in the 15 States was 125, with between 21 and 479 per operation. Approximately 82.9 percent of these sheep are marketed, in most cases across State lines. However, nearly 85 percent of the marketed sheep are lambs less than 18 months of age, and will be exempt from individual animal identification under this final rule. Indemnity Costs for Animals Destroyed Due to Scrapie The exact number of scrapie-positive and high-risk animals that will qualify for indemnity payments is not known. However, an estimate of the number of animals potentially eligible for indemnity would be 50 percent (based on field estimates) of the animals in an average infected or source flock (based on past field experience). As noted above, there are currently 47 infected flocks and 6 source flocks, and 14 other flocks that currently or recently contained scrapie-positive animals. Thus, based on average flock size and the average percentage of high-risk animals in infected and source flocks, the number that can be estimated to qualify for indemnity payments during the first year would be 4,188 animals (=(53 + 14) x 125 x 0.50). This estimate implies that about 0.144 percent of the total number of breeding sheep and goats in the 15 States that can potentially move interstate will be designated as high-risk animals and be eligible for indemnity. The proportion of more expensive registered animals was 74.38 percent (8,199/11,023) \2\ Assuming a 75 percent registered to 25 percent nonregistered animal composition, the respective indemnity payments approximately range between $161 and $322 for registered animals and between $61 and $122 for nonregistered animals. The payment for registered animals is the sum of the spot market price and the premium given in order to adjust for value of these animals. Thus, the $322 per head payment for yearlings column includes the $122 spot market price and the $200 premium payment. Nonregistered animals get the spot market price. The estimated indemnity expenditure will be about $761,245 (See table 2 for detail). If the producer response to indemnity payment availability is positive, resulting in an increased number of indemnity requests, the expenditure will increase accordingly. However, even if a much larger number of animals were to be indemnified, the destruction of all known infected animals will greatly advance the goal of scrapie eradication, and can only be positive in terms of long-term reduced expenditure. --------------------------------------------------------------------------- \2\ Based on the composition of 8,199 registered and 2,824 commercial animals that were indemnified in 1990, as reported by APHIS personnel. Table 2.--The Indemnity Cost --------------------------------------------------------------------------- --------------------------------------------------------------------------- -- Registered (75%) Non registered (25%) Group --------------------------------------------------------------------------- --------------------- Total Number $/Head Cost Number $/Head Cost --------------------------------------------------------------------------- --------------------------------------------------------------------------- -- Yearlings (1 to 2 years)................ 431 $322 $138,782 144 $122 $17,568 $156,350 Running ages: 2 to under 4 years.................. 647 290 187,630 216 90 19,440 207,070 4 to 6 years........................ 647 190 122,930 216 90 19,440 142,370 Aged (>6 years)..................... 431 161 69,391 144 61 8,784 78,175 Ewe lambs........................... 985 175 172,375 327 75 4,905 177,280 --------------------------------------------------------------------------- ------------------------------------ Total............................. 3,141 .............. 691,108 1,047 .............. 70,137 761,245 --------------------------------------------------------------------------- --------------------------------------------------------------------------- -- Note:This chart assumes a distribution based on 1999 flock data for the ages, and resultant indemnity status, of the 4,188 animals estimated to be eligible for indemnity. We also assumed 75 percent of these animals are registered. We also estimated that 80 percent of non-registered ewe lambs will go to slaughter, so indemnity cost for this class will be minimal. Costs to Producers and APHIS for Official Identification of Animals Moving Interstate The animal identification required by this rule will result in additional costs. Of the approximately 7.82 million sheep and lambs in the United States, about 6.487 million sheep and lambs (or 82.9 percent) are marketed. Nearly 85 percent of these sheep and lambs that could move interstate are lambs less than 18 months of age in slaughter channels, which will not require identification tags under the new rule. Of the 1.99 million goats (=809,391 angora+146,678 milk+1,033,730 goats), about 27.5 percent could potentially be moved interstate. This assumes that most angora goats do not move interstate, but that about 20 percent of milk goats and 50 percent of other goats might move interstate. The cost of metal identification tags is between 4 cents and 6 cents per animal. Thus, assuming the total number of sheep and goats that will need identification tags is 1.52 million, the tag cost will be between $60,800 (=1,520,300 x 0.04) and $91,220 (=1,520,300 x 0.06). If the time it takes the owner to apply the tag (about 2 minutes per animal) is valued at $7.61 per hour (the revised average wage for livestock workers in January, 2000), this labor cost represents another $385,600 (=1,520,300 x 2 x $7.61/60). In some States, tags are provided by APHIS free to accredited veterinarians, while in others, they are purchased by accredited veterinarians through the State. Generally, wherever APHIS directly distributes tags they are free; where States distribute them, there may be no charge, a small processing fee, or a fee covering the full cost of the tags, depending on State regulations. In this rule there is a mechanism for APHIS or the State to provide tags direct to producers. If owners elect to use backtags for direct movements of animals to slaughter instead of eartags, the costs will be less. In either case, owners will incur the costs of applying identification. The effect on goat owners will be less, since about 41 percent of goats are the angora type, which are raised for their mohair and are less frequently moved interstate. Also, the [[Page 43981]] owners of goats that qualify as ``low-risk goats'' will not have to individually identify their animals. Thus, the total potential identification costs for goat owners will be between $3,850 and $5,570. International Trade Effects The United States has limited foreign trade both in live sheep and goats and their products. Australia, a potential major importer of U.S. sheep for breeding purposes, is scrapie-free and prohibits imports of sheep from the United States. Australia allows imports of live goats from the United States only if they undergo a 3-year quarantine upon arrival. Mexico allows the importation of U.S. sheep only if the sheep are from flocks enrolled in the Voluntary Scrapie Flock Certification Pr