[Federal Register: December 9, 2002 (Volume 67, Number 236)]
[Rules and Regulations]
[Page 72827-72830]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09de02-1]
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Rules and Regulations
Federal Register
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[[Page 72827]]
DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
9 CFR Part 93
[Docket No. 02-024-1]
Stall Reservations at Import Quarantine Facilities
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Interim rule and request for comments.
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SUMMARY: We are amending the regulations regarding the importation of
horses into the United States by requiring persons who cancel
reservations for stall space at import quarantine facilities to notify
us earlier and by increasing the fee for canceling reservations. Under
the new fee structure, persons who cancel a reservation at least 30
business days prior to the reservation date will be charged 25 percent
of the reservation fee; persons who cancel a reservation 15 to 29
business days prior to the reservation date will be charged 50 percent
of the reservation fee; and persons who cancel a reservation less than
15 business days prior to the reservation date will forfeit 100 percent
of the reservation fee. We are taking this action to discourage
importers from reserving space that they may not use and canceling when
it is too late for others to use the space. We believe this action will
improve the occupancy rate of stall space, and, therefore, the
efficiency of import quarantine facilities.
DATES: This interim rule is effective December 9, 2002. We will
consider all comments that we receive on or before February 7, 2003.
ADDRESSES: You may submit comments by postal mail/commercial delivery
or by e-mail. If you use postal mail/commercial delivery, please send
four copies of your comment (an original and three copies) to: Docket
No. 02-024-1, Regulatory Analysis and Development, PPD, APHIS, Station
3C71, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state
that your comment refers to Docket No. 02-024-1. If you use e-mail,
address your comment to regulations@aphis.usda.gov. Your comment must
be contained in the body of your message; do not send attached files.
Please include your name and address in your message and ``Docket No.
02-024-1'' on the subject line.
You may read any comments that we receive on this docket in our
reading room. The reading room is located in room 1141 of the USDA
South Building, 14th Street and Independence Avenue SW., Washington,
DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through
Friday, except holidays. To be sure someone is there to help you,
please call (202) 690-2817 before coming.
APHIS documents published in the Federal Register, and related
information, including the names of organizations and individuals who
have commented on APHIS dockets, are available on the Internet at
http://www.aphis.usda.gov/ppd/rad/webrepor.html.
FOR FURTHER INFORMATION CONTACT: Dr. Andrea Morgan, Staff Veterinarian,
National Center for Import and Export, Technical Trade Services, VS,
APHIS, 4700 River Road Unit 39, Riverdale, MD 20737-1231; (301) 734-
8364.
SUPPLEMENTARY INFORMATION:
Background
The regulations in 9 CFR part 93 restrict the importation of
certain animals and animal products into the United States to prevent
the introduction of communicable animal diseases. Subpart C--Horses
(Sec. Sec. 93.300 through 93.326, referred to below as the
regulations), regulates the importation of horses into the United
States. Section 93.304 of the regulations contains, among other things,
specific provisions for reservation fees for space at quarantine
facilities maintained by the Animal and Plant Health Inspection Service
(APHIS).
Under the current regulations in Sec. 93.304(a)(3), the importer
or importer's agent must pay or ensure payment of a reservation fee for
each lot of horses to be quarantined in a facility maintained by APHIS.
The reservation fee is 100 percent of the cost of providing care, feed,
and handling during quarantine, as estimated by the quarantine
facility's veterinarian in charge. Any reservation fee will be
forfeited if the importer or the importer's agent fails to present for
entry, within 24 hours following the designated time of arrival, the
horse or horses for which the reservation was made. However, a
reservation fee will not be forfeited if written notice of cancellation
from the importer or the importer's agent is received by the office of
the veterinarian in charge of the quarantine facility during regular
business hours (8:00 a.m. to 4:30 p.m. (local time) Monday through
Friday, excluding holidays) no later than 5 business days prior to the
beginning of the time of importation as specified in the import permit
or as arranged with the veterinarian in charge of the quarantine
facility if no import permit is required. When a reservation is
canceled, a $40 cancellation fee is charged.
Recently, stall space for imported horses at the United States
Department of Agriculture (USDA) quarantine facilities has been in high
demand. Importers or their agents can sometimes expect to wait up to 2
to 4 months to obtain stall space. Some importers or their agents have
been making speculative reservations far in advance of the projected
date of arrival of the imported horses, and then canceling those
reservations with 5 business days notice if they have no horses to
import. While 5 business days' notice is what is required under the
regulations to avoid forfeiture of the total reservation fee, this
period does not allow sufficient time to offer the canceled space to
other prospective importers. Five business days also does not allow
sufficient time for another importer who might be able to make use of
the available stall space to make the necessary arrangements for
importing horses. We believe the current cancellation fee does not
provide sufficient deterrent against speculative reservations and does
not recover the fixed cost associated with operating quarantine
facilities when stall space goes unused.
Therefore, we are amending the regulations to establish a graduated
fee schedule for cancellations. Under this
[[Page 72828]]
schedule, the fee depends on when the reservations are canceled prior
to the reservation date. Persons who cancel a reservation 30 business
days or more prior to the reservation date will be charged 25 percent
of the reservation fee. Persons who cancel a reservation 15 to 29
business days prior to the reservation will be charged 50 percent of
the reservation fee. Persons who cancel a reservation less than 15
business days prior to the reservation date will forfeit 100 percent of
the reservation fee.
We believe that a cancellation fee of 100 percent of the
reservation fee is appropriate when a cancellation occurs less than 15
days prior to the expected date of arrival because it is rarely
possible to find other horses to take the space in that short a time.
It takes at least 15 days to prepare a horse for importation into the
United States. Brokers are required to have certain diagnostic tests
performed on their horses and these tests must be processed at National
Veterinary Services Laboratories. The reduced cancellation fees for
more notice reflects the increased likelihood of the space being
filled.
We are taking this action to discourage importers from reserving
space they may not use and cancelling when it is too late for others to
use the space. We believe this action will improve the occupancy rate
of stall space, and, therefore, the efficiency of the quarantine
facilities. Furthermore, the increased cancellation fee will recover a
larger portion of the fixed costs associated with operating quarantine
facilities when stall space goes unused.
Alternatives Considered
We considered an alternative in which APHIS would refund brokers
their cancellation fee if we were able to fill the stall space with
other horses. We also considered charging a set cancellation fee
greater than $40 per reservation regardless of when notice is provided.
We are not adopting these alternatives for the following reasons:
As noted, it is generally not feasible to fill spaces canceled
within 15 days. In cases where cancellation occurs 15 or more days in
advance, we may be able to fill the space. However, a refund procedure
would be very complex due to the nature of scheduling shipments and
arranging stall space. There are times when an entire shipment of 20
horses may be canceled and we may be able to fill only 10 of those
slots. There may also be times when the space that becomes available
may be inappropriate for a new shipment due to size or location of the
newly available stalls. In addition, we do not have the staffing or
infrastructure to track and control refunds, especially refunds that
must be prorated because there would not be an even exchange. We also
were concerned that providing refunds would mean that the fees would no
longer be a deterrent to canceling stall space for brokers who can
arrange for another importer to fill their canceled space. Such
arrangements also could limit which brokers might have an opportunity
to use the stall space.
Regarding the other alternative, which would set a flat fee of
above $40, we decided instead to establish a graduated fee schedule for
cancellations. Under this schedule, the fee would depend on when the
reservations were canceled prior to the reservation date, therefore,
there would be a greater deterrent to cancelling reservations close to
the reservation date, while the lower cancellation fees for more notice
reflects the increased likelihood, but no certainty, of the space being
filled.
Immediate Action
Immediate action is necessary to discourage importers from
reserving space that they may not use and canceling when it is too late
for others to use the space. APHIS put a freeze on taking reservations
for stall space from importers until this issue is resolved. Because we
wish to resume taking stall space reservations at these facilities by
December 2002, it is important to make this action effective as quickly
as possible. Under these circumstances, the Administrator has
determined that prior notice and opportunity for public comment are
contrary to the public interest and that there is good cause under 5
U.S.C. 553 for making this action effective less than 30 days after
publication in the Federal Register.
We will consider comments we receive during the comment period for
this interim rule (see DATES above). After the comment period closes,
we will publish another document in the Federal Register. The document
will include a discussion of any comments we receive and any amendments
we are making to the rule.
Executive Order 12866 and Regulatory Flexibility Act
This rule has been reviewed under Executive Order 12866. The rule
has been determined to be not significant for the purposes of Executive
Order 12866 and, therefore, has not been reviewed by the Office of
Management and Budget.
We are amending the regulations regarding the importation of horses
into the United States by requiring persons who cancel reservations for
stall space at import quarantine facilities to notify us earlier and by
increasing the fee for canceling reservations. Under the new fee
structure, persons who cancel a reservation at least 30 business days
prior to the reservation date will be charged 25 percent of the
reservation fee; persons who cancel a reservation 15 to 29 business
days prior to the reservation date will be charged 50 percent of the
reservation fee; and persons who cancel a reservation less than 15
business days prior to the reservation date will forfeit 100 percent of
the reservation fee. We are taking this action to discourage importers
from reserving space that they may not use and canceling when it is too
late for others to use the space. We believe this action will improve
the occupancy rate of stall space, and therefore the efficiency of
import quarantine facilities.
In 1999, the U.S. horse industry directly produced goods and
services of $25.3 billion and had a total economic impact of $112.1
billion on the U.S. gross domestic product.\1\ Racing, showing, and
recreation each contributed more than 25 percent to the total value of
goods and services produced by the industry. Activities related to the
horse industry generated approximately $1.9 billion in tax revenues,
most of which were generated in States where parimutuel betting was
allowed.\2\
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\1\ American Horse Counci, 2000 House Industry Statistics.
\2\ American Horse Council, the Economic Impact of the U.S.
Horse Industry, Executive Summary, Washington, DC January 2000.
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The horses quarantined at USDA's New York and Florida quarantine
facilities include horses that are valued at up to $1 million. The
average value of these horses in 2001 was $10,400 per horse. The number
and total value of horses imported into the United States has been
increasing over the last 8 years (table 1).
[[Page 72829]]
Table 1.--All Horse Import Values and Quantities
[Harmonized Schedule Code 0101]
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1993 1999 2001
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Value........................................................ $61,000,000 $326,000,000 $319,000,000
Quantity..................................................... 20,725 31,758 37,836
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Source: World Trade Atlas, United States--General Imports--Customs Value.
Due to this increase in imported horses and the limited space
available at USDA horse quarantine facilities, it is important that
reservation space be fully utilized.
Horses are quarantined at a USDA facility for either 3 or 7 days
before being cleared. European horses are quarantined for 3 days; South
American and Caribbean horses are quarantined for 7 days. The user fee
for a 3-day quarantine is $792 per horse. The user fee for a 7-day
quarantine is $1,556 per horse (Table 2).
Table 2.--Current Stall Fees for Imported Horses
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Equine stall
daily user fee
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1st through 3rd day (fee per day)....................... $264
4th through 7th day (fee per day)....................... 191
8th and subsequent days (fee per day.................... 162
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Daily user fee Oct. 1, 2002-Sept 30, 2003 (9 CFR 130.7).
Eighty to ninety percent of the quarantine reservations cancelled 5
business days before a reservation are not refilled. The 5-day period
does not allow sufficient time to find a replacement. The USDA
quarantine facilities in Florida and New York each lose approximately
$300,000-$470,000 each year in forgone user fees. In addition, the
horse industry as a whole incurs additional costs through delays in
being able to import horses. The result is fewer imports than would
otherwise occur.
The current practice of charging $40 for a cancellation allows
horse brokers to reserve stall space even before securing clients for
the space. Brokers with significant capital resources may make several
reservations and simply forfeit the $40 reservation fees if a client is
not found to fill them. This practice of reserving stall space before
securing a client has led to stall reservations being bartered on the
open market even though the program receives Federal funding. Some
brokers have complained that a $40 reservation fee is not an effective
deterrent to prevent brokers from reserving stall space before a client
is found.
The graduated fee schedule for canceled reservations will provide
greater deterrence against late cancellations. Under a graduated fee
schedule, brokers and horse owners will lose 25 percent of the
reservation fee if they cancel at least 30 days prior to the
reservation. Thirty days notice will provide opportunity for APHIS to
refill the stall space. Brokers and horse owners who cancel 15-29 days
prior to the reservation will lose 50 percent of the reservation fee.
Brokers and horse owners who cancel less than 15 days prior to the
reservation will be charged 100 percent of the reservation fee due to
the insufficient time to refill the stall space (Table 3).\3\
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\3\ While most equines undergo a 3 or 7 day quarantine, the new
graduated fee schedule will apply to all quarantine periods for
which user fees are charged under 9 CFR 130.2. Calculations of
graduated fee schedule: (GF) = ((a*d)+(b*d)+(c*d)) * Z, where a =
1st through 3rd day (fee per day) $264, b = 4th through 7th day (fee
per day) $191, c = 8th and subsequent days (fee per day) $162, d =
number of days, and Z = percentage determined from the cancellation
date prior to stall reservation 25% , 50% , and 100%.
Table 3.--Graduated Reservation Fees.
------------------------------------------------------------------------
3-day 7-day
Cancellation time period prior to quarantine quarantine
reservations cancellation cancellation
fee fee
------------------------------------------------------------------------
30 days or longer (25 percent).......... $198 $389
15-29 days (50 percent)................. 396 778
Less than 15 days (100 percent)......... 792 1,556
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Economic Efforts on Small Entities
Increasing the cancellation fee and the time-period required for
cancellation has potential to affect both horse owners and brokers.
Horse brokers who cancel space will incur additional cancellation fees.
While the cost of cancellations will most likely be borne by the horse
owners, the effects on those owners should be minimal compared to the
high values of the horses being quarantined.\4\
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\4\ SBA lists horse owners as small if they have less than
$750,000 per head in revenue (NAICS 112920). Census information is
not available for individual horse owners' sales.
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Under these circumstances, the Administrator of the Animal and
Plant Health Inspection Service has determined that this action will
not have a significant economic impact on a substantial number of small
entities.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule: (1) Preempts all State and local laws and
regulations that are in conflict with this rule; (2) has no
[[Page 72830]]
retroactive effect; and (3) does not require administrative proceedings
before parties may file suit in court challenging this rule.
Paperwork Reduction Act
This rule contains no new information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
List of Subjects in 9 CFR Part 93
Animal diseases, Imports, Livestock, Poultry and poultry products,
Quarantine, Reporting and recordkeeping requirements.
Accordingly, we are amending 9 CFR part 93 as follows:
PART 93--IMPORTATION OF CERTAIN ANIMALS, BIRDS, AND POULTRY, AND
CERTAIN ANIMAL, BIRD, AND POULTRY PRODUCTS; REQUIREMENTS FOR MEANS
OF CONVEYANCE AND SHIPPING CONTAINERS
1. The authority citation for part 93 is revised to read as
follows:
Authority: 7 U.S.C. 1622, 8303, 8306-8308, 8310, 8313, and 8315;
21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.
2. Section 93.304 is amended by revising paragraphs (a)(3)(iv) and
(a)(3)(vi), and by adding a new paragraph (a)(3)(vii) to read as
follows:
Sec. 93.304 Import permits for horses from regions affected with CEM
and for horse specimens for diagnostic purposes; reservation fees for
space at quarantine facilities maintained by APHIS.
(a) * * *
(3) * * *
(iv) Any reservation fee shall be forfeited if the importer or the
importer's agent fails to present for entry, within 24 hours following
the designated time of arrival, the horse for which the reservation was
made: Except that a reservation fee shall not be forfeited if the
Administrator determines that services, other than provided by
carriers, necessary for the importation of the horses within the
required period are unavailable because of unforeseen circumstances as
determined by the Administrator (such as the closing of an airport due
to inclement weather or the unavailability of the reserved space due to
the extension of another quarantine).
* * * * *
(vi) If a reservation is canceled, the importer or the importer's
agent will be charged a fee according to the following schedule:
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Cancellation date Fee
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30 or more days before the scheduled 25 percent of the reservation fee.
reservation date.
15-29 days before the scheduled reservation 50 percent of the reservation fee.
date.
Less than 15 days before the scheduled 100 percent of the reservation fee.
reservation date.
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(vii) If the reservation fee was ensured by a letter of credit, the
Department will draw the amount of the cancellation fee against the
letter of credit unless the cancellation fee is otherwise paid at least
3 days prior to the expiration date of the letter of credit.
* * * * *
Done in Washington, DC, this 4th day of December 2002.
Peter Fernandez,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 02-31009 Filed 12-6-02; 8:45 am]
BILLING CODE 3410-34-P