Brucellosis in Cattle and Bison; Payment of Indemnity

SUMMARY: We are increasing the amount of Federal indemnity for

brucellosis reactor and brucellosis-exposed cattle and bison destroyed

during herd depopulation, and are increasing the amount of Federal

indemnity for cattle and bison destroyed after being sold or traded

from a herd that is subsequently found to be affected with brucellosis.

These actions are necessary to give owners sufficient financial

incentive to promptly destroy brucellosis-affected cattle and bison, in

order to accelerate the eradication of brucellosis in the United States

and protect other cattle and bison from brucellosis.

DATES: Interim rule effective October 17, 1994. Consideration will be

given only to comments received on or before December 16, 1994.

ADDRESSES: Please send an original and three copies of your comments to

Chief, Regulatory Analysis and Development, PPD, APHIS, USDA, P.O.

Drawer 810, Riverdale, MD 20738. Please state that your comments refer

to Docket No. 94-093-1. Comments received may be inspected at USDA,

room 1141, South Building, 14th Street and Independence Avenue SW.,

Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday,

except holidays. Persons wishing to inspect comments are requested to

call ahead on (202) 690-2817 to facilitate entry into the comment

reading room.

FOR FURTHER INFORMATION CONTACT: Dr. M.J. Gilsdorf, National

Brucellosis Epidemiologist, Cattle Diseases and Surveillance Staff,

Veterinary Services, APHIS, USDA, room 731, Federal Building, 6505

Belcrest Road, Hyattsville, MD 20782, (301) 436-4918.

SUPPLEMENTARY INFORMATION:

Background

Brucellosis, also called Bang's disease or undulant fever, is a

serious infectious disease of cattle, bison, and other species,

including humans, caused by bacteria of the genus Brucella. Brucellosis

in cattle and bison is characterized by fever, sterility, slow

breeding, abortion, and loss of milk production. To help prevent the

spread of brucellosis, the regulations in 9 CFR part 51 (referred to

below as the regulations) provide for payment of Federal indemnity to

owners of certain animals destroyed because of brucellosis. The payment

of indemnity is intended to provide owners with financial incentive to

promptly destroy animals infected with or exposed to brucellosis.

Because the continued presence of brucellosis in a herd seriously

threatens the health of animals in that herd and other herds, the

prompt destruction of brucellosis-affected cattle or bison is critical

if brucellosis eradication efforts in the United States are to succeed.

Under Sec. 51.3(a)(2)(i) of the regulations, the Administrator of

the Animal and Plant Health Inspection Service may authorize the

payment of Federal indemnity by the United States Department of

Agriculture to any owner whose herd of cattle or bison is destroyed

because of brucellosis. Section 51.3(a)(2)(ii) of the regulations sets

forth the amount of Federal indemnity that will be paid for such cattle

and bison. Under the regulations prior to the effective date of this

interim rule, in all of the United States except Alaska, Hawaii, Puerto

Rico, and the Virgin Islands of the United States, the amount of

Federal indemnity paid per animal could not exceed $250 for any

registered cattle or nonregistered dairy cattle, $150 for any

nonregistered cattle other than dairy cattle, and $150 for any bison.

In Alaska, Hawaii, Puerto Rico, and the Virgin Islands of the United

States, the amount of Federal indemnity could not exceed $250 for any

cattle or bison.

The rates for indemnity payments prior to this interim rule have

made a number of owners reluctant to destroy their herds, due to the

financial loss that could result from selling an animal at slaughter

prices, rather than breeding prices. For instance, in 1993, the

slaughter value of nonregistered cattle other than dairy cattle

averaged approximately $475 per head, whereas the cost of replacing

such an animal for breeding averaged close to $770 per head. Therefore,

even by combining slaughter value with the $150 Federal indemnity

payment, an owner suffered a significant loss per head when

depopulating. Owners of dairy cattle experienced even greater losses

when depopulating. Combining the average slaughter value of

approximately $475 and the Federal indemnity payment of $250 provided

an owner with approximately $725 per head, compared to approximately

$1,160 in replacement cost.

The reluctance of some owners to depopulate their herds resulted in

increased exposure of cattle and bison to infected animals and

increased incidence of brucellosis infection. This, in turn, has

resulted in increased brucellosis eradication costs.

Therefore, in this interim rule, we are increasing the amount of

indemnity that will be paid for cattle and bison destroyed during herd

depopulation. Under this interim rule, in States other than Class Free

States, the amount of Federal indemnity shall not exceed $250 for any

nonregistered cattle other than dairy cattle, and $250 for any bison.

For any registered cattle, nonregistered dairy cattle, or, in Class

Free States, any cattle or bison from herds affected with brucellosis,

the amount of Federal indemnity shall not exceed the lesser of 95

percent of appraised value, minus salvage value, or $750. These rates

shall apply to brucellosis reactor cattle and bison, as well as to

other sexually intact cattle and bison in the herd. (See discussion

below under the heading ``Brucellosis-Exposed Female Calves.'') The

appraisal is to be conducted by an independent appraiser assigned by

the Administrator. The higher indemnity rates for nonregistered cattle

other than dairy cattle in Class Free States are necessary to ensure

that brucellosis is not spread in those States that have been freed of

the disease.

Additionally, we will pay these new rates to owners who have

brucellosis-exposed cattle or bison destroyed that were previously sold

or traded from a herd that, subsequent to the sale or trade, is found

to be affected with brucellosis. On April 26, 1994, we published in the

Federal Register (59 FR 21634-21635, Docket No. 93-023-2) a final rule

that provided for payment of indemnity for the destruction of such

animals. The amount of indemnity was the same as that provided for

cattle and bison destroyed as part of herd depopulation under

Sec. 51.3(a)(2)(ii). Providing for payment of indemnity for these

animals was considered necessary to help protect the herd to which the

cattle or bison were moved, by encouraging prompt destruction of

potentially infected additions to the herd. In order to provide owners

with the financial incentive to destroy such potentially infected

cattle and bison, we are amending Sec. 51.3(a)(4) to provide the same

rates of indemnity for these cattle and bison as for cattle and bison

destroyed as part of herd depopulation.

Brucellosis-Exposed Female Calves

We are also amending Sec. 51.3 to raise the maximum allowable

indemnity payment for exposed female calves destroyed during herd

depopulation. Prior to the effective date of this interim rule, the

regulations provided that the Administrator could authorize the payment

of Federal indemnity of not more than $50 per head to any owner whose

exposed female calf or calves were destroyed because of brucellosis.

(Under Sec. 51.1 of the regulations prior to the effective date of this

interim rule, exposed female calf meant ``a female bovine less than 6

months of age which is nursed by a brucellosis reactor at the time such

reactor is condemned.'')

The indemnity rate for exposed female calves was lower than that

for older cattle due to the relatively low value of calves. However,

this relatively low rate has discouraged owners from considering whole

herd depopulation. Therefore, to encourage the prompt destruction of

all potentially infected animals in a herd, we are amending

Sec. 51.3(a)(3) to provide that the maximum $50 indemnity payment for a

female calf exposed to brucellosis does not apply to female calves that

are destroyed during herd depopulation. The indemnity for exposed

female calves destroyed during herd depopulation will be the same as

that for other cattle and bison included in herd depopulation.

Also, in this interim rule, we are amending Sec. 51.3(a)(3) of the

regulations to clarify that indemnity payments for exposed female

calves shall apply only to sexually intact female calves. Female

bovines that are not sexually intact are not capable of transmitting

brucellosis, and their destruction is not necessary to prevent the

spread of the disease. Our policy, therefore, has been not to pay

indemnity for female calves that are not sexually intact. We are adding

a definition of sexually intact exposed female calf to Sec. 51.1 to

mean a female bovine less than 6 months of age that is nursed by a

brucellosis reactor at the time such reactor is condemned, and that has

not been altered to make it incapable of reproduction. Because

brucellosis is a disease of sexually intact animals, steer calves,

which have been castrated, do not pose a risk of transmitting

brucellosis. Because male calves can be more easily altered than female

calves, and it is economically more advantageous to owners to alter

such male calves than to have them destroyed, the regulations do not

specifically address the destruction of exposed male calves.

Acceleration of Brucellosis Eradication

We estimate that, under the indemnity payment rates provided for

prior to the effective date of this interim rule, it would have taken 6

to 12 years to reach the goal of complete eradication of brucellosis

from domestic cattle and bison in the United States, with a cost to the

Federal Government of between $14,619,000 and $25,975,000. In contrast,

because the provisions of this interim rule will encourage the rapid

depopulation of herds known to be affected with brucellosis, and

therefore increase program effectiveness, total eradication of

brucellosis from domestic cattle and bison could be accomplished by

1998, with projected costs of approximately $3,290,000. Thus, we expect

the approximate cost savings to the Federal Government from the

accelerated program to be between $11.3 million and $22.7 million.

Immediate Action

The Administrator of the Animal and Plant Health Inspection Service

has determined that there is good cause for publishing this interim

rule without prior opportunity for public comment. Immediate action is

necessary to prevent the spread of brucellosis that might occur if

owners of cattle and bison were to cease entirely the depopulation of

herds affected with the disease.

Under normal conditions, owners of cattle and bison affected with

brucellosis are most willing to depopulate their herds in the fall,

because steer calves are usually old enough to wean in the fall, and

depopulating in the fall saves the expense of buying feed for the

winter. However, if the increase in indemnity payments provided for in

this rule were to be effected using proposed rulemaking, owners, in

anticipation of an increase, would likely refuse to depopulate until

the rule is made final. This would cause a cessation of the

depopulation of affected herds for several months, which would

seriously hinder eradication efforts and increase the risk of the

spread of brucellosis.

Because prior notice and other public procedures with respect to

this action are impracticable and contrary to the public interest under

these conditions, we find good cause under 5 U.S.C. 553 to make it

effective upon publication in the Federal Register. We will consider

comments that are received within 60 days of publication of this rule

in the Federal Register. After the comment period closes, we will

publish another document in the Federal Register. It will include a

discussion of any comments we receive and any amendments we are making

to the rule as a result of the comments.

Executive Order 12866 and Regulatory Flexibility Act

This interim rule has been reviewed under Executive Order 12866.

The rule has been determined to be not significant for purposes of

Executive Order 12866, and, therefore, has not been reviewed by the

Office of Management and Budget.

In this interim rule, we are increasing the amount of Federal

indemnity for brucellosis reactor and brucellosis-exposed cattle and

bison destroyed during herd depopulation, and are increasing the amount

of Federal indemnity for cattle and bison destroyed after being sold or

traded from a herd that is subsequently found to be affected with

brucellosis. Under this interim rule, in States other than Class Free

States, the amount of Federal indemnity shall not exceed $250 for any

nonregistered cattle other than dairy cattle, and $250 for any bison.

For any registered cattle, nonregistered dairy cattle, or, in Class

Free States, any cattle or bison from herds affected with brucellosis,

the amount of Federal indemnity shall not exceed the lesser of 95

percent of appraised value, minus salvage value, or $750. Prior to this

interim rule, indemnity paid per animal could not exceed $250 for any

registered cattle or nonregistered dairy cattle, $150 for any

nonregistered cattle other than dairy cattle, and $150 for any bison.

In Alaska, Hawaii, Puerto Rico, and the Virgin Islands of the United

States, the amount of Federal indemnity could not exceed $250 for any

cattle or bison.

In 1993, beef and cull dairy cows sold for slaughter brought an

average of $476 per 1,000-pound animal. The replacement cost of a steer

or heifer averaged $768 in 1993, while a dairy herd replacement cow

averaged $1,160.

Under Federal regulations, owners cannot be required to depopulate

their herds because of brucellosis. However, because having diseased

animals and/or having a herd under quarantine creates a severe

competitive disadvantage for an owner, we expect the increase in

indemnity rates provided for in this interim rule to encourage more

owners to agree to whole herd depopulation.

As of June 30, 1994, there were 204 herds under quarantine for

brucellosis. These include 200 beef herds with a total of approximately

10,000 head of cattle and 4 dairy herds with a total of about 5,000

head. All of the owners of the beef herds that are under quarantine,

but none of the owners of the dairy herds, can be considered small

entities (annual gross receipts of $0.5 million or less, according to

Small Business Administration size standards). There are no registered

herds under quarantine. The approximately 15,000 head of cattle under

quarantine represent less than .015 percent of the total cattle

population in the United States.

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 12372

This program/activity is listed in the Catalog of Federal Domestic

Assistance under No. 10.025 and is subject to Executive Order 12372,

which requires intergovernmental consultation with State and local

officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12778

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. This rule (1) Preempts all State and local laws and

regulations that are in conflict 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 document contains no information collection or recordkeeping

requirements under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501

et seq.).

List of Subjects in 9 CFR Part 51

Animal diseases, Cattle, Hogs, Indemnity payments, Reporting and

recordkeeping requirements.

Accordingly, 9 CFR part 51 is amended as follows:

PART 51--ANIMALS DESTROYED BECAUSE OF BRUCELLOSIS

1. The authority citation for part 51 continues to read as follows:

Authority: 21 U.S.C. 111-113, 114, 114a, 114a-1, 120, 121, 125,

134b; 7 CFR 2.17, 2.51, and 371.2(d).

2. Section 51.1 is amended by removing the definition of exposed

female calf, and adding a definition of sexually intact exposed female

calf, in alphabetical order, to read as follows:

Sec. 51.1 Definitions.

* * * * *

Sexually intact exposed female calf. A female bovine less than 6

months of age that is nursed by a brucellosis reactor at the time such

reactor is condemned, and that has not been altered to make it

incapable of reproduction.

* * * * *

3. In Sec. 51.3, paragraph (a)(1), the second sentence is amended

by removing the words ``The indemnity'' and adding in their place the

words ``Except for cattle and bison destroyed as part of whole herd

depopulation in accordance with paragraph (a)(2)(i) of this section,

the indemnity''; paragraph (a)(2)(i) is amended by removing the last

sentence; paragraph (a)(2)(ii) is revised to read as set forth below;

paragraph (a)(3) is amended by revising the third sentence to read as

set forth below; and, in paragraph (a)(4), the fourth and fifth

sentences are removed and three new sentences are added in their place

to read as set forth below.

Sec. 51.3 Payment to owners for animals destroyed.

* * * * *

(a) * * *

(2) * * *

(ii) Amount of Federal indemnity. Payments of Federal indemnity

shall be made at the rates in effect at the time the Administrator

approves depopulation for the herd. In States other than Class Free

States, the amount of Federal indemnity shall not exceed $250 for any

nonregistered cattle other than dairy cattle, and $250 for any bison.

For any registered cattle, nonregistered dairy cattle, or, in Class

Free States, any cattle or bison from herds affected with brucellosis,

the amount of Federal indemnity shall not exceed the lesser of 95

percent of appraised value, minus salvage value, or $750. The appraisal

shall be conducted by an independent appraiser assigned by the

Administrator.

(3) * * * Except for sexually intact exposed female calves

destroyed as part of herd depopulation under paragraph (a)(2)(ii) of

this section, the indemnity for sexually intact exposed female calves

destroyed because of brucellosis shall not exceed $50 per head. * * *

(4) * * * In States other than Class Free States, the amount of

Federal indemnity shall not exceed $250 for any nonregistered cattle

other than dairy cattle, and $250 for any bison. For any registered

cattle, nonregistered dairy cattle, or, in Class Free States, any

cattle or bison from herds affected with brucellosis, the amount of

Federal indemnity shall not exceed the lesser of 95 percent of

appraised value, minus salvage value, or $750. The appraisal shall be

conducted by an independent appraiser assigned by the Administrator. *

* *

* * * * *

Done in Washington, DC, this 11th day of October 1994.

Lonnie J. King,

Acting Administrator, Animal and Plant Health Inspection Service.

[FR Doc. 94-25610 Filed 10-14-94; 8:45 am]

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