[Federal Register Volume 69, Number 134 (Wednesday, July 14, 2004)]
[Rules and Regulations]
[Pages 42089-42102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15878]



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Federal Register / Vol. 69, No. 134 / Wednesday, July 14, 2004 / 
Rules and Regulations

[[Page 42089]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Parts 1 and 2

[Docket No. 97-121-3]
RIN 0579-AA94


Animal Welfare; Inspection, Licensing, and Procurement of Animals

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: We are amending the Animal Welfare Act regulations to revise 
and clarify the exemptions from the licensing requirements, the 
procedures for applying for licenses and renewals, and the restrictions 
upon the acquisition of dogs, cats, and other animals. These actions 
are necessary to help ensure compliance with the regulations and the 
Animal Welfare Act.

DATES: Effective Date: August 13, 2004.

FOR FURTHER INFORMATION CONTACT: Dr. Barbara Kohn, Staff Veterinarian, 
Animal Care, APHIS, 4700 River Road Unit 84, Riverdale, MD 20737-1234; 
(301) 734-7833.

SUPPLEMENTARY INFORMATION:

Background

    The Animal Welfare Act (AWA) (7 U.S.C. 2131 et seq.) authorizes the 
Secretary of Agriculture to promulgate standards and other requirements 
governing the humane handling, housing, care, treatment, and 
transportation of certain animals by dealers, research facilities, 
exhibitors, carriers, and intermediate handlers. The Secretary of 
Agriculture has delegated the responsibility of enforcing the AWA to 
the Administrator of the Animal and Plant Health Inspection Service 
(APHIS). The regulations established under the AWA are contained in 
title 9 of the Code of Federal Regulations (9 CFR), chapter I, 
subchapter A, parts 1, 2, and 3. Part 1 defines various terms used in 
part 2. Part 2 (referred to below as the regulations) generally 
provides administrative requirements and sets forth institutional 
responsibilities of regulated persons under the AWA. These 
administrative requirements and institutional responsibilities include 
the requirements for the licensing and registration of dealers, 
exhibitors, and research facilities, and standards for veterinary care, 
identification of animals, and recordkeeping.
    On August 4, 2000, we published in the Federal Register (65 FR 
47908-47918, Docket No. 97-121-1) a proposal to amend the regulations 
by revising and clarifying the exemptions from the licensing 
requirements, the procedures for applying for licenses and renewals, 
and restrictions upon the acquisition of dogs, cats and other animals.
    We solicited comments concerning our proposal for 60 days ending on 
October 3, 2000. At the request of several commenters, we extended the 
comment period to November 20, 2000 (65 FR 62650, Docket No. 97-121-2). 
We received 395 comments by that date. They were from private citizens, 
professional organizations, licensees, and Congressional 
representatives.

General Comments

    A number of commenters offered general support for the proposed 
rule and APHIS' efforts to strengthen the licensing and renewal 
requirements. Many felt that these changes would help to improve 
conditions for the animals.
    Several commenters stated that the AWA is unconstitutional and that 
the Government should stay out of their private lives. Several 
commenters also stated that changes in the regulations are unnecessary 
and that we merely need to enforce the requirements already in place. 
We disagree. The United States Department of Agriculture (USDA) has a 
duty to implement and enforce the AWA. APHIS believes that the proposed 
changes will improve the implementation of the AWA.
    Several commenters stated that APHIS should not take on additional 
regulatory responsibilities until it is determined that there is 
sufficient manpower and budget to support the activity. One commenter 
expressed concern that APHIS had not considered how many additional 
entities would need to be licensed with the proposed regulation of 
small exotic or wild mammals. The commenter wondered if APHIS has the 
resources to handle these additional entities. We do not believe that 
implementing the changes we proposed will increase our workload under 
the AWA.
    One commenter stated that many people were not aware of the 
proposed rule, especially if they did not have access to the Internet, 
and several commenters requested a second extension of the comment 
period. As evidenced by the number and diversity of comments we 
received, we believe that we provided adequate notice and opportunity 
for comment.
    One commenter requested a personal reply. APHIS' policy is not to 
respond directly to individual commenters, but to take all comments 
into consideration and address them in another document published in 
the Federal Register, in this case, a final rule.
    Some commenters expressed concern that the proposed rule would put 
dog and cat dealers out of business, and they questioned why we 
regulate dogs and cats at all. The AWA specifically covers dogs and 
cats. APHIS does not believe that the proposed changes impose 
significant burdens.
    Several commenters argued that dogs and cats should not be used in 
research, and that budget issues for researchers should not be 
dictating regulations. The AWA specifically prohibits the USDA from 
dictating what research is done (7 U.S.C. 2143). If research is done 
using species covered by the AWA, the research facility must comply 
with the AWA and regulations.
    One commenter questioned why the proposed rule focused on dogs and 
cats when it had ``started out aimed at dangerous animals.'' Although 
we did propose changes to Sec.  2.131 related to experience and 
knowledge required by licensees who maintain wild or exotic animals, 
the focus of the proposed rule was not on dangerous animals. Rather, 
the proposed rule was designed to revise and clarify the exemptions 
from the licensing requirements, the procedures for applying for 
licenses and renewals, and the restrictions upon the acquisition of 
dogs, cats, and other animals.
    Based on the large number of inquiries concerning the scope and 
intent of the proposed rule, we wish to

[[Page 42090]]

clarify that the AWA and the regulations regulate the wholesale pet 
industry, not the retail pet industry. Sales by retail pet stores are 
not regulated. The term ``retail pet store'' is defined in Sec.  1.1 of 
the regulations as ``any outlet where only the following animals are 
sold or offered for sale, at retail, for use as pets: Dogs, cats, 
rabbits, guinea pigs, hamsters, gerbils, rats, mice, gophers, 
chinchilla, domestic ferrets, domestic farm animals, birds, and cold-
blooded species. Such definition excludes--(1) Establishments or 
persons who deal in dogs used for hunting, security, or breeding 
purposes; (2) establishments or persons exhibiting, selling, or 
offering to exhibit or sell any wild or exotic or other nonpet species 
of warmblooded animals (except birds), such as skunks, raccoons, 
nonhuman primates, squirrels, ocelots, foxes, coyotes, etc.; (3) any 
establishment or person selling warmblooded animals (except birds, and 
laboratory rats and mice) for research or exhibition purposes; and (4) 
any establishment wholesaling any animals (except birds, rats and 
mice). (5) Any establishment exhibiting pet animals in a room that is 
separate from or adjacent to the retail pet store, or in an outside 
area, or anywhere off the retail pet store premises.''

Requirements and Application--Exemptions From Licensing

    Many commenters addressed the proposed amendments to Sec.  
2.1(a)(3)(iii) and (iv), which concern exemptions from licensing 
requirements.
    In Sec.  2.1, proposed paragraph (a)(3)(iii) exempts from licensing 
any person who maintains a total of three or fewer breeding female 
dogs, cats, and/or small exotic or wild mammals, such as hedgehogs, 
degus, spiny mice, prairie dogs, flying squirrels, and jerboas, and who 
sells only the offspring of these dogs, cats, or small exotic or wild 
mammals, which were born and raised on his or her premises, for pets or 
exhibition, and is not otherwise required to obtain a license.
    Several commenters requested that we define ``small exotic or wild 
mammal.'' Some commenters requested a specific list of animals which 
would be considered small or exotic wild animals, and one commenter 
suggested that we identify general qualifications, such as adult size, 
to define these animals. One commenter expressed concern that these 
terms would create a loophole in the regulations.
    We listed in proposed Sec.  2.1(a)(3)(iii) some animals that we 
consider to be included in the term ``small exotic or wild mammal.'' 
This list merely identifies the types of animals normally considered to 
be in this category; it is not intended to be an exhaustive list. 
Including an exhaustive list would be difficult and counterproductive, 
since additions or deletions from such a list in the regulations would 
require rulemaking, and we cannot predict what animals may be marketed 
as pets in the future. Accordingly, we are making no changes based on 
these comments.
    Another commenter requested that we define ``breeding female.'' The 
commenter questioned whether an animal capable of reproducing would be 
considered the same way as a pregnant animal. For purposes of the AWA, 
``animal'' is defined in Sec.  1.1 as including any warm-blooded animal 
(not exempted elsewhere) that is used or intended for use in regulated 
activities. Consequently, if an animal is being kept to produce 
offspring for sale into the wholesale pet trade, for research, or for 
teaching or exhibition purposes, that animal will be considered covered 
under Sec.  2.1(a)(3)(iii), even if it is not pregnant or being bred 
during the current breeding cycle. This prevents a person from rotating 
animals in the breeding program to avoid licensing requirements. For 
these reasons, we are making no change based on this comment.
    One commenter suggested that APHIS exempt from licensing any person 
who maintains a total of five or fewer breeding female small exotic or 
wild mammals (commonly known as pocket pets). We proposed to amend 
Sec.  2.1(a)(3)(iii) to include in the exemption from licensing persons 
who maintain three or fewer breeding female pocket pets on a single 
premises because we do not believe that the risk associated with their 
maintenance warrants our inspection of the premises or requires the 
issuance of a license. We believe that the same provisions should apply 
to small exotic and wild animals as apply to dogs and cats. Therefore, 
we are making no change based on this comment.
    One commenter stated that legitimate breeders need more than three 
breeding females on the premises and that the proposed regulations 
harass and tax legitimate breeders, rather than regulating ``puppy 
mills.''
    The exemption for three or fewer breeding females is designed to 
exempt de minimis activities. Given that the average litter size for 
most dogs and cats is 3 to 8 offspring and each animal may have 1 to 2 
litters per year, we believe that wholesale dealers who maintain more 
than three breeding females on their premises need to be licensed and 
inspected.
    The current Sec.  2.1(a)(3)(iv) exempts from licensing any person 
who sells fewer than 25 dogs and/or cats per year, which were born and 
raised on his or her premises, for research, teaching, or testing 
purposes or to any research facility and is not otherwise required to 
obtain a license. The proposed rule did not create the exemption but 
merely clarified it so that persons acting in concert could not evade 
the limitation.
    A number of commenters argued that the limit for exemption from 
licensing should be reduced to three or fewer. Similar changes have 
been suggested in the past. However, since most dogs and cats have an 
average litter size of more than three animals, we believe such a 
provision would be unduly limiting. Individuals would be prohibited 
from selling even one litter a year for regulated purposes unless they 
were licensed under the AWA. Thus, a limit of three or fewer animals 
would not be a practical or enforceable requirement. The threshold of 
25 dogs or cats for licensure has been a regulatory provision for over 
15 years. In addition, one commenter argued that there is a disparity 
in the parameters used to determine activity thresholds for licensure, 
with no direct correlation between the provisions for 25 or fewer dogs 
or cats sold per year, 3 or fewer breeding females, and the $500 gross 
income from the sale of domestic animals for regulated purposes (see 
Sec.  2.1(a)(3)). We disagree. All of these provisions are designed to 
exempt de minimis activities. The exemption for 25 or fewer dogs or 
cats sold per year is directly related to the exemption for 3 or fewer 
breeding females since the average litter size for most dogs and cats 
is 3 to 8 offspring and each animal may have 1 to 2 litters per year 
(see Sec.  2.1(a)(3)(i) and (iii)). Furthermore, the exemption for the 
sale of any animal except wild or exotic animals, dogs, or cats is 
limited to $500 gross income per year (see Sec.  2.1(a)(3)(ii)). For 
these reasons, we are making no changes based on this comment.
    In Sec.  2.1, proposed paragraph (a)(3)(iii) states that the 
exemption from licensing does not extend to any person residing in a 
household that collectively maintains a total of more than three 
breeding female dogs, cats, and/or small exotic or wild mammals, 
regardless of ownership, nor to any person maintaining breeding female 
dogs, cats, and/or small exotic or wild mammals on premises on which 
more than three breeding female dogs, cats, and/or small exotic or wild 
mammals are maintained, nor to any person acting in concert with others 
where they collectively maintain a total of more than three breeding

[[Page 42091]]

female dogs, cats, and/or small exotic or wild mammals regardless of 
ownership. Similarly, proposed paragraph (a)(3)(iv) states that the 
exemption from licensing does not extend to any person residing in a 
household that collectively sells 25 or more dogs and/or cats, 
regardless of ownership, nor to any person acting in concert with 
others where they collectively sell 25 or more dogs and/or cats, 
regardless of ownership.
    One commenter expressed concern about the phrase ``acting in 
concert'' in proposed Sec. Sec.  2.1(a)(3)(iii) and 2.1(a)(3)(iv). 
Specifically, the commenter was concerned that breeders with partial 
ownership in a number of breeding animals would be considered to be 
``acting in concert'' with their partners and, therefore, would not be 
exempt from licensing.
    The proposed changes to Sec. Sec.  2.1(a)(3)(iii) and 2.1(a)(3)(iv) 
are designed to close a loophole in the regulations. Some individuals 
have contended that they are not required to have a license even when 
they keep more than three breeding female dogs and/or cats on the same 
premises as long as no single member of the household owns more than 
three. However, when several members of the same household (or other 
persons acting in concert) are maintaining breeding female dogs or cats 
on the same premises such that the number of breeding females in total 
is more than three, we believe that the activities are no longer de 
minimis and the dealers need to be licensed. For similar reasons, we 
believe that dealers need to be licensed if 25 or more dogs and/or cats 
are sold for research, teaching, or testing purposes per year from the 
premises or by members of the same household or other persons acting in 
concert, regardless of ownership. For these reasons, we are making no 
changes based on this comment.
    Currently, Sec.  2.1(b) provides that a person who is exempt from 
licensing under Sec.  2.1(a)(3)(iv) may apply for a voluntary license. 
Since this option has rarely been exercised, we proposed to eliminate 
this provision. We received several comments on this issue. All of the 
commenters supported our proposal to eliminate voluntary licenses.

Requirements and Application--Payment of Fees

    Currently, Sec.  2.1, paragraphs (d)(2), (e)(1), and (e)(2) 
(redesignated as (c)(2), (d)(1), and (d)(2) in this final rule) provide 
that a license will not be issued until payment has cleared normal 
banking procedures. We proposed to remove this provision. Commenters 
generally supported the issuance of a license when the fee is paid, 
rather than when a check clears. One commenter supported proposed Sec.  
2.1(d)(1) as long as it was understood that a returned or bounced check 
would result in denial of the license or renewal. We note that a 
returned check for a license or renewal will result in denial of the 
license or renewal.
    Several commenters also supported proposed provisions to submit 
fees for licenses to the appropriate Animal Care (AC) regional office, 
rather than the AC Regional Director, and to specify that the license 
fee is due on or before the date of expiration of the license.
    One commenter recommended that we allow fees for licenses and 
renewals to be paid by credit card. We currently allow fees to be paid 
with major credit cards. To clarify the available payment options, in 
this final rule, Sec.  2.1(d)(1) and Sec.  2.1(d)(2) provide that 
payment of fees for licenses and renewal of licenses, as well as for 
changes in class of license, can be made using a credit card, in 
addition to personal check, certified check, cashier's check, and money 
order. Regional offices can be contacted for details on these 
transactions.

Acknowledgment of Regulations and Standards

    We proposed to amend Sec.  2.2(b) to remove the provision stating 
that APHIS will supply copies of the regulations and standards to 
licensees as part of the license renewal process. We believed that most 
parties did not want or need these yearly copies. However, comments on 
this issue were split. Several commenters supported this provision as 
long as all regulated parties were notified of the changes in the 
rules, while other commenters thought that we needed to continue 
providing copies of the regulations and standards as part of the 
license renewal process.
    Currently, regional offices inform all licensees and registrants of 
all applicable regulatory changes. In addition, all AWA regulations and 
standards are available on the Internet at http://www.aphis.usda.gov/ac. To accommodate licensees and registrants who wish to continue to 
receive yearly copies of the regulations and standards, copies of the 
regulations and standards will be available from the regional offices 
upon request. We do not, however, plan to automatically send copies of 
this material each year. Therefore, we are making no changes to Sec.  
2.2(b) based on these comments.

Demonstration of Compliance With Standards and Regulations

    In Sec.  2.3, proposed paragraph (b) states that each applicant for 
an initial license must be inspected by APHIS and demonstrate 
compliance with the regulations and standards before APHIS will issue a 
license. If the first inspection reveals that the applicant's animals, 
premises, facilities, vehicles, equipment, other premises, or records 
do not meet the requirements of 9 CFR Chapter 1, subchapter A, APHIS 
will advise the applicant of existing deficiencies and the corrective 
measures that must be completed to come into compliance with the 
regulations and standards. An applicant who fails the first inspection 
will have two additional chances to demonstrate his or her compliance 
with the regulations and standards through a second inspection by 
APHIS. The applicant must request the second inspection, and if 
applicable, the third inspection, within 90 days following the first 
inspection. If the applicant fails inspection or fails to request 
reinspections within the 90-day period, he or she will forfeit the 
application fee and cannot reapply for a license for a period of 6 
months from the date of the failed third inspection or the expiration 
of the time to request a third inspection.
    One commenter suggested that APHIS should ensure that new licenses 
are not issued without careful scrutiny of the facility. The commenter 
asserted that a research facility, that identified itself as a pet 
shop, was issued a license.
    Before an initial license is issued, an applicant must be inspected 
by APHIS and demonstrate compliance with the regulations and standards. 
During the inspection, APHIS ascertains the nature of the operation and 
determines if the applicant needs to be licensed or registered. Under 
Sec.  2.30, a research facility must be registered, not licensed.
    Several commenters stated that we should allow only two 
prelicensing inspections per application while others stated the entire 
prelicensing period should be only 60 days in length. Most other 
commenters supported a time limit on the prelicensing process, although 
one commenter felt the timeframe should be extended to 6 months.
    A review of Animal Care records indicates that few applicants 
require three prelicensing inspections to complete the process, but 
even those applicants that require three prelicensing inspections 
usually complete the process within 90 days.
    We encourage applicants to establish contact and dialogue with 
their inspector prior to requesting a prelicensing inspection to make 
sure the facility is in compliance. It will not increase our regulatory 
burden to maintain the availability of three

[[Page 42092]]

prelicensing inspections. Additionally, the 90-day period will allow 
for most instances when inclement weather may delay completion of 
required alterations to a facility. Therefore, we are making no change 
based on these comments.
    Several commenters suggested that anyone who failed to complete or 
pass the prelicensing inspection process within the proposed timeframe 
should be required to wait 1 year, rather than 6 months, to reapply. 
The commenters provided no explanation to support the longer waiting 
period. To date, we have not experienced any significant enforcement 
problems related to the 6-month waiting period. Therefore, we are 
making no change based on these comments.
    One commenter requested that APHIS clarify Sec.  2.3(b) to indicate 
the application termination and waiting period if the applicant never 
requests reinspection. In Sec.  2.3, proposed paragraph (b) states that 
if the applicant fails inspection or fails to request reinspections 
within the 90-day period, he or she will forfeit the application fee 
and cannot reapply for a license for a period of 6 months from the date 
of the failed third inspection or the expiration of the time to request 
a third inspection. We believe that proposed Sec.  2.3(b) adequately 
describes the process for demonstrating compliance with the standards 
and regulations, and additional clarification is not necessary. 
Accordingly, we are making no change based on this comment.

Duration of License and Termination of License

    Currently, Sec.  2.5(a) provides that a license shall be valid and 
effective unless the license has been revoked or suspended pursuant to 
section 19 of the AWA, the license is voluntarily terminated upon 
request of the licensee, the license has expired or been terminated 
under the regulations, or the applicant has failed to pay the annual 
license fee.
    One commenter recommended amending Sec.  2.5(a) to provide that a 
license may be denied to a person who has not paid a monetary penalty 
assessed for AWA violations. Such a change would be impractical given 
due process considerations and provisions for monetary penalties to be 
deferred, suspended, or subject to a payment plan. Accordingly, we are 
making no change based on this comment.
    Currently, Sec.  2.5(b) provides that APHIS will notify a licensee 
by certified mail at least 60 days prior to the expiration date of the 
license. We proposed to eliminate this notification by certified mail.
    Several commenters requested that license renewal notices continue 
to be delivered via certified mail. These commenters were concerned 
that the notices would be lost in regular mail and noted that the cost 
of certified mail was not prohibitive. Another commenter stated that 
delivery of license renewal notices via regular mail was fine, but 
recommended that a second notice be sent as a backup in case the first 
notice was never delivered.
    We do not believe that using regular mail decreases our ability to 
communicate with licensees. All licensees rely on regular mail to run 
their businesses and all licensees are required to notify Animal Care 
of any change in address. Furthermore, expiration dates are printed on 
all license certificates and provide additional notice to the licensee. 
Therefore, we are making no change based on these comments.
    Current Sec.  2.5(c) provides that licensees must accept delivery 
of registered mail or certified mail notice and provide the AC Regional 
Director notice of their address in accordance with Sec.  2.1. However, 
since we proposed to eliminate notification by certified mail, this 
provision is no longer necessary and should have been removed in the 
proposed rule. Therefore, we are removing Sec.  2.5(c) in this final 
rule and redesignating paragraphs (d) through (f) as paragraphs (c) 
through (e), respectively.
    Several commenters stated that the provisions in proposed 
Sec. Sec.  2.1(d) and 2.5 related to payment of fees were confusing. 
The commenters noted that proposed Sec.  2.1(d)(1) provides that a 
returned check will be deemed nonpayment of fee and will result in the 
denial of the license; proposed Sec.  2.5(a)(4) provides that a license 
shall be valid and effective unless the annual license has not been 
paid, provided, however, that a grace period of 30 days is provided 
subject to the payment of a late payment fee of $25 and, if applicable, 
any fee for a check that has been returned unpaid; and proposed Sec.  
2.5(b) provides that a license will expire and automatically terminate 
if the annual license fee is not received by the appropriate AC 
regional office on or before the expiration date of the license. One 
commenter recommended removing the grace period from the regulations.
    We agree that the grace period provided for in proposed Sec.  
2.5(a)(4) is confusing in light of the language in proposed Sec.  
2.5(b), which provides that a license will be automatically terminated 
if the annual license fee is not received on or before the expiration 
date of the license. Initially, we had contemplated proposing a grace 
period for late payment of fees, and provisions for a grace period 
appeared in early drafts of the proposed rule. However, after further 
review, we elected not to propose a grace period for late payment of 
fees and the inclusion of the grace period provision in proposed Sec.  
2.5(a)(4) was an oversight. For this reason, we are removing the grace 
period provision in Sec.  2.5(a)(4) in this final rule.

Application and Annual License Fees

    We proposed to amend the regulations at Sec.  2.6, which set out 
annual license fees, to combine the $10 application fee for license 
renewals (or change of license class) with the annual license fee so 
that persons already licensed would need to submit only one check or 
money order annually. All commenters on this issue supported the 
proposed changes.

Licensees Whose Licenses Have Been Suspended or Revoked

    Currently, Sec.  2.10(a) provides that any person whose license has 
been suspended for any reason shall not be licensed in his or her own 
name or in any other manner within the period during which the order of 
suspension is in effect. Furthermore, no partnership, firm, 
corporation, or other legal entity in which any such person has a 
substantial interest, financial or otherwise, will be licensed during 
that period. We proposed to amend Sec.  2.10(a) by providing that no 
license will be renewed during the period that it is suspended.
    One commenter wondered whether, under Sec.  2.10, a license not 
renewed during a suspension of licensure is automatically terminated. 
The commenter stated a license should be terminated if the expiration 
date occurs during a period of suspension. A license suspension is not 
intended to be a license termination or denial. If a license expires 
during a suspension, the licensee must follow the renewal process when 
the suspension is lifted, and a decision will be made at that time 
about whether the license should be renewed. However, to clarify this 
issue, Sec.  2.10(a) in this final rule states that renewal of a 
license may be initiated during a suspension in accordance with 
Sec. Sec.  2.2(b) and 2.12.

Denial of Initial License Application

    Currently, Sec.  2.11(a) provides that a license will not be issued 
to any applicant who: (1) Has not complied with the requirements of 
Sec. Sec.  2.1, 2.2, 2.3, and 2.4 and has not paid the fees indicated 
in Sec.  2.6; (2) is not in

[[Page 42093]]

compliance with any of the regulations or standards in subchapter A; 
(3) has had a license revoked or suspended; (4) has been fined, 
sentenced to jail, or pled nolo contendere (no contest) under State or 
local cruelty to animal laws within 1 year of application; or (5) has 
made false or fraudulent statements, or provided any false or 
fraudulent records to the Department.
    We proposed to amend Sec.  2.11(a) by revising paragraphs (a)(4) 
and (a)(5) and adding a new paragraph (a)(6). These proposed paragraphs 
provided that a license will not be issued if the applicant: (4) Has 
pled nolo contendere (no contest) or has been found to have violated 
any Federal, State, or local laws or regulations pertaining to animal 
cruelty within 1 year of application, or after 1 year if the 
Administrator determines that the circumstances render the applicant 
unfit to be licensed; (5) is or would be operating in violation or 
circumvention of any Federal, State, or local laws; or (6) has made any 
false or fraudulent statements or provided any false or fraudulent 
records to the Department or other government agencies, or has pled 
nolo contendere (no contest) or has been found to have violated any 
Federal, State, or local laws or regulations pertaining to the 
transportation, ownership, neglect, or welfare of animals, or is 
otherwise unfit to be licensed, and the Administrator determines that 
the issuance of a license would be contrary to the purpose of the Act.
    A number of commenters recommended stricter conditions for 
licensure. To protect both animals and USDA inspectors, several 
commenters recommended permanent denial of a license to any convicted 
felon or the equivalent, or anyone convicted of animal cruelty. One 
commenter recommended that any person who violated any animal-related 
laws be denied a license and not be allowed to assist or participate 
with other persons to conduct regulated activities. Another commenter 
recommended that no corporation whose officer(s) were convicted of a 
felony should be licensed under the AWA. One commenter suggested we 
deny a license to any person that an animal registry body (e.g., 
American Kennel Club) finds in violation of its rules. Some commenters 
stated that individuals convicted of animal cruelty felonies or gross 
misdemeanors should be denied a license.
    The changes we proposed to Sec.  2.11(a) give the Administrator the 
broad discretion to deny a license to applicants who have pled nolo 
contendere to or have been found in violation of any Federal, State, or 
local laws or regulations pertaining to animal cruelty, or to 
transportation, ownership, neglect, or welfare of animals. Further, the 
proposed changes would authorize the Administrator to deny a license to 
anyone who has made false or fraudulent statements or provides false or 
fraudulent records to the Department or other government agencies, or 
is otherwise unfit to be licensed and the Administrator determines that 
the issuance of a license would be contrary to the purposes of the AWA. 
We do not believe that automatically excluding a convicted felon or 
someone convicted of a gross misdemeanor is necessary or appropriate. 
Similarly, we do not believe that automatically excluding someone who 
has violated an animal registry body's rules is necessary or 
appropriate. Furthermore, with regard to the commenters' concern for 
the safety of APHIS inspectors, we note that no inspector is required 
to inspect a premises alone. If an APHIS inspector has safety concerns, 
he or she may be accompanied by local law enforcement or other APHIS 
personnel. Therefore, we are making no changes in response to these 
comments.
    One commenter suggested that any conviction for animal cruelty, not 
just those in the last year, should be considered when determining 
license eligibility. We note that proposed Sec.  2.11(a)(4) provides 
that a license will not be issued to any applicant who has pled nolo 
contendere to or has been found in violation of any Federal, State, or 
local laws or regulations pertaining to animal cruelty within 1 year of 
application, or after 1 year if the Administrator determines that the 
circumstances render the applicant unfit to be licensed. Thus, we are 
making no changes based on this comment.
    Several commenters stated that license eligibility should not be 
based on past convictions because everyone deserves a second chance. 
The intent of the AWA is to provide for the humane care and treatment 
of all animals covered by the Act, and prior convictions for animal 
cruelty are germane to deciding the appropriateness of licensure. 
Accordingly, we are making no change in response to these comments.
    One commenter expressed concern that stipulation agreements would 
be considered nolo contendere pleas and, therefore, require automatic 
denial of a license or renewal of a license. This is not our intent. 
The provisions of any stipulation or consent decision document will 
specify the length of any revocation or suspension, if applicable to 
the agreement. The length of any such suspension or revocation will be 
adhered to during any application process. Such agreements will not be 
considered nolo contendere pleas that require automatic denial of 
licensure. Licenses will not be renewed during any period of suspension 
or revocation. Under these circumstances, we are making no changes in 
response to this comment.
    One commenter stated that APHIS should be clear that the proposed 
conditions for licensure in Sec.  2.11 also apply to judicial orders 
(i.e., a judicial order in which a person has to forfeit animals and/or 
is prohibited from owning animals in the future). In proposed Sec.  
2.11(a)(4), we provided that a license will not be issued if the 
applicant is unfit to be licensed and the Administrator determines that 
the issuance of a license would be contrary to the purposes of the AWA. 
Furthermore, in proposed Sec.  2.11(d), we provided that no license 
will be issued under circumstances that the Administrator determines 
would circumvent any order suspending, revoking, terminating, or 
denying a license under the AWA. These provisions would apply to 
judicial orders, including the judicial order described by the 
commenter. Therefore, we are making no change based on this comment.
    A number of commenters were concerned about the use of the term 
``unfit'' in Sec.  2.11(a). Several commenters requested that we define 
``unfit,'' perhaps with a list of what makes a person unfit to hold a 
license. Several commenters requested that we delete this term 
altogether. Other commenters questioned our authority to judge an 
individual and determine them to be ``unfit.''
    We are not making any changes based on these comments. The 
Administrator will assess the suitability, or ``fitness,'' of an 
applicant to provide for the humane care and treatment of animals as 
required by the AWA and regulations. Listing all possible reasons for 
this determination is not possible and any attempt to do so would 
remove necessary flexibility in decisionmaking. We note that any person 
denied a license can request a hearing to appeal the decision.
    One commenter expressed concern that proposed Sec.  2.11(a)(6) did 
not include the same 1-year disqualification from becoming licensed as 
Sec.  2.11(a)(4). Another commenter stated that Sec.  2.11(a)(6) was 
overly broad because violations of laws pertaining to ``ownership'' 
could refer to leash-law

[[Page 42094]]

violations, barking ordinance violations, etc. We realize that not 
every violation of law related to animals should disqualify a person 
from becoming licensed. That is why proposed Sec.  2.11(a)(6) calls for 
a determination that the issuance of a license would be contrary to the 
purposes of the AWA. For this reason, we are making no change based on 
these comments.
    We proposed in Sec.  2.11(b) that an applicant whose license 
application has been denied may request a hearing, and that the license 
denial shall remain in effect until the final legal decision has been 
rendered. Should the license denial be upheld, the applicant may again 
apply for a license 1 year from the date of the final order denying the 
application, unless the order provides otherwise.
    Several commenters recommended that a person denied a license be 
prevented from applying for another license for 1 year. Some commenters 
suggested even longer waiting periods before an applicant could reapply 
for a license. Requiring a time limit of 1 year before an application 
can be resubmitted has proven to be a reasonable time. We have not 
found a need to extend this period. After waiting a year, the applicant 
must go through the entire licensing process again, meeting all 
requirements. The applicant is again subject to all the provisions of 
Sec.  2.11. There is no guarantee of a license being issued after the 
1-year wait. Accordingly, we are making no changes based on these 
comments.
    Several commenters suggested replacing the phrase ``unless the 
order provides otherwise'' with the phrase ``unless the order provides 
for a longer period of time'' because an applicant should not be able 
to reapply for a license less than 1 year from the date of the denial. 
The language in proposed Sec.  2.11(b) is sufficient to indicate that 
an applicant whose license application has been denied may reapply for 
a license 1 year from the date of the final order denying the 
application, unless the hearing judge orders an extended period of 
license denial. While we recognize the commenters' concerns, a hearing 
judge may find that a shorter period of time is appropriate in a 
particular case. Therefore, we are making no change based on this 
comment.

Termination of a License

    In Sec.  2.12, we proposed that a license may be terminated for any 
reason that an initial license application may be denied pursuant to 
Sec.  2.11 after a hearing in accordance with the applicable rules of 
practice.
    One commenter suggested that all licenses for Class B dealers be 
revoked at the first sign of any AWA violation and the animals should 
be seized without prior notice or trial. The commenter also suggested 
that no appeals should be allowed for revocation of a license and that 
no family member of an individual whose license has been revoked should 
be granted a license.
    These recommendations would violate the principles of due process 
if implemented; therefore, we are making no change based on this 
comment. However, we note that we can prevent licensure of some persons 
if it is evident that such a licensure would circumvent provisions of 
the AWA and/or a revocation order (see Sec.  2.11(d) in this final 
rule).
    One commenter stated that we should not change Sec.  2.12, allowing 
for individual decisions to be made on a case-by-case basis. Another 
commenter stated that using the phrase ``or at any time'' gives us too 
much power to make denials permanent, perhaps disregarding the sincere 
commitment of a person to change. This commenter's main concern was 
that APHIS has too much power to make denials permanent.
    APHIS continues to look at cases on an individual basis, as 
warranted. The language in proposed Sec.  2.12 allows APHIS to more 
effectively enforce the AWA by allowing consideration of all salient 
factors during the licensing process. It should be remembered that 
anyone denied a license is entitled to appeal the decision at a 
hearing. This process protects applicants whose license applications 
have been denied. For these reasons, we are making no changes based on 
these comments.
    Several commenters requested that we clarify that a license renewal 
may be denied for the same reasons as an initial license application 
may be denied (i.e., a license terminated for the same reasons as an 
initial license application may be denied). One commenter requested 
that we clarify that a person's license would be revoked if the person 
were found guilty of violating animal cruelty laws. Another commenter 
suggested that convictions for breaking wildlife laws should also be 
included. Another commenter recommended that a license be terminated 
pending a hearing in order to encourage compliance with the regulations 
and provide an incentive to expedite hearings.
    These recommendations are already addressed by proposed Sec.  2.12, 
which provides that a license may be terminated, after a hearing, for 
any reason that an initial license application may be denied pursuant 
to Sec.  2.11. Therefore, we are making no changes based on these 
comments.
    Several commenters suggested adding criteria for renewal of 
licenses in Sec.  2.12. One commenter suggested that licenses should 
not be renewed if there were any AWA violations within the last 3 years 
and the facility had not been inspected within the last year. Another 
commenter suggested that no license should be renewed unless the 
facility was inspected and found compliant just prior to the renewal 
date.
    Enforcement of the AWA is based on random, unannounced inspections 
to determine compliance. In addition, APHIS uses a risk-based 
assessment to determine minimum inspection frequency. After inspection, 
all licensees are given an appropriate amount of time to correct any 
problems and become compliant. This cooperative system has been more 
effective than enforcement actions for each citation. Furthermore, a 
significant number of citations are for conditions that do not directly 
or immediately impact the health and well-being of the animals. It is 
unrealistic and counterproductive to make license renewal contingent on 
not having any citations. Accordingly, we are making no changes based 
on these comments.
    Several commenters supported the provisions for termination of 
licensing but expressed concern over the care of animals at facilities 
where such terminations were implemented. One commenter suggested that 
we perform additional inspections pending a termination hearing. Since 
we already take steps to ensure the humane care of animals in these 
circumstances (e.g., inspect and monitor animals and assist owners with 
placement of the animals), we are making no change based on these 
comments.

Access to Premises Provided by a Responsible Adult

    Section 2.126 sets forth the requirements concerning access and 
inspection of records and property. We proposed to amend Sec.  2.126(b) 
to add a provision that a responsible adult must be made available to 
accompany officials during the inspection process.
    Some commenters interpreted proposed Sec.  2.126(b) to mean that an 
adult needed to be at the facility at all times. They stated that this 
would pose an undue burden and cost on the operation. Several 
commenters suggested that, based on the assumption that proposed Sec.  
2.126(b) would require an adult onsite at all times, the inspector 
notify the licensee of the

[[Page 42095]]

inspection date or the licensee be required to inform the inspector of 
his/her availability on a given day. In contrast, one commenter stated 
that a responsible adult should be onsite at all times that animals 
were present. Some commenters stated that only the owner should 
accompany the APHIS inspector, while other commenters stated that the 
responsible adult listed on the application should accompany the 
inspector.
    We intended that a responsible adult be made available to accompany 
the APHIS inspector. This would not require that the adult be onsite at 
all times. The current regulations require that the licensee make the 
facility available for inspection during business hours, which is 
defined in Sec.  1.1 of the regulations to mean a reasonable number of 
hours between 7 a.m. and 7 p.m., Monday through Friday. Therefore, we 
are making no change based on these comments.
    Several commenters requested that we define ``responsible adult.'' 
It is the responsibility of the licensee to accommodate APHIS 
inspections, and if the owner(s) are not available, it is their 
responsibility to designate an adult to represent their interests with 
respect to the inspection. We believe that common usage of the term 
``responsible'' in relation to the licensed business is sufficient to 
define ``responsible adult.'' Therefore, we are making no change based 
on these comments.
    One commenter stated that APHIS inspectors should inspect the 
premises unaccompanied if no responsible adult is available. Another 
commenter noted that this would constitute an illegal search of the 
premises. We do not perform unaccompanied inspections for many reasons, 
including the safety of the inspector. Therefore, we are making no 
change based on these comments.
    Two commenters argued that no pictures should be taken during an 
inspection without the owner's permission. We did not propose to amend 
Sec.  2.126(a)(4) and (5), which state that APHIS inspectors may 
inspect and photograph the facilities, property, and animals and may 
document, by the taking of photographs and other means, conditions and 
areas of noncompliance. Taking photographs during routine inspections 
is sometimes necessary to document any noncompliant items and 
conditions. Accordingly, we are making no change based on these 
comments.

Handling of Animals

    We proposed adding a new requirement to Sec.  2.131 that all 
licensees who maintain wild or exotic animals must demonstrate adequate 
experience and knowledge of the species that they maintain. In the 
proposed rule, these animals were described as ``potentially 
dangerous.''
    One commenter stated that some of the terminology in Sec.  2.131 
was ambiguous; specifically, the commenter wondered if the proposed 
requirement related to all wild or exotic animals or only to 
potentially dangerous animals. The commenter suggested that, if the 
proposed requirement related to potentially dangerous animals, APHIS 
should use the phrase ``inherently dangerous animals'' instead of 
``potentially dangerous animals.'' The commenter noted that many 
species of animals can be regarded as potentially dangerous, but there 
are some species which pose an inherent threat.
    Proposed Sec.  2.131 is intended to apply to all wild or exotic 
animals, which include, but are not limited to, ``potentially dangerous 
animals.'' Therefore, we are making no change based on this comment.
    Most commenters supported the intent of proposed Sec.  2.131 but 
requested more information as to what constitutes ``adequate experience 
and knowledge.'' Commenters suggested that ``adequate experience and 
knowledge'' was equivalent to a minimum of 4 years of working with the 
species involved or 1,000 hours of hands-on experience with the 
species. One commenter said experience and knowledge of comparable 
species should be applicable to any requirement.
    We believe that this performance based standard will provide us 
with sufficient discretion to analyze each unique situation. Therefore, 
we are making no change based on these comments. However, we note that 
APHIS is currently examining this issue and will initiate rulemaking 
for any changes deemed appropriate.
    A commenter suggested that Sec.  2.131 should apply to registrants 
as well as licensees. The commenter noted that some registrants may 
also maintain wild or exotic animals.
    We do not believe it is necessary for proposed Sec.  2.131 to apply 
to registrants as well as licensees. Research facilities are already 
required to have an Institutional Animal Care and Use Committee that is 
qualified through experience and expertise to assess the facility's 
animal program. For this reason, we are making no change based on this 
comment.
    One commenter requested that we clarify who must have this 
experience (e.g., the licensee, trainer, handler, caretaker, staff, 
etc.) while another commenter recommended that APHIS clarify how the 
cumulative knowledge and experience of an institution's staff will be 
acknowledged.
    Institutions and corporations can only have knowledge and 
experience through the persons they employ or retain. We do not believe 
that it would be practical to attempt to specify how a licensee would 
possess and demonstrate adequate experience and knowledge. Accordingly, 
we are making no change based on these comments.
    One commenter noted that there may be instances where it would be 
impractical or impossible for an individual to obtain experience with a 
particular species of animal (e.g., when a zoo receives a species never 
before kept in captivity). The commenter recommended that APHIS 
consider the experience and knowledge of comparable species when 
determining if a person has adequate experience and knowledge of the 
species they maintain.
    In cases where it has been impractical or impossible for an 
individual to obtain experience and knowledge of a particular species, 
APHIS has historically considered the individual's experience and 
knowledge of comparable species. The Administrator will continue to 
make determinations regarding adequate experience and knowledge on a 
case-by-case basis. Accordingly, we are not making a change based on 
this comment.
    A commenter asked for clarification as to how the handling 
requirements in the proposed rule related to the recently published 
amendments to the marine mammal regulations (66 FR 239-257, Docket No. 
93-076-15) and the draft policy on training and handling of potentially 
dangerous animals (65 FR 8318-8321, Docket No. 97-001-4). The commenter 
expressed concern about APHIS applying the proposed handling 
requirements to exhibitors maintaining marine mammals since APHIS has 
previously treated marine mammals as ``wild animals.''
    This final rule and the marine mammal final rule address different 
aspects of AWA enforcement. This final rule relates to inspection, 
licensing, and procurement of animals, while the marine mammal final 
rule addresses the specific handling, care, and transportation needs of 
marine mammals. This final rule and the marine mammal final rule 
complement each other to ensure the humane care and treatment of 
animals covered by the AWA. As for the draft policy, APHIS will not be 
publishing or implementing a final policy statement on training and 
handling potentially dangerous animals because we have determined that 
any clarification of the regulations should be

[[Page 42096]]

accomplished through rulemaking (69 FR 30601, Docket No. 97-001-5).
    One commenter asserted that all photographic shoots and animal 
rides should be banned. It is beyond the scope of our authority to ban 
photographic sessions and animal rides. Therefore, we are making no 
change in response to this comment.

Procurement of Animals by Dealers

    Currently, Sec.  2.132 of the regulations concerns the procurement 
of random source dogs and cats by Class B dealers. We proposed several 
changes to Sec.  2.132 of the regulations to clarify these provisions.
    One commenter wanted us to include Class A dealers in proposed 
Sec.  2.132. Class A dealers breed and raise the animals they sell on 
their own premises. The proposal does include Class A dealers.
    One commenter suggested that we hold research facilities 
responsible for acquisitions from unlicensed persons and hold dealers 
responsible for purchases from ``bunchers.'' Although ``bunchers'' are 
not defined under the AWA, the term is commonly considered to mean 
parties that collect, gather, or aggregate animals from other sources 
for dealers. Dealers are already responsible for the actions of their 
employees and agents, however described. The proposed rule would 
prohibit dealers from acquiring animals through ``bunchers'' who are 
operating as unlicensed dealers. Therefore, we are making no change 
based on this comment.
    One commenter recommended that we retain the previous Sec.  
2.132(b), which defined random source animals. The definition of 
``random source'' animals may be found in Sec.  1.1 of the regulations. 
Therefore, we are making no change based on this comment.
    We proposed in Sec.  2.132(d) that no dealer or exhibitor shall 
knowingly obtain any dog or cat from any person who is not licensed, 
other than a pound or shelter, without obtaining a certification that 
the animals were born and raised on the person's premises and, if the 
animals are for research purposes, that the person has sold fewer than 
25 dogs and/or cats that year, or, if the animals are for use as pets, 
that the person does not maintain more than three breeding female dogs 
and/or cats.
    Several commenters supported this proposal, but recommended that we 
ensure that identification numbers or driver's license numbers are 
recorded on the certification statement and any other paperwork. 
Several commenters suggested that additional information be recorded, 
such as the animal descriptions/characteristics, phone number of 
seller, full name and address of seller. Other commenters suggested 
that, in addition to the certification statement, APHIS should require 
additional documentation (e.g., veterinary records, pictures, etc.) to 
verify ownership.
    As noted previously, we believe that the requirements in part 2 of 
the regulations are adequate for purposes of the AWA to establish 
ownership of animals. The name, address, and driver's license number of 
the seller are currently recorded on the acquisition/disposition 
records of the dealer, exhibitor, or research facility. It would be 
redundant to require such information on the certification statement. 
Furthermore, the information required in this final rule would be 
sufficient to initiate any formal investigations needed involving the 
dealers and/or the suppliers. For these reasons, we are making no 
changes based on these comments.
    One commenter wanted to make sure that the certification statement 
required in Sec.  2.35 was the same as in Sec.  2.132. Another 
commenter stated that the certification requirements in Sec.  2.35 
should be the same as those found in Sec.  2.133. The information 
requirements of Sec. Sec.  2.35, 2.132, and 2.133 are consistent and 
appropriate for the intended buyers and sellers. Therefore, we are 
making no changes based on these comments.
    One commenter stated that the current acquisition requirements in 
part 2 are unacceptable and negligent. The commenter suggested that 
APHIS attend each auction and cross-reference the names of persons 
observed selling animals with the forms submitted to APHIS for at least 
1 year. It is not feasible for APHIS to attend every auction and cross-
reference the names of persons observed selling animals with the forms 
submitted to APHIS. As previously noted, the current recordkeeping 
requirements, supplemented by the requirements in this rule, are 
designed to ensure that animals are legally acquired and can be traced 
back to their previous owners if necessary. Accordingly, we are making 
no change based on this comment.

Recordkeeping

    The regulations currently require dealers, exhibitors, operators of 
auction sales, brokers, and research facilities who acquire animals 
from persons who are not licensed to record the driver's license number 
of the person. We proposed to add provisions in Sec. Sec.  2.35(b)(3), 
2.75(a)(1)(iii), 2.75(b)(1)(iii), and 2.76(a)(4) to allow the use of 
officially issued photographic identification cards for nondrivers in 
lieu of a driver's license. Many commenters supported the proposal to 
allow the use of officially issued photographic identification cards in 
lieu of a driver's license.

Miscellaneous

    We proposed a number of minor changes to the regulations to reflect 
current APHIS form numbers, change references from Veterinary Services 
to Animal Care, correct grammar, and replace ``sector'' references with 
appropriate references to AC regional offices. We received one comment 
in support of these proposals. No negative comments were received. 
Therefore, we are making no changes in this final rule to the following 
sections: Sec. Sec.  2.35, 2.38, 2.75, 2.76, 2.78, and 2.102.
    We proposed in Sec.  2.38(k)(2), compliance with standards and 
prohibitions, that no person shall obtain live dogs or cats by use of 
false pretenses, misrepresentation, or deception. Several commenters 
supported or strongly agreed with this provision. Accordingly, we are 
making no changes in response to these comments.
    One commenter requested that the USDA exempt research facilities 
from having to be licensed as dealers if they buy, sell, trade, etc., 
animals incidental to research. We note that research facilities are 
not required to be licensed as dealers if they are buying animals, 
receiving or placing animals as donations, or trading animals with 
other research facilities. However, if a research facility is selling 
animals to other research facilities, pet stores, or for exhibition 
purposes, the research facility must be licensed as a dealer.
    Several commenters stated that health certificates for animals 
should be used to validate ownership and help prevent the spread of 
disease. We believe that the requirements in part 2 of the regulations 
for documenting ownership are adequate for purposes of the AWA to 
establish ownership of animals. A related comment proposed that all 
animals used in research be certified as to who bred and raised them, 
that they were voluntarily provided to the dealer, and that the 
original owners agreed to their use in research. However, we believe 
such certificates are unnecessary because the changes to Sec.  2.132, 
combined with the holding periods and other requirements of section 
2158 of the AWA and Sec.  2.101 of the regulations, provide sufficient 
safeguards. Accordingly, we are making no changes based on these 
comments.

[[Page 42097]]

    One commenter requested that we amend the licensing requirements to 
eliminate all Class B dealers. Class B dealers may acquire and sell 
animals. There are currently fewer than 30 Class B dealers who purchase 
and sell random source animals. The majority of Class B dealers do not 
engage in random source animal activities. Elimination of random source 
activity would require an amendment to the AWA and is beyond the scope 
of this rule.
    One commenter suggested that APHIS establish a definition for de 
minimis activity so that any retail pet store selling fewer than 50 
pocket pets per year that would not otherwise be required to be 
licensed would be exempt from regulation. The commenter maintained that 
the regulations unreasonably burden small businesses that are already 
subject to State and local regulations. The regulations provide that, 
unless exempt under Sec.  2.1, anyone selling any wild, exotic, or 
nonpet animals retail must have a license (Sec.  2.1(a)(3)(i)). While 
there may be multiple regulatory agencies affecting some businesses, 
these regulations cover persons who sell wild and exotic animals, which 
include pocket pets, under the AWA. Therefore, we are making no change 
based on this comment.
    One commenter asked about the identity of the ``Administrator.'' 
The Administrator is defined in Sec.  1.1 of the regulations and refers 
to the Administrator of APHIS or any other official of APHIS authorized 
to act for the Administrator of APHIS. Thus, although the term 
``Administrator'' is used in our regulations, reporting and 
recordkeeping documents are generally submitted to the regional 
offices. All questions concerning where documents should be submitted 
can be directed to the appropriate regional office.
    One commenter stated that the Animal Care Annual Report to Congress 
on the enforcement of the AWA uses the terms ``violation'' and 
``alleged violation'' interchangeably and cautioned us to make sure the 
terms are clear and consistent in Sec. Sec.  2.11 and 2.12. The term 
``alleged violation'' is not used in either section, only the phrases 
``operating in violation'' and ``found to have violated.''
    Another commenter requested a ``no trespassing-disease control'' 
regulation. However, such an activity is beyond the scope of the AWA 
and this rulemaking.
    One commenter suggested that enforcing existing temperature 
regulations would help control ``puppy mills.'' That issue is beyond 
the scope of this rulemaking.
    One commenter stated that the proposed rule contained no discussion 
of the paperwork burden or economic burden associated with the proposed 
changes. Those issues were discussed under the headings ``Paperwork 
Reduction Act'' and ``Executive Order 12866 and Regulatory Flexibility 
Act,'' respectively.
    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 performed a final 
regulatory flexibility analysis, which is set out below, regarding the 
economic effects of this rule on small entities. This discussion also 
serves as our cost-benefit analysis. A discussion of the comments 
received concerning the proposal is set forth in the sections analyzing 
the regulatory provisions.
    Under the Animal Welfare Act (7 U.S.C. 2131 et seq.), the Secretary 
of Agriculture is authorized to promulgate regulations governing the 
humane handling, housing, care, treatment, and transportation of 
certain animals by dealers, research facilities, exhibitors, carriers, 
and intermediate handlers.
    This rule will amend the Animal Welfare Act regulations in 9 CFR 
part 2 to revise and clarify the exemptions from the licensing 
requirements, the procedures for applying for licenses and renewals, 
and restrictions upon the acquisition of dogs and cats and other 
animals.
    Class A and B dealers, Class C exhibitors, registered exhibitors, 
research facilities, and individuals who are currently exempt from 
licensing are the entities that would be affected by this proposed 
rule. A Class A dealer breeds and raises animals to be sold for 
research, teaching, testing, experimentation, exhibition, or for entry 
into the wholesale pet trade. A Class B dealer is a person, including a 
broker and operator of an auction sale, whose business includes the 
purchase and/or resale of any animal. A Class C exhibitor or registered 
exhibitor is a person, including an animal act, carnival, circus, and 
public and roadside zoo, who shows or displays animals to the public. 
Research facilities include schools, institutions, organizations, or 
persons who use live animals in research, tests, or experiments.

Number of Breeding Females

    The regulations exempt from licensing any person who maintains a 
total of three or fewer breeding female dogs and/or cats and sells only 
the offspring of these dogs and/or cats for pets or exhibition. This 
rule will extend this exemption from licensing to any person who 
maintains a total of three or fewer breeding female small exotic or 
wild mammals and sells only the offspring of these small exotic or wild 
mammals for pets or exhibition. This rule will also clarify that the 
exemption applies only if a total of three or fewer breeding female 
dogs, cats, and/or small exotic or wild mammals, such as hedgehogs, 
degus, spiny mice, and prairie dogs, are maintained on a single 
premises, regardless of who owns the animals.
    Unlicensed individuals in this category primarily sell the 
offspring of their animals to pet stores and private citizens and their 
number and the quantity of their sales are unknown. The number of 
currently unlicensed individuals who will have to become licensed as a 
result of this rule is also unknown, although they are likely to be 
considered small entities. Those affected will either have to obtain a 
license and pay the associated fee,\1\ or reduce the number of breeding 
females on their premises to three or fewer. It is necessary that these 
individuals be regulated in order to ensure the welfare of the animals 
in these establishments.
---------------------------------------------------------------------------

    \1\ There is an application fee of $10 and an annual license 
renewal fee that is based on the annual commissions or fees of the 
dealer, but not less than $30.
---------------------------------------------------------------------------

    The extension of the licensing exemption to small exotic or wild 
mammals should have little impact. With the extension of this 
exemption, some breeders who are now licensed would no longer need to 
be licensed. However, because APHIS has only recently begun to require 
licenses for breeders of small exotic or wild mammals at all, only a 
small number of breeders would be affected. For that small number, 
there will be cost savings in the amount of the annual license fee that 
would no longer be required.

Dogs and Cats Sold Per Year From a Premises

    The regulations exempt from licensing any person who sells fewer 
than 25 dogs and/or cats per year for research, teaching, or testing 
purposes if the dogs and cats were born and raised on the person's 
premises. This rule will clarify that this exemption would apply

[[Page 42098]]

only if fewer than 25 dogs and/or cats are sold per year from the 
premises, regardless of who owns the dogs or cats. In addition to the 
existing requirement for dealers and research facilities to record 
information about an unlicensed seller, such as driver's license number 
and State, the rule will require the dealer or facility to obtain 
certification from the unlicensed seller that he/she is not required to 
be licensed or registered with APHIS.
    These changes would potentially affect four groups of entities: (1) 
Persons who are currently exempt from the licensing requirements; (2) 
licensed Class B dealers who acquire dogs and/or cats from persons 
exempt from licensing; (3) the research, testing, and education 
industries; and (4) Class C exhibitors who acquire dogs and/or cats 
from persons exempt from licensing.
    It is estimated that in fiscal year (FY) 2002 approximately 6,200 
dogs and cats \2\ used in the research, testing, and teaching 
industries were obtained from persons exempt from licensing. In FY 
2002, there were at least 248 exempt individuals who sold dogs and/or 
cats to Class B dealers. These exempt persons received, on average, $50 
for a dog and $25 for a cat. Based on these values, the total revenue 
of all exempted individuals in FY 2002 is estimated to have been 
$271,000. This rule will have little impact on these individuals. The 
required certification can be provided quickly and easily.
---------------------------------------------------------------------------

    \2\ Estimates are based on the following: In FY 2002 a total of 
68,253 dogs and 24,222 cats from all sources were used in registered 
research facilities. According to the National Association for 
Biomedical Research, about 30 percent of these dogs and cats are 
``random source''--those not bred exclusively for research. Dogs and 
cats supplied by exempt individuals are random source, and are 
supplied to research almost exclusively through Class B dealers. 
Class B dealers supplied approximately two-thirds of the random 
source dogs and cats used in research. Class B dealers supplied 
approximately two-thirds of the random source dogs and cats used in 
research. Class B dealers obtained approximately one-third of their 
animals from exempt sources.
---------------------------------------------------------------------------

    Class B dealers are the second group potentially affected by this 
rule. Nearly all dogs and cats supplied for use in the research 
industry by persons exempt from licensing were sold to the research 
industry through Class B dealers. Class B dealers obtain dogs and cats 
for sale to registered research facilities from pounds, Class A 
dealers, other Class B dealers, and persons exempt from licensing. The 
number of Class B dealers is limited and has been declining in recent 
years. We estimate that there were 18 Class B dealers supplying dogs 
and cats to research in 2002. In 2002, those 18 Class B dealers 
obtained approximately 6,200 dogs and cats from individuals who were 
exempt from licensing. This represents about a third of the dogs and 
cats Class B dealers provided to research.
    The impact of this rule on Class B dealers should be small. This 
rule requires little added time or effort on the part of the dealer. 
Obtaining certification will take very little time and will be added to 
the information the dealer is already collecting on unlicensed sellers. 
Class B dealers could lose a primary source of animals due to the 
clarification that the exemption applies to the premises, regardless of 
ownership, or if Class B dealers choose to avoid collecting the 
required certifications. If this should occur, Class B dealers would 
have to turn to other sources (i.e., licensed Class A dealers, pounds, 
or shelters) to obtain dogs and cats.
    Class B dealers most likely would not acquire animals from Class A 
dealers because of the higher cost. Class B dealers usually pay a 
person exempt from licensing approximately $50 for a dog and $25 for a 
cat. Class A dealers, who sell directly to research facilities, charge 
$300 to $500 per dog and slightly less per cat. Pounds and shelters may 
not be able to supply Class B dealers with the number of dogs and/or 
cats they need to maintain their current levels of operation. Nearly 
all of the dogs and cats supplied by persons exempt from licensing for 
use in the research industry were sold to the research industry through 
Class B dealers.
    The impact of this rule on research facilities will primarily 
depend on the rule's impact on Class B dealers. According to 
researchers, animals bred specifically for research are not suitable 
for all studies. Of the 92,475 dogs and cats used in research in FY 
2002, about 30 percent were random source animals, with about two-
thirds of those obtained from Class B dealers.\3\ Laws in many areas 
make Class B dealers the only viable source of these animals. Any 
increase in costs for the dogs and cats obtained by Class B dealers 
would likely be passed on to the research facilities that purchase the 
animals.
---------------------------------------------------------------------------

    \3\ Foundation for Biomedical Research.
---------------------------------------------------------------------------

    The impact of this rule on Class C exhibitors should be very small. 
This rule will require that exhibitors obtain a certification from 
unlicensed sellers that they are not required to be licensed or 
registered by APHIS, a small addition to the information the exhibitors 
must already collect. In addition, of the more than 2,000 licensed 
exhibitors, we are unaware of any which obtain dogs and/or cats from 
unlicensed individuals.

Clarification of the Regulations and Changes to Administrative 
Procedures

    This rule will make a number of changes to clarify the regulations 
and correct deficiencies we have found in enforcing the regulations. 
This rule will also amend a number of administrative procedures to make 
them more efficient. For instance, individuals applying for license 
renewal or change in license class will now be able to combine the 
license fee and application fee in a single form of payment. This rule 
should have little impact on licensees and should reduce APHIS' 
administrative burden.
    Other changes, such as the additional criteria for denial of an 
initial license and termination of a license, make it easier to prevent 
individuals who are unfit to hold licenses. These changes would not 
have a significant economic effect on affected entities because the 
changes should not alter the day-to-day operations for entities that 
are currently in compliance with the Act.

Impact on Small Entities

    The Regulatory Flexibility Act requires that we specifically 
consider the economic effects of this rule on small entities. As stated 
previously, the entities likely to be affected by this rule are Class A 
and B dealers, Class C exhibitors, registered exhibitors, research 
facilities, and individuals who are currently exempt from licensing.
    We have used all available data to estimate the potential economic 
effects of the amendments to 9 CFR part 2 on small entities. However, 
some of the data we believe would be helpful in making this 
determination has not been available. Specifically, data are not 
available on the number of individuals who would be affected by the 
changes in exemptions from the licensing requirements. In our proposed 
rule, we asked the public to provide such data. However, none of the 
comments we received addressed this economic issue.
    The Small Business Administration (SBA) has established size 
criteria by the North American Industry Classification System (NAICS) 
for determining which economic entities meet the definition of a small 
entity.
    According to the SBA, Class A dealers (NAICS 1129, other animal 
production \4\) with less than $0.75 million in annual receipts are 
considered small. According to the 1997 Census of Agriculture, more 
than 99 percent \5\ of

[[Page 42099]]

farms in other animal production would be considered small. The number 
of unlicensed individuals who will have to become licensed because they 
collectively maintain more than three breeding females in the same 
household, or collectively sell 25 or more dogs and/or cats, is 
unknown. Most of these unlicensed individuals would likely be small. 
However, these individuals will have to take the appropriate steps to 
meet the exemptions listed in Sec.  2.1 or they will have to become 
licensed.
---------------------------------------------------------------------------

    \4\ Establishments primarily engaged in raising animals and 
insects (except cattle, hogs and pigs, poultry, sheep and goats, 
animal aquaculture) for sale or product production.
    \5\ Other animal production is combined with animal aquaculture 
(NAICS 1125) in the Census table covering the market value of 
agricultural products sold by type of farm.
---------------------------------------------------------------------------

    Class B dealers (NAICS 422990, other miscellaneous nondurable goods 
merchant wholesalers) are considered to be small if the entity employs 
100 or fewer persons. According to the 1997 Census of Agriculture, more 
than 99 percent of these entities may be considered small. This rule 
will merely require Class B dealers to obtain a certification statement 
from unlicensed sellers, which is a small additional information 
collection requirement.
    According to the SBA, Class C and registered exhibitors (NAICS 
712130, zoos and botanical gardens, and NAICS 712190, nature parks and 
other similar institutions) are considered to be small if the entity 
has receipts of less than $5 million. According to the 1997 Economic 
Census, about 93 percent of these entities are considered small. There 
are over 2,500 exhibitors licensed by or registered with APHIS. 
However, we are unaware of any exhibitors who obtain dogs and/or cats 
from unlicensed individuals. Exhibitors who would deal with unlicensed 
individuals for dogs and/or cats would likely be small. However, this 
rule should have little impact on these exhibitors.
    In 2002, there were more than 1,100 active animal research 
facilities in the United States. The SBA standard for a small research 
or testing facility is one with fewer than 500 employees (NAICS 
5417102, research and development in life sciences). According to the 
1997 Economic Census, at least 94 percent of the facilities in this 
category meet the standard to be considered small. However, these 
facilities should be affected by this rule in only minor ways. The new 
requirement for a certification statement from unlicensed sellers 
should not affect these facilities because they do not acquire random 
source dogs and cats from unlicensed sources.
    In conclusion, we believe that the benefits of this rule, enhanced 
compliance with the AWA regulations, exceed the costs. While costs for 
some may increase--for example, the cost of random source animals used 
in research could increase because they become harder to obtain--we 
believe that the overall costs of this rule will be relatively small. 
License fees are relatively low, certifications can be provided quickly 
and easily, and information collection is a small addition to that 
already being collected. In addition, other changes should not alter 
the day-to-day operations of entities that are currently in compliance 
with the regulations. The primary benefit of the rule is enhanced 
animal welfare in keeping with the requirements of the AWA. Another 
benefit is a more competitive marketplace with clearer regulatory 
expectations.
    An alternative to this rule would be to make no change to the 
animal welfare regulations. After consideration, we rejected this 
alternative because we believe this rule is necessary to ensure 
compliance with the regulations and the Animal Welfare Act.
    This rule contains information collection requirements, which have 
been approved by the Office of Management and Budget (see ``Paperwork 
Reduction Act'' below). The effect of these information collection 
requirements is expected to be minimal, with the reporting burden for 
requesting reinspection and for certification of exemption from 
licensing both estimated to be 0.083 hours per response. The total 
estimated number of respondents is 500 and includes applicants, 
dealers, exhibitors, and research facilities.
    In addition, we have not identified any relevant Federal rules that 
are currently in effect that duplicate, overlap, or conflict with this 
rule.

Executive Order 12372

    This program/activity is listed in the Catalogue 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 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

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection or 
recordkeeping requirements included in this final rule have been 
approved by the Office of Management and Budget (OMB) under OMB control 
number 0579-0254.

Government Paperwork Elimination Act Compliance

    The Animal and Plant Health Inspection Service is committed to 
compliance with the Government Paperwork Elimination Act (GPEA), which 
requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible. For information pertinent to GPEA 
compliance related to this rule, please contact Mrs. Celeste Sickles, 
APHIS' Information Collection Coordinator, at (301) 734-7477.

List of Subjects in 9 CFR Parts 1 and 2

    Animal welfare, Pets, Reporting and recordkeeping requirements, 
Research.


0
Accordingly, we are amending 9 CFR parts 1 and 2 as follows:

PART 1--DEFINITION OF TERMS

0
1. The authority citation for part 1 continues to read as follows:

    Authority: 7 U.S.C. 2131-2159; 7 CFR 2.22, 2.80, and 371.7.


0
2. In Sec.  1.1, the definition of Administrator is revised to read as 
follows:


Sec.  1.1  Definitions.

* * * * *
    Administrator. The Administrator, Animal and Plant Health 
Inspection Service, or any person authorized to act for the 
Administrator.
* * * * *

PART 2--REGULATIONS

0
3. The authority citation for part 2 continues to read as follows:

    Authority: 7 U.S.C. 2131-2159; 7 CFR 2.22, 2.80, and 371.7.


0
4. Section 2.1 is amended as follows:
0
a. In paragraph (a)(1), the first sentence, by removing the word 
``desiring'' and adding in its place the word ``intending''.
0
b. In paragraph (a)(2), the last sentence, by removing the reference to 
``paragraph (d)'' and adding in its place a reference to ``paragraph 
(c)''.
0
c. By revising paragraphs (a)(3)(iii) and (a)(3)(iv) to read as set 
forth below.
0
d. By removing paragraph (b) and redesignating paragraphs (c), (d), 
(e), and (f) as paragraphs (b), (c), (d), and (e), respectively, and by 
revising newly

[[Page 42100]]

redesignated paragraphs (c) and (d) to read as set forth below.
0
e. By adding, at the end of the section, the following: ``(Approved by 
the Office of Management and Budget under control number 0579-0254)''.


Sec.  2.1  Requirements and application.

    (a) * * *
    (3) * * *
    (iii) Any person who maintains a total of three (3) or fewer 
breeding female dogs, cats, and/or small exotic or wild mammals, such 
as hedgehogs, degus, spiny mice, prairie dogs, flying squirrels, and 
jerboas, and who sells only the offspring of these dogs, cats, or small 
exotic or wild mammals, which were born and raised on his or her 
premises, for pets or exhibition, and is not otherwise required to 
obtain a license. This exemption does not extend to any person residing 
in a household that collectively maintains a total of more than three 
breeding female dogs, cats, and/or small exotic or wild mammals, 
regardless of ownership, nor to any person maintaining breeding female 
dogs, cats, and/or small exotic or wild mammals on premises on which 
more than three breeding female dogs, cats, and/or small exotic or wild 
mammals are maintained, nor to any person acting in concert with others 
where they collectively maintain a total of more than three breeding 
female dogs, cats, and/or small exotic or wild mammals regardless of 
ownership;
    (iv) Any person who sells fewer than 25 dogs and/or cats per year, 
which were born and raised on his or her premises, for research, 
teaching, or testing purposes or to any research facility and is not 
otherwise required to obtain a license. This exemption does not extend 
to any person residing in a household that collectively sells 25 or 
more dogs and/or cats, regardless of ownership, nor to any person 
acting in concert with others where they collectively sell 25 or more 
dogs and/or cats, regardless of ownership. The sale of any dog or cat 
not born and raised on the premises for research purposes requires a 
license;
* * * * *
    (c) A license will be issued to any applicant, except as provided 
in Sec. Sec.  2.10 and 2.11, when:
    (1) The applicant has met the requirements of this section and 
Sec. Sec.  2.2 and 2.3; and
    (2) The applicant has paid the application fee of $10 and the 
annual license fee indicated in Sec.  2.6 to the appropriate Animal 
Care regional office for an initial license, and, in the case of a 
license renewal, the annual license fee has been received by the 
appropriate Animal Care regional office on or before the expiration 
date of the license.
    (d)(1) A licensee who wishes a renewal must submit to the 
appropriate Animal Care regional office a completed application form 
and the annual license fee indicated in Sec.  2.6 by certified check, 
cashier's check, personal check, money order, or credit card. The 
application form and the annual license fee must be received by the 
appropriate Animal Care regional office on or before the expiration 
date of the license. An applicant whose check is returned by the bank 
will be charged a fee of $20 for each returned check. A returned check 
will be deemed nonpayment of fee and will result in the denial of the 
license. If an applicant's check is returned, subsequent fees must be 
paid by certified check, cashier's check, or money order.
    (2) A license fee indicated in Sec.  2.6 must also be paid if an 
applicant is applying for a changed class of license. The applicant may 
pay the fee by certified check, cashier's check, personal check, money 
order, or credit card. An applicant whose check is returned by a bank 
will be charged a fee of $20 for each returned check. If an applicant's 
check is returned, subsequent fees must be paid by certified check, 
cashier's check, or money order.
* * * * *

0
5. Section 2.2 is amended as follows:
0
a. By revising paragraph (b) to read as set forth below.
0
b. By adding, at the end of the section, the following: ``(Approved by 
the Office of Management and Budget under control number 0579-0254)''.


Sec.  2.2  Acknowledgment of regulations and standards.

* * * * *
    (b) Application for license renewal. APHIS will renew a license 
after the applicant certifies by signing the application form that, to 
the best of the applicant's knowledge and belief, he or she is in 
compliance with the regulations and standards and agrees to continue to 
comply with the regulations and standards. APHIS will supply a copy of 
the applicable regulations and standards to the applicant upon request.

0
6. Section 2.3 is amended as follows:
0
a. By revising paragraph (b) to read as set forth below.
0
b. By adding, at the end of the section, the following: ``(Approved by 
the Office of Management and Budget under control number 0579-0254)''.


Sec.  2.3  Demonstration of compliance with standards and regulations.

* * * * *
    (b) Each applicant for an initial license must be inspected by 
APHIS and demonstrate compliance with the regulations and standards, as 
required in paragraph (a) of this section, before APHIS will issue a 
license. If the first inspection reveals that the applicant's animals, 
premises, facilities, vehicles, equipment, other premises, or records 
do not meet the requirements of this subchapter, APHIS will advise the 
applicant of existing deficiencies and the corrective measures that 
must be completed to come into compliance with the regulations and 
standards. An applicant who fails the first inspection will have two 
additional chances to demonstrate his or her compliance with the 
regulations and standards through a second inspection by APHIS. The 
applicant must request the second inspection, and if applicable, the 
third inspection, within 90 days following the first inspection. If the 
applicant fails inspection or fails to request reinspections within the 
90-day period, he or she will forfeit the application fee and cannot 
reapply for a license for a period of 6 months from the date of the 
failed third inspection or the expiration of the time to request a 
third inspection. Issuance of a license will be denied until the 
applicant demonstrates upon inspection that the animals, premises, 
facilities, vehicles, equipment, other premises, and records are in 
compliance with all regulations and standards in this subchapter.

0
7. Section Sec.  2.5 is amended as follows:
0
a. By revising paragraphs (a)(4) and (b) to read as set forth below.
0
b. By removing paragraph (c) and redesignating paragraphs (d), (e), and 
(f) as paragraphs (c), (d), and (e), respectively.


Sec.  2.5  Duration of license and termination of license.

    (a) * * *
    (4) The annual license fee has not been paid to the appropriate 
Animal Care regional office as required. There will not be a refund of 
the annual license fee if a license is terminated prior to its 
expiration date.
    (b) Any person who is licensed must file an application for a 
license renewal and an annual report form (APHIS Form 7003), as 
required by Sec.  2.7 of this part, and pay the required annual license 
fee. The required annual license fee must be received in the 
appropriate Animal Care regional office on or before the expiration 
date of the license or the license will expire and automatically 
terminate. Failure to comply with the annual reporting requirements or 
pay the required annual license fee on or before the expiration date of 
the license

[[Page 42101]]

will result in automatic termination of the license.
* * * * *

0
8. In Sec.  2.6, paragraphs (a) and (c) are revised to read as follows:


Sec.  2.6  Annual license fees.

    (a) For an initial license, the applicant must submit a $10 
application fee in addition to the initial license fee prescribed in 
this section. Licensees applying for license renewal or changed class 
of license must submit only the license fee prescribed in this section. 
The license fee for an initial license, license renewal, or changed 
class of license is determined from table 1 or 2 in paragraph (c) of 
this section. Paragraph (b) of this section indicates the method used 
to calculate the license fee. All initial license and changed class of 
license fees must be submitted to the appropriate Animal Care regional 
office, and, in the case of license renewals, all fees must be received 
by the appropriate Animal Care regional office on or before the 
expiration date of the license.
* * * * *
    (c) The license fee shall be computed in accordance with the 
following tables:

   Table 1.--Dealers, Brokers, and Operators of an Auction Sale--Class
                         ``A'' and ``B'' License
------------------------------------------------------------------------
                                                              Annual or
                                          But not   Initial    changed
                  Over                     over     license    class of
                                                      fee    license fee
------------------------------------------------------------------------
$0.....................................      $500       $30          $40
500....................................     2,000        60           70
2,000..................................    10,000       120          130
10,000.................................    25,000       225          235
25,000.................................    50,000       350          360
50,000.................................   100,000       475          485
100,000................................  ........       750          760
------------------------------------------------------------------------


                Table 2.--Exhibitors--Class ``C'' License
------------------------------------------------------------------------
                                                              Annual or
                                                  Initial      changed
               Number of animals                license fee    class of
                                                             license fee
------------------------------------------------------------------------
1 to 5........................................          $30          $40
6 to 25.......................................           75           85
26 to 50......................................          175          185
51 to 500.....................................          225          235
501 and up....................................          300          310
------------------------------------------------------------------------

* * * * *

0
9. In Sec.  2.10, paragraph (a) is amended by adding two new sentences 
at the end of the paragraph to read as follows:


Sec.  2.10  Licensees whose licenses have been suspended or revoked.

    (a) * * * No license will be renewed during the period that it is 
suspended. Renewal of the license may be initiated during the 
suspension in accordance with Sec. Sec.  2.2(b) and 2.12.
* * * * *

0
10. Section 2.11 is amended as follows:
0
a. By revising paragraphs (a)(4) and (a)(5), and by adding a new 
paragraph (a)(6) to read as set forth below.
0
b. By revising paragraph (b) to read as set forth below.
0
c. By adding a new paragraph (d) to read as set forth below.


Sec.  2.11  Denial of initial license application.

    (a) * * *
    (4) Has pled nolo contendere (no contest) or has been found to have 
violated any Federal, State, or local laws or regulations pertaining to 
animal cruelty within 1 year of application, or after 1 year if the 
Administrator determines that the circumstances render the applicant 
unfit to be licensed;
    (5) Is or would be operating in violation or circumvention of any 
Federal, State, or local laws; or
    (6) Has made any false or fraudulent statements or provided any 
false or fraudulent records to the Department or other government 
agencies, or has pled nolo contendere (no contest) or has been found to 
have violated any Federal, State, or local laws or regulations 
pertaining to the transportation, ownership, neglect, or welfare of 
animals, or is otherwise unfit to be licensed and the Administrator 
determines that the issuance of a license would be contrary to the 
purposes of the Act.
    (b) An applicant whose license application has been denied may 
request a hearing in accordance with the applicable rules of practice 
for the purpose of showing why the application for license should not 
be denied. The license denial shall remain in effect until the final 
legal decision has been rendered. Should the license denial be upheld, 
the applicant may again apply for a license 1 year from the date of the 
final order denying the application, unless the order provides 
otherwise.
* * * * *
    (d) No license will be issued under circumstances that the 
Administrator determines would circumvent any order suspending, 
revoking, terminating, or denying a license under the Act.

0
11. A new Sec.  2.12 is added to read as follows:


Sec.  2.12  Termination of a license.

    A license may be terminated during the license renewal process or 
at any other time for any reason that an initial license application 
may be denied pursuant to Sec.  2.11 after a hearing in accordance with 
the applicable rules of practice.

0
12. Section 2.25 is amended by adding a new paragraph (c) to read as 
follows:


Sec.  2.25  Requirements and procedures.

* * * * *
    (c) No registrant or person required to be registered shall 
interfere with, threaten, abuse (including verbally abuse), or harass 
any APHIS official who is in the course of carrying out his or her 
duties.

0
13. Section 2.30 is amended by adding a new paragraph (d) to read as 
follows:


Sec.  2.30  Registration.

* * * * *
    (d) No research facility shall interfere with, threaten, abuse 
(including verbally abuse), or harass any APHIS official who is in the 
course of carrying out his or her duties.

0
14. Section 2.35 is amended as follows:
0
a. In paragraph (b), by removing the period at the end of paragraph 
(b)(7) and adding in its place a semicolon, and by adding a new 
paragraph (b)(8) to read as set forth below.
0
b. In paragraph (b)(3), by removing the word ``state'' each time it 
appears and adding the word ``State'' in its place, and by adding the 
words ``(or photographic identification card for nondrivers issued by a 
State)'' after the words ``driver's license number''.
0
c. In paragraph (d)(1), by removing the words ``/VS Form 18-1'' after 
``APHIS Form 7001'' and removing the words ``/VS Form 18-5'' after 
``APHIS Form 7005''.
0
d. In paragraph (d)(2), by removing the words ``/VS Form 18-1'' after 
``APHIS Form 7001'' and removing the words ``/VS Form 18-6'' after 
``APHIS Form 7006''.
0
e. By adding, at the end of the section, the following: ``(Approved by 
the Office of Management and Budget under control number 0579-0254)''.


Sec.  2.35  Recordkeeping requirements.

* * * * *
    (b) * * *
    (8) If dogs or cats are acquired from any person not licensed or 
registered under the Act and not a pound or shelter, the research 
facility must obtain a certification that the animals were born and 
raised on the person's premises and that the person has sold fewer than 
25 dogs and/or cats that year.
* * * * *

0
15. Section 2.38 is amended as follows:
0
a. In paragraph (h)(3), by removing the words ``/VS Form 18-1'' after 
``APHIS Form 7001''.

[[Page 42102]]

0
b. In paragraph (i)(3), by removing the words ``/VS Form 18-9'' after 
the words ``APHIS Form 7009''.
0
c. By revising paragraph (k)(2) to read as set forth below.


Sec.  2.38  Miscellaneous.

* * * * *
    (k) * * *
    (2) No person shall obtain live dogs or cats by use of false 
pretenses, misrepresentation, or deception.
* * * * *


Sec.  2.75  [Amended]

0
16. Section 2.75 is amended as follows:
0
a. In paragraphs (a)(2) and (a)(2)(i), by removing the words ``/VS Form 
18-5'' after ``APHIS Form 7005'' each time they appear and by removing 
the words ``/VS Form 18-6'' after ``APHIS Form 7006'' each time they 
appear.
0
b. In paragraph (a)(3), by removing the words ``/VS Form 18-1'' after 
``APHIS Form 7001''.
0
c. In paragraph (b)(2) by removing the words ``/VS Form 18-19'' after 
``APHIS Form 7019'' and by removing the words ``/VS Form 18-20'' after 
``APHIS Form 7020''.
0
d. In paragraphs (a)(1)(iii) and (b)(1)(iii) by removing the word 
``state'' each time it appears and adding the word ``State'' in its 
place, and by adding the phrase ``(or photographic identification card 
for nondrivers issued by a State)'' immediately following the words 
``driver's license number''.


Sec.  2.76  [Amended]

0
17. In Sec.  2.76, paragraph (a)(4) is amended by removing the word 
``state'' each time it appears and adding the word ``State'' in its 
place, and by adding the phrase ``(or photographic identification card 
for nondrivers issued by a State)'' immediately following the words 
``driver's license number''.


Sec.  2.78  [Amended]

0
18. In Sec.  2.78, paragraph (d) is amended by removing the words ``/VS 
Form 18-1'' after ``APHIS Form 7001''.


Sec.  2.102  [Amended]

0
19. In Sec.  2.102, paragraph (a)(3) is amended by removing the words 
``/VS Form 18-9'' after ``APHIS Form 7009''.

0
20. In Sec.  2.126, paragraph (b) is revised to read as follows:


Sec.  2.126  Access and inspection of records and property.

* * * * *
    (b) The use of a room, table, or other facilities necessary for the 
proper examination of the records and inspection of the property or 
animals must be extended to APHIS officials by the dealer, exhibitor, 
intermediate handler or carrier, and a responsible adult shall be made 
available to accompany APHIS officials during the inspection process.

0
21. In Sec.  2.131, paragraphs (a), (b), (c), and (d) are redesignated 
as paragraphs (b), (c), (d), and (e), respectively, and a new paragraph 
(a) is added to read as follows:


Sec.  2.131  Handling of animals.

    (a) All licensees who maintain wild or exotic animals must 
demonstrate adequate experience and knowledge of the species they 
maintain.
* * * * *

0
22. Section 2.132 is amended as follows:
0
a. By revising the section heading.
0
b. By removing paragraphs (b) and (c), redesignating paragraphs (d) and 
(e) as paragraphs (b) and (c), respectively, and by revising newly 
redesignated paragraph (b) to read as set forth below.
0
c. In newly designated paragraph (c)(3), by removing the words ``random 
source''.
0
d. By adding a new paragraph (d) to read as set forth below.
0
e. By adding, at the end of the section, the following: ``(Approved by 
the Office of Management and Budget under control number 0579-0254)''.


Sec.  2.132  Procurement of dogs, cats, and other animals; dealers.

* * * * *
    (b) No person shall obtain live dogs, cats, or other animals by use 
of false pretenses, misrepresentation, or deception.
* * * * *
    (d) No dealer or exhibitor shall knowingly obtain any dog, cat, or 
other animal from any person who is required to be licensed but who 
does not hold a current, valid, and unsuspended license. No dealer or 
exhibitor shall knowingly obtain any dog or cat from any person who is 
not licensed, other than a pound or shelter, without obtaining a 
certification that the animals were born and raised on that person's 
premises and, if the animals are for research purposes, that the person 
has sold fewer than 25 dogs and/or cats that year, or, if the animals 
are for use as pets, that the person does not maintain more than three 
breeding female dogs and/or cats.
* * * * *

    Done in Washington, DC, this 7th day of July, 2004.
Bill Hawks,
Under Secretary for Marketing and Regulatory Programs.
[FR Doc. 04-15878 Filed 7-13-04; 8:45 am]
BILLING CODE 3410-34-P