Import/Export User Fees

AGENCY:

Animal and Plant Health Inspection Service, USDA.

ACTION:

Final rule.

SUMMARY:

We are changing our user fees for import- and export-related services that we provide for animals, animal products, birds, germ plasm, organisms, and vectors. We are increasing user fees for fiscal years 2001 through 2004 to reflect standard annual increases in expenses and additional cost components. We have determined that the fees must be adjusted annually to reflect the anticipated cost of providing these services each year. By publishing the annual user fee changes in advance, users can incorporate the fees into their budget planning. The user fees pay for the actual cost of providing these services. We are also making some editorial changes to make the regulations easier to read and eliminate duplication.

EFFECTIVE DATE:

October 1, 2000.

FOR FURTHER INFORMATION CONTACT:

For information concerning services provided for animals, animal products, birds, germ plasm, organisms, and vectors, contact Dr. Gary Colgrove, Chief Staff Veterinarian, National Center for Import and Export, VS, APHIS, 4700 River Road Unit 38, Riverdale, MD 20737-1231; (301) 734-8364.

For information concerning program operations, contact Ms. Louise Lothery, Director, Management Support Staff, VS, APHIS, 4700 River Road Unit 44, Riverdale, MD 20737-1231; (301) 734-7517.

For information concerning user fees or rate development, contact Ms. Donna Ford, Section Head, Financial Systems and Services Branch, BASE, MRPBS, APHIS, 4700 River Road Unit 54, Riverdale, MD 20737-1232; (301) 734-8351.

SUPPLEMENTARY INFORMATION:

Background

The regulations in 9 CFR part 130 (referred to below as the regulations) list user fees for import- and export-related services provided by the Animal and Plant Health Inspection Service (APHIS), U.S. Department of Agriculture (the Department), for animals, animal products, birds, germ plasm, organisms, and vectors. We are amending the user fees for these import- and export-related services to reflect the increased costs of providing the services.

These user fees are authorized by § 2509(c)(1) of the Food, Agriculture, Conservation, and Trade Act of 1990, as amended (21 U.S.C. 136a). APHIS is authorized to establish and collect fees that will cover the cost of providing import- and export-related services for animals, animal products, birds, germ plasm, organisms, and vectors.

Since fiscal year (FY) 1992, APHIS has received no directly appropriated funds to provide import- and export-related services for animals, animal products, birds, germ plasm, organisms, and vectors. Our ability to provide these services depends on user fees. We change our user fees through the standard rulemaking process of publishing the proposed changes for public comment in the Federal Register, considering the comments, publishing the final changes in the Federal Register, and making the new user fees effective 30 days after the final rule is published. This rulemaking process can be lengthy. As a result, our user fees have usually reflected less than our actual cost to provide services. Since implementing these user fees in 1992, we have only adjusted the user fees for cost changes twice. Most of the user fees have not been adjusted for cost changes since 1996—four years.

For our user fees to cover our costs so that we can continue to provide services and to inform our customers of user fees in time for advance planning, we proposed to set user fees for our import- and export-related services in advance for fiscal years 2000 through 2004. Our proposal was published in the Federal Register on September 30, 1999 (64 FR 52680-52694, Docket No. 97-058-1). The proposed user fees were based on our costs of providing import- and export-related services in FY 1999, including costs for rent, equipment replacement, billings, collections, and maintaining a reserve, plus adjustments for inflation and anticipated annual increases in the salaries of employees who provide the services. We included costs for rent because we were directed to do so as the result of an audit. We included costs for equipment replacement and maintaining a reserve because the Department determined that these costs are part of the full cost of providing services. We included costs for billings and collections because we are assessed for these costs and our user fees have not previously contained a component for them. We estimated inflation at 2.3 percent a year based on the Consumer Price Index (CPI). The estimated CPI is published in the Economic Assumptions table of the Budget for the U.S. Government each year. We used estimated pay increases of 4.4 percent for FY 2000 and 3.9 percent for FY 2001 through FY 2004, published by the U.S. Treasury Department, to calculate increases in the direct labor costs each year.

We also proposed to consolidate the hourly and premium hourly rate user fees for import- and export-related services. These fees were listed in §§ 130.3, 130.5, 130.9, 130.10, and 130.21. We proposed to list them in one new section, § 130.30. In addition, we proposed to list the minimum user fee for import- and export-related services in one section—§ 130.30. This fee was repeated in §§ 130.3, 130.5, 130.6, 130.7, 130.9, 130.10, and 130.21. These proposed changes were intended to eliminate duplication and make the hourly, premium hourly, and minimum rates easier for our customers to locate.

Additionally, since the Miami Animal Import Center has never been used as an exclusive use quarantine facility, we proposed to remove user fees for the exclusive use of the Miami Animal Import Center from the listing in § 130.3.

We solicited comments concerning our proposal for 60 days ending November 29, 1999. We received 68 comments by that date. They were from representatives of the artificial insemination industry, exporters, veterinarians, and a State department of agriculture. They are discussed below by topic.

Clarification

Comment: Are you adding costs for inflation at 2.3 percent a year based on the Consumer Price Index in addition to the proposed pay increases?

Response: We increased the direct labor cost element by the estimated pay increases. We increased all other operating costs (i.e., direct materials, indirect labor, utilities) by 2.3 percent a year for inflation based on the Consumer Price Index.

Opposition to User Fees or Increases in General

Comment: We oppose the proposed increases in import- and export-related user fees.

Response: We are no longer appropriated funds for these services. Most of these user fees have not changed since 1996; some have been in effect longer. Therefore, to continue providing these services, we must recover our costs from the customers who benefit from our services. We are authorized to do this through user fees. As our costs increase, we must increase our user fees. We will continue to monitor our fees and control our operating and staffing costs to provide services as inexpensively as possible. Therefore, we are making no change to the rule in response to this comment.

Comment: User fees should be increased as the need arises. They should not be set several years in advance.

Response: Our import- and export-related user fees are calculated based on our employee salaries and other costs as described in the proposal. We know from budget estimates and economic forecasts that these costs are expected to increase by a small percentage each year.

As discussed in our proposal, we plan to review these user fees each year, and we continually evaluate our funding needs. The purpose of multi-year user fee rates is to allow the user fees to increase as our need for additional funding increases and to allow users to incorporate the fees into their budget planning. Therefore, we are making no change to the rule in response to this comment.

Comment: If user fees are established for multiple years in advance, then user fee customers will not have an opportunity to comment about user fee rates during the period that those user fees are in effect. The user fee rates will not be responsive to industry needs.

Response: By setting user fees in advance for a 5-year period, we are responding to comments we received in response to past proposals. Those commenters stated that it was difficult to make business plans without knowing in advance when fees would change and by how much. Also, commenters in the past have objected to large fee increases, even though they occurred infrequently. We believe adopting user fees for 5 years in advance addresses these concerns. Under this rule, business planning should be easier, and fee increases will be more gradual. Customers have had the opportunity to comment on the user fees through this rulemaking process. In addition, customers may offer suggestions and comments on user fees at any time. For example, APHIS established a flat rate use fee in lieu of the hourly rate user fee for embryo collection center inspection and approval at the request of an industry association. (See 63 FR 71728-71729, Docket No. 98-005-2, December 30, 1998). Therefore, we are making no change to the rule in response to this comment.

Comment: Producers are already paying enough taxes, and these user fees are double taxation.

Response: A tax is money paid to support Government operations that benefit the general public. A user fee is money collected for a specific service provided to a readily identifiable recipient. The Food, Agriculture, Conservation, and Trade Act of 1990, as amended (referred to below as the Act) authorizes the Department to prescribe and collect user fees to reimburse the cost of carrying out certain import- and export-related services for animals, animal products, and veterinary diagnostics. The Act further states that “[a]ny person for whom an activity related to the importation, entry, or exportation of an animal, article, or means of conveyance or relating to veterinary diagnostics, is performed pursuant to the section, shall be liable for payment of fees assessed.” APHIS user fees are designed to recover and fund the cost of providing specific services. As such, our user fees are fees for specific services provided to a certain portion of the public and, therefore, do not constitute a tax. Therefore, we are making no changes based on this comment.

Comment: Increasing the user fees places an undue burden on U.S. exports at the same time the Government is spending tax dollars to promote the export of agricultural products.

Response: Congress directed us to charge user fees for these services. Congress decides how tax dollars are allocated. Congress has not allocated additional funds for our import- and export-related services for animals and animal products. Therefore, in order to continue providing import- and export-related services, we must charge user fees, and, under our user fee authority, we must charge user fees which will recover the full cost of providing services. We realize that increases in the user fees will increase the up-front cost of doing business for importers and exporters. However, before APHIS began collecting user fees for import and export services, users were subsidized by the taxpayers in general. Those who received services from APHIS were not charged and the services were paid for through appropriated taxpayer dollars. As appropriated funds are no longer available to pay for these services, users must pay for them through user fees. We attempt to minimize the cost of our services to keep APHIS user fees at the lowest possible level. We do not anticipate that exports will decline significantly as a result of these increases in user fees. Therefore, we are making no changes based on this comment.

Comment: The U.S. agricultural economy is in bad financial condition. One of the ways we can boost the U.S. agricultural economy is to increase exports of animals and animal products. We currently have a negative balance of trade in germ plasm. Economic crises in Asian countries, the strong U.S. dollar, and European Union subsidies of live animal exports are examples of current trends that keep U.S. agricultural exports low. These user fee increases will escalate prices, make U.S. animals less competitive for export, and seriously hamper the ability of U.S. exporters to increase exports of U.S. agricultural products. Currently, other competitor countries, such as Canada, have no user fees.

Response: Although some countries do not currently charge for import- and export-related services, user fees for these services are being adopted by more and more countries. In fact, as of May 3, 1995, Canada charges user fees for certain import- and export-related animal health services (see May 3, 1995, Canada Gazette Part II, Vol. 129, No. 9, SOR/DORS/95-198). Therefore, we do not believe that U.S. exporters are at a competitive disadvantage compared with exporters in other countries because of APHIS user fees. Therefore, we are making no changes based on this comment.

Comment: You should make a greater distinction between imports and exports. Live animal exports should be given greater priority and provided with better and less expensive services from APHIS because they are absolutely essential to the U.S. economy.

Response: Our user fees do not distinguish between imports and exports. Our user fees are calculated to recover the full costs of the services that we provide. Because of budget constraints, we do not have the option to charge user fees that recover less than the full cost of providing a service. If we did so, we would not collect enough money to support the service. However, we have attempted to minimize the cost of our services, thereby keeping APHIS user fees at the lowest possible level. We are making no changes based on this comment.

Fees Related to Specific Services

Comment: The proposed increases for the hourly rate user fees and the user fees in § 130.8(a) for semen imports are too high. The hourly rate user fee would increase by $20, from $56.00 to $76.00 per hour. The user fee for semen imports would increase from $39.50 to $54.00.

Response: This is the first increase in these user fees since 1996 (see 61 FR 20421-20437, Docket No. 92-174-2, May 7, 1996). We need to increase these user fees because, as stated in the proposal, operating costs have increased. In addition, the fees established in 1996 did not take into account our costs for rent, equipment replacement, billings, collections, and maintaining a reserve. The fees in this rule reflect both the increase in costs and the inclusion of cost components that had not been included before. They also reflect projected salary increases for the employees who provide the services. Therefore, we are making no changes based on this comment.

Comment: The proposed user fees in § 130.8(a) for germ plasm exports are too high. The user fee for semen exports would increase from $33.50 to $45.00 per certificate. The user fee for embryos exports would increase from $54.75 to $74.00 per certificate in the first year and up to $83.00 per certificate by the year 2003. We realize that there has been no adjustment to the use fee for the endorsement of export certificates for germ plasm since it was first implemented in January 1994. However, the Consumer Price Index (CPI) over this period of time (January 1, 1994 through January 2000) shows an increase of approximately 21 percent, while the proposed user fee increase is approximately 34.5 percent, which is well above the CPI.

Response: As stated in the proposal, operating costs have increased since these user fees were established in 1994 (see 58 FR 67647-67656, Docket No. 92-042-2, December 22, 1993). Also, the original user fees did not take into account our costs for rent, equipment replacement, billings, collections, and maintaining a reserve . We did not propose changes in these user fees in 1996 because the user fees had not been in place long enough to evaluate whether they were sufficient to provide for full cost recovery. The fees in this rule reflect both the increase in costs and the inclusion of cost components that had not been included before. They also reflect projected salary increases for the employees who provide the services. Therefore, we are making no changes based on this comment.

Comment: We are especially concerned about the magnitude of the proposed changes in user fees for the inspection of embryo collection facilities. The user fee for the inspection of embryo collection facilities is increasing from $278 to $337 in the first year and to $380 by the year 2003.

Response: In 1999, the user fee for the inspection of embryo collection facilities was revised from an hourly rate user fee to a flat rate user fee in response to a request from industry (see 63 FR 71728-71729, Docket 98-005-2, published December 28, 1998 and effective January 29, 1999). The user fee was calculated to reflect the average annual cost of providing the service, including the time to provide the service and travel time to the facility. The flat rate annual user fee was arrived at using the average number of hours required for an APHIS inspector to complete an inspection (including travel time), the average number of inspections performed during a year (2 per facility), the average direct labor involved, and a proportional share of support costs, overhead, and departmental charges. We did not, however, factor in our costs for rent, equipment replacement, billings, collections, and maintaining a reserve, which account for most of the increase in the fee in this rulemaking. The fee increases over fiscal years 2000 to 2004 also anticipate annual increases in the salaries of the employees who provide the services. We have made every attempt to keep our costs and our user fees down to the lowest reasonable level. The increases in the user fee are necessary to recover the full cost of our services. Therefore, we are making no changes based on this comment.

Comment: User fees for export certificates should not be increased because exporters print the certificates and prepare them. APHIS should, therefore, charge only a minimal fee for its services.

Response: The user fee for the endorsement of export health certificates is calculated based on the costs we incur to provide our services. APHIS employees endorse export health certificates in accordance with the regulations in 9 CFR part 91. An APHIS endorsement certifies that animals and animal products being exported from the United States are free from communicable diseases. Direct labor activities may include the following: Telephone time for providing information about the export health certification process, mailing information to customers, protocol research, review of paperwork such as health certificates, verification of laboratory test results, confirmation that the importing country's requirements have been met, paperwork completeness review, certification statements review, endorsement/signing, placing an official seal on documents if needed, and completing APHIS paperwork related to the endorsement. Many of the activities listed above must be performed to make it possible for APHIS employees to endorse the export health certificates. We used our accounting data and surveys of APHIS locations nationwide where export health certificates are endorsed to identify the amount of direct labor time APHIS employees spend providing these services. In addition, some people use preprinted forms, while others do not. The user fees were based on averages; therefore, we factored the variations in the type of forms into the user fee calculations. An example showing a minimal user fee for the use of preprinted forms with very routine information is the user fee in § 130.20(b)(1) for endorsing export health certificates for nonslaughter horses to Canada. Even though these horses all require a test, the endorsement process is so routine that we established a separate minimal per certificate user fee instead of a user fee calculated based on the number of horses and the number of tests or vaccinations. Therefore, we are making no changes based on this comment.

Comment: There appear to be inequities in § 130.8 between the user fees for semen exports and those for embryos exports. The user fees for embryo exports are significantly higher than the user fees for semen exports. In addition, the same fee applies for certificates for semen, regardless of how many doses are covered by the certificate. On certificates for embryos, however, the basic fee covers only up to five donor pairs on a certificate; an additional fee applies for each additional group of donor pairs (up to five pairs per group) on the same certificate.

Response: The average time required for us to provide export-related services for embryos is higher than the average time to provide those services for semen. Specifically, we have found that more time is required to answer questions about exporting embryos in advance and to review documentation and statements on the certificates that accompany the embryos for exportation. Therefore, the calculation for the user fees for exporting embryos includes more direct labor hours, and that results in the higher cost. The intention in the tiered user fee structure for the export-related services for embryos was not to limit the number of donor pairs on a certificate, but to recognize the lower costs to provide the same service for the additional donor pairs. We determined that there is a marginal cost decrease to endorse additional groups of donor pairs on the same export health certificate. User fees are calculated to recover only the cost of services. Therefore, the tiered user fee rate, with a lower fee for additional groups of donor pairs on the same certificate, is appropriate, and we are making no changes based on this comment.

Comment: The user fee schedule for inspections of embryo collection facilities should have an initial fee at one rate and a renewal fee at a reduced rate.

Response: Our annual inspection of an already approved embryo collection facility takes a certain amount of time. The first inspection of a facility may take a little longer, but we are not charging more for that first year; instead we built it into the annual user fee so the cost of the inspections is averaged. Therefore, we are making no changes based on this comment.

Comment: We request that you consider establishing a maximum fee for exporting a small shipment of livestock. We suggest a small shipment be 30 or fewer pigs, sheep, or goats, or 15 or fewer dairy or beef animals. These numbers will fill approximately two aircraft pallets. It is our experience that the processing and inspection at the port of export for this size shipment requires an hour or less of APHIS veterinary personnel time.

Response: We have established a maximum user fee for export health certificates that is intended as a cap for the user fee for the endorsement of export health certificates for large shipments (see 65 FR 16122-16124, Docket 98-003-2, March 27, 2000). The maximum user fee ensures that our fixed costs have been covered for large shipments. We have reviewed our flat rate user fees for export health certificates and believe that these user fees are fair for any size shipments, even small shipments. Based on the examples provided in the comment, the small shipment maximum being requested would apply to export-related services provided at our hourly rate user fee. Under § 130.20(c), when exporters are able to have these endorsements done at the inspection site at the same time that we provide inspection and supervision services, then the hourly rate user fee charged for the inspection and supervision services also covers the endorsement services. The hourly rate user fees are based on the actual number of hours it takes to provide our services. Therefore, we believe that these hourly rate user fees are also fair, and we are making no changes based on this comment.

Comment: The user fee in § 130.20(a) for nonslaughter horses to Canada is too low because of the required tests. In addition, the processing of the export health certificates for nonslaughter horses to Canada has changed over time. When the user fee was established, Canada required a separate certificate for each horse. Since 1995, Canada has allowed more than one horse to be included on a certificate, under certain conditions. Therefore, the user fee should be revised to reflect this change. The regulations need to clarify the charges for various forms used for this service. The costs for export certifications with multiple horses are not adequately covered by the user fee for nonslaughter horses to Canada.

Response: The user fee for endorsing the certificate for nonslaughter horses to Canada is lower than the user fee for other endorsements requiring the verification of tests or vaccinations. This is because most certificates for nonslaughter horses to Canada are preprinted forms with complete information (VS form 17-145). Also, there is a single identification to check for these horses versus multiple identifications for cattle and other animals. In addition, there is a single statement on the certificate for these horses, as opposed to multiple statements for cattle and other animals. Consequently, endorsing certificates for nonslaughter horses to Canada is a very standard procedure that takes significantly less time than endorsing other certificates that require the verification of tests or vaccinations. This is why, when we initially established the user fee, we identified it separately from user fees for other endorsements. As the commenter pointed out, however, the certificates initially covered a single nonslaughter horse to Canada. Since that time, exporters have also used VS form 17-140 to cover multiple nonslaughter horses to Canada. Certificates covering multiple horses take longer to process than certificates covering only a single horse. Therefore, we are amending § 130.20(a) to specify that the base user fee covers the first animal on the certificate and that each additional animal on the certificate will increase the fee by $4.

Comment: The minimum user fee for inspecting pet birds entering the United States should not be increased. APHIS should establish a separate minimum user fee for pet birds that would be lower than the minimum user fee for other services.

Response: The minimum user fee covers the basic minimum service that we provide. The minimum user fee was developed primarily to cover the costs of handling unusually small importations at ports of entry. Our user fees are calculated to represent the average costs of providing the service. We cannot predict or control the frequency of unusually small importations. Therefore, we cannot account for the cost of providing service for them when calculating our user fees. To ensure that our basic costs are always covered, we charge a minimum user fee. At a minimum, any service we provide requires a certain amount of fixed costs. These fixed costs include the direct costs of providing the service and indirect costs to support providing a service; for example, to process the paperwork and bill for the services. We cannot establish a lower minimum user fee for inspecting pet birds entering the United States or we would not recover the full costs of providing those services. Therefore, we are making no changes based on this comment.

Comment: The user fees in § 130.20 for export certificates do not capture all of the preparatory services that APHIS provides. The accredited veterinarian checks with the area veterinarian in charge for the receiving country's requirements, which generally takes 10-15 minutes, with an additional 10-15 minutes for clarification. The area veterinarian in charge and export/legal documents examiner review the draft and identify corrections. The accredited veterinarian sends the original to the area veterinarian in charge for endorsement. This is a facet of improved customer service and significantly reduces the situations where animals are loaded but APHIS can't endorse the export certificate. APHIS should increase the user fee to capture all of the costs of the preparatory services.

Response: These user fees are calculated to represent the average costs of providing the service. Therefore, some of the user fees may appear to be too high or too low based on an individual's experience, but in fact represent the average cost of providing the service. In the aggregate, the export certification user fees cover our costs and are not too low. The user fees increases in this document should allow us to continue to adequately recover export certification costs. We are making no changes based on this comment.

Comment: Services that APHIS provides under § 130.7 entail the same amount of work for in-transit cattle, horses, and swine. Therefore, APHIS should adjust the user fees to make them the same.

Response: The main difference in the calculations to determine the user fees for in-transit cattle, horses, and swine is the average number of animals (head) inspected per entry. The number of head per entry varies by type of animal and by port of entry. We calculated these user fees to reflect the average cost of service for each type of animal. We started with the total cost of providing the service and divided that by the average number of animals in a shipment as follows: 200 swine, 35 cattle, and 7 horses. Therefore, the calculations resulted in lower user fees for swine and higher user fees for horses. We believe that this was an equitable way to determine the appropriate user fees to pay for the services we provide for in-transit cattle, horses, and swine. Therefore, we are making no changes based on this comment.

Comment: The user fees in § 130.20 do not capture all of the services that APHIS provides for export health certificates that do not require verification of tests or vaccinations, but do require APHIS to verify statements made by an accredited veterinarian concerning the animals to be exported and/or the herd of origin. When APHIS must verify certification statements, then the user fee for the verification of tests or vaccinations should be used.

Response: We calculated these user fees to represent the average costs of providing the service. Therefore, some of the user fees may appear to be too high or too low based on an individual's experience, but in fact represent the average cost of providing the service. We did incorporate the time to review occasional certification statements into the calculation for the user fee for the endorsement of export health certificates that do not require tests or vaccinations. In the aggregate, the export certification user fees cover our costs and are not too low. The user fee increases in this document should allow us to continue to adequately recover export certification costs. Therefore, we are making no changes based on this comment.

Fees Relative to Services Rendered

Comment: The APHIS National Center for Import and Export (NCIE) personnel and the local APHIS area veterinarian in charge coordinate and facilitate the export of animals and animal products, including germ plasm. From early 1999 on, we have noticed an increase in job requirements and a gradual reduction in experienced personnel, resulting in a decrease in the ability of NCIE staff to respond to issues related to the exportation of germ plasm. In addition, our local area veterinarian in charge has a large geographic area of responsibility, and we often have to work around his schedule for our outbound shipments. APHIS helps us with serious issues regarding animal semen detained in customs in foreign countries and with health regulation questions. Timely information and quick action can make a difference in these areas. Delays in responses from APHIS can cause extra expenses and delays and increase the risk of losses. We respectfully request that the number of experienced staff be increased to a level such that staff can provide services needed by the artificial insemination industry to facilitate the trade of germ plasm in a timely fashion. We urge that the structure of the NCIE staff be given consideration to effectively support the trade of U.S. goods, including germ plasm.

Response: Some experienced personnel have left and new people are being hired and trained to provide the required import- and export-related user fee services for animals, animal products, and germ plasm. We provide a wide range of services and believe that structure of our staff is effective for providing those services. Our staff provides both user fee services and services covered by appropriations. If we were to consider restructuring to provide staff to focus solely on user fee services for the germ plasm industry, we would have to recalculate the germ plasm user fees, which could result in significant increases in those user fees. We are making no changes based on this comment.

Comment: We refer to the APHIS Retrieval System on the Internet for the latest health requirements for other countries. In late 1999, there was an error in the European Union requirements listed in the system, and the Japanese health requirements were not listed in the system. If user fees are increased, then we request better service.

Response: We provide information about other countries' requirements as a service for our customers. We attempt to keep the information in our APHIS Retrieval System current. We are dependent, however, on receiving timely information from other countries and organizations. We are making no changes based on this comment.

Miscellaneous

Comment: You should provide forms for export health certificates that can be used with a laser printer instead of the older forms using carbon paper.

Response: We use many different forms for our import- and export-related services for animals, animal products, and germ plasm. Some of these forms are available as computerized forms that can be used in laser printers. We are continuing the process of converting our forms to make them easier to use, including forms that can be used in laser printers.

Comment: Money from user fees should be used to streamline the certification and endorsement process through electronic transfer of papers, signatures, and record retrieval. An electronic streamlined process could reduce costs.

Response: We are currently developing a system that will provide a wide range of on-line services for the electronic submission, payment, review, and receipt of permits. We also intend to develop additional electronic systems for other services that we provide. APHIS services are continually adjusted to meet changing needs. We are constantly trying to improve our services and reduce costs.

Comment: APHIS should streamline the paperwork for pet birds by combining the current pet bird agreement and the avian release form into a single document for the inspection and release of pet birds.

Response: We are looking at streamlining the pet bird import process, including forms.

Comment: Please clarify § 130.20(b)(1), in the second sentence to say “tests or vaccinations” in place of “tests” to be consistent with the wording throughout the paragraph for these user fees.

Response: In 1996, we amended § 130.20(a) and (b)(1) to clarify that the user fees in § 130.20(b)(1) apply when APHIS personnel must verify tests or vaccinations (see 61 FR 20421-20437, Docket 92-174-2, May 7, 1996). At that time, we inadvertently failed to make the change suggested by the commenter. We are doing so in this final rule.

Comment: For the user fees in § 130.7(a), are registered horses considered “Registered animals, all types” or “Horses other than slaughter and in-transit”?

Response: Most horses are registered horses; therefore, our intention has always been that the category “Horses, other than slaughter and in-transit” was to include registered horses. To clarify this, we are changing the categories in the table for registered animals and horses to read “Registered animals (except horses)” and “Horses (including registered horses), other than slaughter and in-transit.”

Comment: Under § 130.7, there are categories for “Poultry imported for any purpose” and “Slaughter animals, all types,” but no category for slaughter poultry. The same amount of inspection and paperwork is required for slaughter cattle, swine, turkeys, or chickens. APHIS should consider adding a category in § 130.7 for in-transit poultry.

Response: The user fee for poultry imported for any purpose includes slaughter poultry and in-transit poultry. We charge the user fee for poultry imported for any purpose for in-transit poultry and slaughter poultry because the same amount of time is required to inspect the poultry. To clarify this, we are changing the category in the table for slaughter animals to read “Slaughter animals (except poultry).”

Comment: Under § 130.7(a), there are user fees for “Feeder animals (calves, cattle, sheep, and swine)” and “Horses, other than slaughter and in-transit,” but no category for “Feeder horses.” APHIS should establish a user fee category for “Feeder horses” for horses 9 months or younger.

Response: In our experience, the importation of horses strictly for feeding purposes is rare. Therefore, we are not publishing a user fee for feeder horses. If a large load of horses is imported strictly as feeder animals, then we would determine that at the port of entry and would, under § 130.30(a)(13), charge our hourly rate user fee for the services required for those horses. Therefore, we are making no changes based on this comment.

Intervening Amendments

Our proposed rule was published on September 30, 1999. Between that date and the publication of this final rule, other final rules amending part 130 have been published. The changes made by those final rules are described below. This final rule reflects those changes.

On September 23, 1999, we published in the Federal Register (64 FR 51421-51422, Docket No. 98-006-2) a final rule that amended user fees for import- or entry-related services provided for animals presented at airports, ocean ports, and rail ports. The rule became effective on November 29, 1999. The rule replaced the flat rate user fee in § 130.7 with hourly rate user fees in § 130.9.

On December 3, 1999, we published in the Federal Register (64 FR 67699-67670, Docket No. 98-004-1) a final rule that made miscellaneous, nonsubstantive changes in part 130. The rule was effective as of November 29, 1999. The rule revised the section heading for § 130.2; clarified the ruminants category in § 130.6 to include breeder ruminants; moved user fees for pet birds out of § 130.8 and into § 130.10; revised the section heading for § 130.10; and revised several categories in § 130.20 for clarity by adding nonanimal products to the animal products category, moving the nonslaughter horses to Canada category from the table in paragraph (a) into the table in paragraph (b)(1), and revising the poultry and slaughter animals categories to clarify that slaughter poultry are included in the poultry category.

Also on December 3, 1999, we published in the Federal Register (64 FR 67697-67698, Docket No. 98-052-2) a final rule that amended user fees for the inspection for approval of biosecurity level three laboratories. The rule became effective on January 3, 2000. The rule replaced the hourly rates for this service in § 130.9 with a flat rate user fee in § 130.8 to cover all the costs of inspection related to approving a laboratory for handling one defined set of organisms or vectors.

On June 20, 2000, we published in the Federal Register (65 FR 38179-38182, Docket 98-045-2) a final rule that amended user fees for inspection and approval of various pet food facilities. The rule became effective July 20, 2000. The rule replaced the hourly rates for this service in § 130.21 with flat rate user fees in new § 130.11. The rule also moved all of the flat rate user fees contained in § 130.8 that are charged to import/export facilities or establishments into new § 130.11.

User Fees for Animals and Birds Quarantined in APHIS-Owned or Operated Quarantine Facilities

Sections §§ 130.2 and 130.3 contain fees for animals and birds quarantined in APHIS-owned or operated quarantine facilities, including APHIS Animal Import Centers. Users must make advance reservations for space at these facilities. To avoid unfairness, for all space reserved prior to the date this final rule is published, we will charge the user fee in effect at the time the reservation was made. For space reservations made after the date this final rule is published, we will charge the user fees adopted in this final rule.

Effective Date

Our proposal included user fees for fiscal years 2000 through 2004. Because this rule will not be effective until October 1, 2000, our final rule does not include fee increases for any portion of FY 2000.

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. 604, we have prepared a final regulatory flexibility analysis regarding the economic effects of this rule on small entities. Below is a summary of the economic analysis for the changes in APHIS user fees in this document. The discussion also serves as our cost-benefit analysis under Executive Order 12866. A copy of the full economic analysis, which includes comparisons of the change in collections for each user fee, is available for review at the location listed in the ADDRESSES section at the beginning of this document.

Need and Objective of This Rule

These user fees are authorized by § 2509(c)(1) of the Food, Agriculture, Conservation, and Trade Act of 1990, as amended (21 U.S.C. 136a). APHIS is authorized to establish and collect fees that will cover the cost of providing import- and export-related services for animals, animal products, birds, germ plasm, organisms, and vectors.

Since FY 1992, APHIS has received no directly appropriated funds to provide import- and export-related services for animals, animal products, birds, germ plasm, organisms, and vectors. Our ability to provide these services depends on user fees. We change our user fees through the standard rulemaking process of publishing the proposed changes for public comment in the Federal Register, considering the comments, publishing the final changes in the Federal Register, and making the new user fees effective 30 days after the final rule is published. This rulemaking process can be lengthy. As a result, our user fees have not always reflected the actual cost of providing services.

For our user fees to cover our costs so that we can continue to provide services and to inform our customers of user fees in time for advance planning, we are setting user fees for our services in advance for fiscal years 2001 through 2004. The user fees are based on our costs of providing import- and export-related services in FY 1999, including costs for rent, equipment replacement, billings, collections, and maintaining a reserve, plus adjustments for inflation, plus anticipated annual increases in the salaries of employees who provide the services. Because we had initially projected having the new fees in place sometime in FY 2000, our analysis covered fiscal years 2000 through 2004. We used estimated pay increases of 4.4 percent for FY 2000 and 3.9 percent for FY 2001 through FY 2004 published by the U.S. Treasury Department to calculate increases in the direct labor costs each year. We estimated inflation at 2.3 percent a year based on the Consumer Price Index (CPI). The estimated CPI is published in the Economic Assumptions table of the Budget for the U.S. Government each year.

Changes in Program Collection and Cost Estimates

In our proposed rule, we made certain collection and cost estimates based on the best data available at the time. Actual collections and costs varied somewhat from the estimates, but did not cause a significant difference in the scope of the program or the need to revise the fees as proposed. Our full analysis has been updated to reflect the new data.

The calculations underlying the proposed rule assumed an April 1, 2000, implementation date. Implementing the rule on July 1, 2000 will reduce the anticipated FY 2000 collections by $1,207,783. In FY 1999, the collections actually received totaled $13,038,181 instead of the $11,940,080 shown in the proposed rule as the estimated current annual collections. In the proposed rule, we based the estimated current annual collections and the projections for fiscal years 2000-2004 on FY 1998 collections and volumes, respectively. Total collections and volumes for FY 1999 were not available when the proposed rule was published. The following summary table shows annual expenses for providing import- and export-related services, current collections, increases in collections from the user fee changes, and projected reserve amounts.

Effects on Small Entities

User fee changes could affect some importers and exporters of live animals, animal products, birds, germ plasm, organisms, and vectors. Any of these importers or exporters whose annual sales total less than $5 million is a small entity according to the Small Business Administration (SBA). We do not have adequate information to determine the number of entities who import or export live animals and qualify as a small entity. Data from the 1995 Bureau of Census indicates that the majority of agricultural entities who deal in less valuable animals, such as feeding or slaughter animals, can be considered small. This may not be the case for entities dealing exclusively in more valuable animals. While there is a wide range in the size of entities who use our import- and export-related services, our experience shows that as many as 50 percent may be considered large.

The profit margins of some entities could decline as user fees for import- or export-related services are increased. However, the user fee increases are generally small in dollar value. Over the 5 years, more than 57 percent of the individual user fee increases are $1.00 or less, and more than 88 percent are less than $10.00. In addition, the user fees represent a small fraction of the value of the affected animals. Purchase and import costs for importing a breeding grade animal into the United States can range between $1500 and $5000 per head. Therefore, the user fee increases are not generally expected to reduce profits or impede imports or exports. Indeed, entities directly affected by this rule are not likely to bear the full burden of the user fee increases, as some of the cost increases are expected to be passed on to the purchasers of these imported or exported animals or animal products.

In our proposal, we solicited comments on the potential effects of the proposed action on small entities. In particular, we sought data and other information to help us better determine what effects, if any, this rule would have on the small entities mentioned above. We received no comments providing specific data in relation to the proposed rule's initial regulatory flexibility analysis, but commenters expressed concern that the proposal could negatively affect U.S. entities that export germ plasm by increasing their costs.

In our initial regulatory flexibility analysis, we agreed that the profit margins of some entities could decline as user fees for import- or export-related services increase under this rule. The commenters did not provide any data. Therefore, we are unable to determine with more specificity the effects of this rule on small or large entities that export germ plasm from the United States.

Alternatives

One alternative to this rule would be to make no changes to the current user fees. We do not consider making no changes to the current user fees a reasonable alternative because we would not recover the full cost of providing the import- and export-related services. Since 1992, Congress has not appropriated funds for these services; these services have been paid for through user fees charged to the customer or reimbursable agreements. Therefore, if we had chosen this alternative and made no changes to the current user fees, funds would not be available to continue to provide services at a level sufficient to meet customer demand.

Another alternative to this rule would be to either exempt small businesses from these user fees or establish a different user fee structure for small businesses. APHIS cannot exempt certain classes of users, such as small businesses, from the user fees, and cannot charge user fees that recover less than the full cost of providing the service. In addition, every business, including small businesses, using a government service needs to pay the cost of that service, rather than having other businesses pay a disproportionate share or passing those costs on to the general public, who are not the primary beneficiary of the service. Therefore, we do not consider exempting small businesses from these user fees or establishing a different user fee structure for small businesses as viable options.

Another alternative to the user fee changes in this rule would be to calculate the increases for the 5-year period and then spread the changes evenly in annual increments. The largest change from the current user fees to the FY 2000 user fees comes from the additional administrative support cost components: Rent, billing costs and collections expenses, and equipment capitalization. APHIS is already incurring these costs; therefore we need to recover these costs through user fees. If we had proposed these increases phased in over the 5-year period, it would benefit users in FY 2000 because they would not pay a large increase in the first year. However, most of these user fees have not been changed since FY 1996 and the current user fees no longer reflect the cost of providing import- and export-related services. Therefore, if we implemented this alternative, the user fees would still not accurately reflect the costs in FY 2000, and we would not recover the costs of providing import- or export-related services, so this option is not viable. We are offering a multi-year plan so that businesses will know the annual changes in advance and can incorporate them into their budgetary plans. The alternative would be to continue as we have with occasional large increases instead of the initial increase to bring the user fees up to the cost of providing services and implementing annual changes as we have in this document.

Cost Benefit Analysis

The benefit of user fees is the shift in the payment of services from taxpayers as a whole to those persons who are receiving the government services. While taxes may not change by the same amount as the change in user fee collections, there is a related shift in the appropriations of taxes to government programs, which allows those tax dollars to be applied to other programs that benefit the public in general. Therefore, there could be a relative savings to taxpayers as a result of the changes in user fees.

The administrative cost involved in obtaining these savings will be minimal. APHIS already has a user fee program and a mechanism for collecting user fees in place. This rule will update existing user fees in the system. Therefore, increases in administrative costs will be small. Because the savings are sufficiently large, and the administrative costs will be small, it is likely that the net gain in reducing the burden on taxpayers as a whole will outweigh the cost of administering the revisions of the user fees.

This rule contains no new information collection or recordkeeping requirements.

Executive Order 12988

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

Paperwork Reduction Act

This final rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The information collection requirements in 9 CFR part 130 have been approved by the Office of Management and Budget under OMB control number 0579-0094.

List of Subjects in 9 CFR Part 130

• Animals
• Birds
• Diagnostic reagents
• Exports
• Imports
• Poultry and poultry products
• Quarantine
• Reporting and recordkeeping requirements
• Tests

Accordingly, we are amending 9 CFR part 130 as follows:

PART 130—USER FEES

1. The authority citation for part 130 is revised to read as follows:

Authority: 5 U.S.C. 5542; 7 U.S.C. 1622; 19 U.S.C. 1306; 21 U.S.C. 102-105, 111, 114, 114a, 134a, 134c, 134d, 134f, 136, and 136a; 31 U.S.C. 3701, 3716, 3717, 3719, and 3720A; 7 CFR 2.22, 2.80, and 371.4.

2. Section 130.2 is amended as follows:

a. In paragraph (a), by revising the table.

b. In paragraph (b), by revising the table.

3. Section 130.3 is amended as follows:

a. In paragraph (a)(1), by revising the table.

b. By revising paragraph (c)(3).

4. Section 130.5 is revised to read as follows:

5. Section 130.6 is revised to read as follows:

6. Section 130.7 is revised to read as follows:

7. Section 130.8 is revised to read as follows:

(b) [Reserved]

(Approved by the Office of Management and Budget under control numbers 0579-0015, 0579-0040, 0579-0055 and 0579-0094)

8. Section 130.9 is removed and reserved.

9. Section 130.10 is amended as follows:

a. By revising paragraph (a).

b. By revising the table in paragraph (b).

c. By revising paragraph (d).

(b) * * *

(d) If the importer requests additional services, then the user fees for those services will be calculated at the hourly rate user fee listed in § 130.30, for each employee required to perform the service.

(Approved by the Office of Management and Budget under control number 0579-0094)

10. Section 130.11 is revised to read as follows:

11. Section 130.20 is amended as follows:

a. By revising the section heading.

b. In paragraph (a), by revising the table.

c. In paragraph (b)(1) introductory text, by adding the words “or vaccinations” after the word “tests” in the second sentence.

d. In paragraph (b)(1), by revising the table.

e. In paragraph (c), by removing the reference to “§ 130.21” and adding in its place a reference to “§ 130.30”.

(b)(1) * * *

12. Section 130.21 is removed and reserved.

13. A new § 130.30 is added to read as follows:

(9) Supervising loading and unloading of animals or birds for export shipment.

(10) Inspecting means of conveyance used to export animals or birds.

(11) Conducting inspections under part 156 of this chapter.

(12) Inspecting and approving an artificial insemination center or a semen collection center or the animals in it.

(13) Providing other import-or export-related veterinary services for which there is no flat rate user fee specified elsewhere in this part.

(b) When do I pay an additional amount for employee(s) working overtime? You must pay an additional amount if you need an APHIS employee to work on a Sunday, on a holiday, or at any time outside the normal tour of duty of that employee. Instead of paying the hourly rate user fee, you pay the rate listed in the following table for each employee needed to get the work done.

(Approved by the Office of Management and Budget under control numbers 0579-0055 and 0579-0094)

14. Section 130.50 is amended as follows:

a. By revising the paragraph (b)(3)(ii).

b. In paragraph (c)(2), by removing the reference to “§ 130.21” and adding in its place a reference to “§ 130.30”.

c. In paragraph (c)(5), by removing the reference to “§ 130.9” and adding in its place a reference to “§ 130.30”.