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Rules and Regulations Federal Register Vol. 78, No. 181

Wednesday, September 18, 2013

This section of the FEDERAL REGISTER and be exempt from the licensing and requirements and sets forth institutional contains regulatory documents having general inspection requirements if he or she responsibilities for regulated parties; applicability and legal effect, most of which sells only the offspring of those animals and part 3 contains specifications for are keyed to and codified in the Code of born and raised on his or her premises, the humane handling, care, treatment, Federal Regulations, which is published under for pets or exhibition. This exemption and transportation of animals covered 50 titles pursuant to 44 U.S.C. 1510. applies regardless of whether those by the AWA. The Code of Federal Regulations is sold by animals are sold at retail or wholesale. Part 2 requires most dealers to be the Superintendent of Documents. Prices of These actions are necessary so that all licensed by APHIS; classes of new books are listed in the first FEDERAL animals sold at retail for use as pets are individuals who are exempt from such REGISTER issue of each week. monitored for their health and humane licensing are listed in paragraph (a)(3) of treatment. § 2.1. DATES: Effective Date: November 18, Since the AWA regulations were DEPARTMENT OF AGRICULTURE 2013. issued, most retailers of pet animals have been exempt from licensing by FOR FURTHER INFORMATION CONTACT: Animal and Plant Health Inspection Dr. virtue of our considering them to be Service Gerald Rushin, Veterinary Medical ‘‘retail pet stores’’ as defined in § 1.1 of Officer, Animal Care, APHIS, 4700 River the AWA regulations. 9 CFR Parts 1 and 2 Road Unit 84, Riverdale, MD 20737– Because the previous definition of 1236; (301) 851–3751. [Docket No. APHIS–2011–0003] retail pet store in the AWA regulations SUPPLEMENTARY INFORMATION: covered nearly all retail outlets, retailers RIN 0579–AD57 I. Purpose of the Regulatory Action selling animals by any means, including sight unseen sales conducted over the Animal Welfare; Retail Pet Stores and Need for the Regulatory Action Internet or by mail, telephone, or any Licensing Exemptions The Animal Welfare Act (AWA or the other method where customers do not AGENCY: Animal and Plant Health Act, 7 U.S.C. 2131 et seq.), seeks to personally observe the animals available Inspection Service, USDA. ensure the humane handling, care, for sale prior to purchasing and/or ACTION: Final rule. treatment, and transportation of certain taking custody of them, were considered animals that are sold at wholesale and to be retail pet stores and as such had SUMMARY: We are revising the definition retail for use in research facilities, for been exempt from licensing and of retail pet store and related regulations exhibition purposes, or for use as pets inspection under § 2.1(a)(3)(i) and in order to ensure that the definition of by means of Federal licensing and § 2.1(a)(3)(vii).1 retail pet store in the regulations is inspection. When Congress passed the With the growth of the Internet in the consistent with the Animal Welfare Act AWA in 1966, it specifically exempted 1990s, technology brought with it new (AWA), thereby bringing more pet retail pet stores from such licensing and and unforeseen opportunities to buy animals sold at retail under the inspection. At that time, retailers of pets and sell pets. More retailers began protection of the AWA. Specifically, we covered under the exemption consisted offering pets for sale sight unseen and are narrowing the definition of retail pet mostly of traditional ‘‘brick-and-mortar’’ to sell and ship them nationwide. While store to mean a place of business or pet stores, as well as small-scale pet animals were sometimes sold sight residence at which the seller, buyer, and breeders whose place of business was unseen via telephone and mail order the animal available for sale are typically their residence. Both types of decades before passage of the AWA, the physically present so that every buyer retail outlets were exempted by the Internet has made it possible for many may personally observe the animal prior AWA as ‘‘retail pet stores’’ because, more persons throughout the United to purchasing and/or taking custody of despite the many dissimilarities in how States to buy pets online from retailers that animal after purchase, and where pet shops and small-scale residential without ever having to be physically only certain animals are sold or offered breeders conduct business, they share in present at the seller’s place of business for sale, at retail, for use as pets. Retail common a business model in which or residence and personally observe the pet stores are not required to be licensed buyers visit their places of business and animals offered for sale as the AWA and inspected under the AWA. In personally observe the animals available intended. With the dramatic rise in sight addition, we are removing the limitation for sale prior to purchasing and/or unseen sales have come increasing on the source of gross income from the taking custody of them. complaints from the public about the licensing exemption in the regulations Enforcement of the Act has been lack of monitoring and oversight of the for any person who does not sell or delegated by the Secretary of health and humane treatment of those negotiate the sale of any wild or exotic Agriculture to the Animal and Plant animals. animal, dog, or cat and who derives no Health Inspection Service (APHIS) of In order to ensure that the definition more than $500 gross income from the the United States Department of of retail pet store in the AWA sale of the animals other than wild or Agriculture (USDA). APHIS has issued regulations is consistent with the AWA exotic animals, dogs, or cats during any regulations pursuant to the Act; these and that all animals sold at retail for use calendar year. We are also increasing regulations, which we refer to below as from three to four the number of the AWA regulations, are found in 9 1 Both the retail pet store exemption in § 2.1(a)(3)(i) and the direct retail sales exemption in breeding female dogs, cats, and/or small CFR parts 1, 2, and 3. Part 1 contains § 2.1(a)(3)(vii) derive their authority from the AWA exotic or wild mammals that a person definitions for terms used in parts 2 and exemption for retail pet stores. We discuss this at may maintain on his or her premises 3; part 2 provides administrative greater length later in this document.

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as pets are monitored for their health purebred dog or cat fanciers, who carrying a zoonotic disease is reduced and humane treatment, we published in maintains a total of four or fewer with adequate veterinary care, including the Federal Register (77 FR 28799– breeding female dogs, cats, and/or small vaccinations. To the extent that 28805, Docket No. APHIS–2011–0003), exotic or wild mammals, and who sells, improved oversight reduces the on May 16, 2012, a proposal 2 to revise at retail, only the offspring of these likelihood of pet-to-human transmission the definition of retail pet store and dogs, cats, and/or small exotic or wild of zoonotic diseases such as rabies, the related regulations to bring more pet mammals, which were born and raised public as a whole will benefit from the animals sold at retail under the on his or her premises, for pets or rule. The rule will also address the protection of the AWA. This rule exhibition, and is not otherwise competitive disadvantage of retail finalizes that proposed rule while also required to obtain a license, is also breeders who incur certain costs by making changes to its provisions based considered a retail pet store for adhering to AWA standards while retail on the comments we received (see the regulatory purposes. breeders who do not operate their section below titled ‘‘Summary of the • Explaining in detail the effects of facilities according to AWA standards Major Provisions of the Regulatory the proposed provisions on cat and may bear lower costs. Action’’). rabbit breeders. There is a great deal of uncertainty surrounding the number of facilities that III. Costs and Benefits Legal Authority for the Regulatory will be affected by this rule, as we Action The benefits of this rule justify its acknowledged in the proposed rule, and Under the AWA, the Secretary of costs. More pet animals sold at retail as evidenced in the public comments. Agriculture is authorized to promulgate will be brought under the protection of There are hundreds of distinct dog standards and other requirements the AWA and monitored for their health breeds, and correspondingly large governing the humane handling, care, and humane treatment. Improved numbers of dog breeders in the United treatment, and transportation of certain animal welfare will benefit buyers of States. Breeders with an online presence animals by dealers, research facilities, pets and the general public in various are those most likely to be selling the exhibitors, operators of auction sales, ways. Monitoring the health and offspring sight unseen and thus are and carriers and intermediate handlers. humane treatment of pet animals should more likely to be affected by this rule. As we mentioned previously in this reduce the number of pets receiving We estimate that there could be between document, the Secretary has delegated inadequate care and reduces the 8,400 and 15,000 such breeders in the responsibility for administering the possibility of sick or injured pet animals United States. This estimate is based on AWA to the Administrator of APHIS. being purchased sight unseen. When a the assumption that for every five Within APHIS, the responsibility for buyer receives a sick or abused pet breeders identified by APHIS in online administering the AWA has been animal, sight unseen, the responsibility breeder registries there is one other delegated to the Deputy Administrator for correcting inadequate care has been breeder that has not been identified who for Animal Care. effectively transferred from the seller to also uses remote marketing methods. the buyer without the buyer’s However, this rule will only affect II. Summary of the Major Provisions of knowledge or consent. If that buyer is those dog breeders who sell dogs as the Regulatory Action unable or unwilling to provide the pet pets, not for hunting, security, breeding, Key Changes to the Proposed Rule animal with needed care, a shelter may or other purposes; who maintain more become the default caregiver for that than four breeding females on their Based on the comments we received animal. A reduction in the number of property; and whose buyers are not all and our own reevaluation of the sick or abused pet animals received by physically present to observe the proposed rule, we are finalizing the buyers may reduce the number of such animals prior to purchase and/or to take proposed rule with the following key animals sent to shelters. Public shelters custody of that animal after purchase. changes to its provisions: • provide for the care of these unwanted When these conditions are taken into Revising our proposed definition of pet animals, usually at local taxpayer account, we estimate that there are retail pet store so that it means a place expense. Also, as noted by several between 2,600 and 4,640 dog breeders of business or residence (not necessarily commenters, neglected or abused pet that may be affected by this rule. that of the seller’s) at which the seller, animals confiscated from substandard The rule will also affect cat breeders buyer, and the animal available for sale breeding operations are often sent to who maintain more than four breeding are physically present so that every shelters to provide for their care. Newly females at their facilities and sell the buyer may personally observe the regulated commercial breeders working offspring as pets, sight unseen. Fewer animal available for sale prior to to comply with AWA regulations will than 2 percent of cats in the United purchasing and/or taking custody of that increase the health and well-being of the States are purebred and raised by animal after purchase and where only pet animals under their care. breeders. We estimate that about 325 cat certain animals are sold or offered for In addition, when breeding operations breeders may be affected by this rule. sale, at retail, for use as pets. • for which regulatory oversight is The rule will also affect rabbit Amending the exemption from insufficient fail to adequately provide breeders who sell the offspring as pets, licensing for persons maintaining four veterinary care for their animals, the sight unseen, which is not a common or fewer breeding females in buyer may subsequently incur greater practice because rabbits are usually sold § 2.1(a)(3)(iii) to apply only to costs associated with providing that care face-to-face at auctions, exhibits, and wholesalers (for whom the exemption because needed care has been delayed. fairs where buyers are physically was originally intended). • The rule will benefit buyers of animals present. We estimate that no more than Restoring and amending the by providing regulatory oversight to 75 rabbitries may be affected by this exemption in § 2.1(a)(3)(vii) so that any ensure that breeders provide necessary rule. person including, but not limited to, veterinary care. Newly regulated breeders will be Animals can carry zoonotic diseases subject to licensing, animal 2 To view the proposed rule, its supporting identification and recordkeeping documents, and the comments we received, go to (diseases that can be transmitted http://www.regulations.gov/ between, or are shared by animals and requirements. In addition, affected #!docketDetail;D=APHIS-2011-0003. humans). The possibility of an animal entities will be subject to standards for

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facilities and operations, animal health rule are already substantially in and 213,000 signatures on petitions and husbandry, and transportation. One compliance. submitted by organizations supporting set of costs attributable to the rule will Based on our experience regulating or opposing the proposed rule. The be incurred annually by all newly wholesale breeders, the most common comments were from animal welfare regulated entities, such as licensing fees. areas of regulatory noncompliance at organizations, kennel clubs, breed Other costs will depend on the manner prelicensing and compliance registries, organizations representing and extent to which entities are not inspections are veterinary care, facility owners and trainers of working dogs, complying with the basic standards of maintenance and construction, shelter not-for-profit animal rescue and the AWA. Some of these costs will be construction, primary enclosure sheltering organizations, animal one-time costs in the first year, such as minimum space requirements, and transporters, purebred dog and cat providing adequate shelter; others will cleaning and sanitation. We apply fanciers, residential breeders of dogs, recur yearly, such as providing adequate percentages of noncompliance for these cats, rabbits, rats, and other animals, veterinary care. areas, multiplied by likely unit costs or USDA-licensed breeders, pet and pet The cost of a license for breeders is cost ranges, to the estimated number of supply stores, pet owners, farmers, based on 50 percent of gross sales affected breeders described above to veterinarians and veterinary during the preceding business year. As arrive at a total cost range for the rule. organizations, horse and livestock an example, if 50 percent of gross sales We estimate that costs for coming into owners and producers, raptor are more than $500 but not more than compliance for currently noncompliant propagators, State governments, elected $2,000, the annual cost of a license is breeders could range from $2.9 million officials, including U.S. Senators and $70. Identification tags for dogs and cats to $12.1 million in the first year, when Representatives, and members of the cost from $1.12 to $2.50 each. Other both one-time structural changes will public. The issues raised by the animals such as rabbits can be identified occur and annual operational changes commenters are discussed below by by a label attached to the primary will start. topic. We address the issues in the order The rule will also affect some enclosure containing a description of that they pertain to the regulatory text currently licensed wholesale breeders. the animals in the enclosure. We of the proposed rule, then address Expanding the licensing exemption estimate that the average licensed comments pertaining to oversight and from three or fewer breeding females to breeder requires about 10 hours enforcement, constitutionality and four or fewer breeding females could annually to comply with the licensing legality, and other topics. reduce the number of these licensees. paperwork and recordkeeping We expect that the number of current Dealer Definition requirements. All newly licensed licensees that will fall below the We proposed to amend the definition breeders will incur these costs. We exemption threshold following the of dealer in § 1.1 of the AWA estimate these costs would be between implementation of this rule will be very regulations to mean: ‘‘Any person who, about $284 and $550 for a typical dog small. in commerce, for compensation or breeder. Costs at the 3,000 to 5,000 The majority of businesses affected profit, delivers for transportation, or newly licensed dog, cat, and rabbit are likely to be small entities. As transports, except as a carrier, buys, breeders for animal licensing, animal explained, this wide range in total cost sells, or negotiates the purchase or sale identification and recordkeeping could is mainly derived from the uncertainty of: Any dog or other animal whether range between $853,000 and $2.8 surrounding the total number of alive or dead (including unborn million annually. breeders that will need to become animals, organs, limbs, blood, serum, or The newly regulated breeders will licensed as a result of this rule and the other parts) for research, teaching, also need to meet regulatory standards number that will then need to make testing, experimentation, exhibition, or concerning facilities and operations, structural or operational changes. It for use as a pet, or any dog at the animal health and husbandry, and derives to a lesser degree from the wholesale level for hunting, security, or transportation. However, as ranges in costs that are assumed will be breeding purposes. This term does not acknowledged by a wide spectrum of incurred by the newly licensed facilities include: A retail pet store, as defined in commenters on the proposed rule, most to remedy instances of noncompliance. this section; any retail outlet where dogs breeders maintain their facilities well are sold for hunting, breeding, or above the minimum standards of the IV. Discussion of Comments security purposes; or any person who AWA. Therefore, the vast majority of We solicited comments on the does not sell or negotiate the purchase newly regulated breeders will only need proposed rule for 60 days ending July or sale of any wild or exotic animal, to incur licensing, animal identification, 16, 2012. On July 16, 2012, we dog, or cat and who derives no more and recordkeeping costs and not need to published in the Federal Register (77 than $500 gross income from the sale of make structural and/or operational FR 41716, Docket No. APHIS–2011– the animals other than wild or exotic changes in order to comply with the 0003) a document 3 announcing a 30- animals, dogs, or cats during any standards. Neither the number of day extension of the comment period to calendar year.’’ This proposed entities that will need to make changes give the public more time to submit amendment to the definition of dealer nor the extent of those changes is comments. We also announced in that was necessary in order to eliminate known. Therefore, the overall cost of document the availability of a factsheet 4 inconsistencies between that definition structural and operational changes that regarding the provisions of the proposed and our proposed definition of retail pet will be incurred due to this rule is also rule. store. unknown. However, we can estimate the We received 75,584 individual In the paragraphs that follow, we use general magnitude of these costs by comments, 134,420 signed form letters, discrete portions of the proposed assuming the newly regulated entities definition as section headings to exhibit patterns of noncompliance 3 To view this document, go to http:// organize our discussion of the similar to those of currently regulated www.regulations.gov/#!documentDetail;D=APHIS- comments we received on various 2011-0003-8841. wholesale breeders. We agree with 4 To view the factsheet, go to http:// aspects of the proposed definition. Later many comments we received that most www.aphis.usda.gov/publications/animal_welfare/ in this document we take the same breeders that may be affected by this 2012/retail_pets_faq.pdf. approach in our discussion of the

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comments received on the proposed in which representatives for the rescue Dealer: ‘‘For research, teaching, definition of retail pet store and the or shelter and the animals available for testing, experimentation, exhibition, or proposed revisions to the exemptions sale or adoption are physically present for use as a pet…’’ from licensing contained in the AWA at a location where the public is Several commenters stated that they regulations. encouraged to personally observe the sold animals at retail for purposes other Dealer: ‘‘Any person who, in animals; this business model is than the six specified in the definition commerce, for compensation or profit consistent with our definition of retail of dealer. These commenters stated that . . .’’ pet store. As a result, private rescues they believed themselves to be outside A number of commenters stated that and shelters with this business model of the scope of dealers and thus not APHIS had failed to define the terms have historically been exempted under subject to licensing but asked for ‘‘commerce’’ and ‘‘compensation’’ as the the retail pet store exemption in clarification. Some of these commenters, terms are used in the definition of § 2.1(a)(3)(i) and will continue to be including dog, cat, and rabbit dealers, dealer. Specifically, they noted that exempted. stated that they sold or transported private animal rescues and shelters that Finally, we consider such rescues and animals only in order to preserve suggest a self-determined donation are shelters to be retail pet stores only for bloodlines. The commenters who not operating in commerce or the purposes of our regulations. mentioned rabbits also stated that most attempting to obtain compensation or Whether any other Agency or rabbit breeders sell rabbits for one of profit and thus do not fall under the jurisdiction defines such an three purposes: Food, fur, or definition of dealer (see also the section organization as a retail pet store for preservation of bloodlines. below titled ‘‘Requests for Additional One commenter stated that, if APHIS taxation or any other purpose is beyond Exemptions’’). Likewise, many were to indicate that all individuals our purview. commenters stated that the business who buy, sell, or transport animals for model of rescue and shelter One commenter asked whether the the preservation of bloodlines (i.e., organizations is clearly different from proposed rule establishes a new class of breeding purposes) are not within the that of dealers in that it involves neither licensee to be categorized in the same scope of dealer, it could provide a compensation nor profit, and for that manner as existing dealers, and if so, it loophole for dealers to evade regulatory reason all rescues and shelters should is unclear how APHIS could treat the oversight. That being said, the be exempt from licensing. Several new dealers differently from those commenter suggested that individuals commenters stated that it is illegal for existing licensees. who buy, sell, or transport a dog for 501(c)(3)s to require compensation or to We are not establishing a new class of which there are fewer than 100 attempt to profit from any services that licensee. All newly licensed dealers registered litters in the United States they provide; one of these commenters would be subject to the same should be allowed to state that they are expressed concern that, if requests for requirements as dealers who are acting solely to preserve rare bloodlines. donations by private animal rescues or currently licensed. If an individual is selling animals at shelters are considered to be commerce Dealer: ‘‘Including unborn animals, retail for breeding purposes, that or compensation, those organizations organs, limbs, blood, serum, or other individual is not a dealer. We do, would be forced to pay Federal, State, parts. . . .’’ however, share the commenter’s and/or local taxes on every sale of a One commenter stated that she concern that claiming breeding rescued or abandoned animal. frequently purchases semen in order to purposes as the purpose for an animal’s On the other hand, some commenters impregnate female dogs that cannot retail sale could be subject to abuse. noted that animal shelter and rescue travel to stud because of distance or risk Therefore, if we were to receive word organizations that transport and offer for to health. The commenter added that that individuals making such claims are, adoption rescued dogs and cats employ she does not sell the female dogs or in fact, marketing their animals as pets, a business model that does not their offspring and for that reason we would consider this to be grounds significantly differ from those of many should not be considered a dealer. for initiating an investigation to resolve dealers. The commenters also noted that Unless an individual buys or sells, at the matter. rescues often request substantial Another commenter stated that he retail, or transports semen or unborn adoption fees for their services and that bred and sold dogs for participation in animals for one of the six purposes those fees constitute compensation. agility competitions and asked if he listed in the definition of dealer Many of these commenters concluded would be considered a dealer. (research, teaching, testing, that such organizations should therefore We are making no changes in experimentation, exhibition, or use as a be regulated as dealers. response to this comment. It has been pet), the individual is not a dealer. The We consider private rescues and our experience that dogs that participate activities described by the commenter shelters that perform any of the in agility competitions are primarily do not fall under any of the listed activities listed in the definition of marketed as personal or family pets. An purposes. dealer, including transporting or individual selling dogs at retail for use offering animals for compensation, to be The same commenter asked whether as pets would be considered a dealer. dealers. We consider acts of individuals involved in transporting a Dealer: ‘‘Any retail outlet where dogs compensation to include any female dog back from a stud after are sold for hunting, security, or remuneration for the animal, regardless breeding would be considered dealers, breeding purposes . . .’’ of whether it is for profit or not for since the female dog is presumed to be Many commenters stated that if the profit. Remuneration thus includes, but carrying an unborn animal within it at purpose of this clause is to exempt is not limited to, sales, adoption fees, that time. sellers and buyers of working dogs from and donations. We consider persons transporting being dealers, its description is too We note, however, that dealers are pregnant female dogs in retail commerce limited in scope. The commenters cited only required to be licensed if they do for breeding purposes to be exempted a number of different uses for a dog— not meet any of the exemptions in the from licensing, as this purpose is not a companion animal for individuals regulations. Many private rescues and one of the six purposes listed in the with disabilities, a guide dog, a herd or shelters operate under a business model definition of dealer. livestock dog, a sled dog, or a rescue

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dog—that do not fall within the scope One commenter stated that he sold discrepancy was likely to result in a of these uses but that require a dog to dogs at retail for hunting, but did so degree of confusion among breeders be trained to perform a specific from his home rather than from an regarding whether they fell under the function. The commenters urged us to outlet. The commenter asked whether regulations as a dealer. In order to expand the exemption to cover he was still exempt from being clarify the definition of pet animal, the additional uses or to amend it to specify considered a dealer. commenter suggested amending the that it covers dogs sold at retail for work An individual selling dogs at retail definition to read as follows: ‘‘Pet purposes. solely for hunting purposes is not a animal’’ means any animal that has Individuals who sell or buy dogs at dealer. commonly been kept as a pet in family retail for any purpose other than the six One commenter asked how APHIS households in the United States, such as listed in the definition of dealer are not determines from a seller that a dog sold dogs, cats, guinea pigs, rabbits, and dealers. The examples cited in the for hunting, herding, or other work will hamsters. This term excludes: (1) Any exemption (hunting, security, or not also be used as a pet. wild or exotic or other non-pet species breeding purposes) are only intended to In making such a determination, we of warm-blooded animals (except birds), illustrate other purposes for buying or consider the manner in which the seller such as skunks, raccoons, nonhuman selling a dog at retail. As commenters markets his or her animals and gather primates, ocelots, foxes, coyotes, etc.; pointed out, those examples are not feedback from buyers and State, county, and (2) animals sold at retail in exhaustive, and there are many other and local authorities. commerce for any of the following purposes that a dog can be used or Dealer: ‘‘Who does not sell or purposes: hunting, security, breeding, trained for that are not included under negotiate the sale of any wild or exotic food, or fiber (including fur).’’ the definition of dealer. animal, dog, or cat and who derives no We are making no change in response Finally, we note that persons selling more than $500 gross income from the to this comment. Animals listed under dogs at the wholesale level for hunting, sale of [such animals] during any the definition of dealer are there for the security, or breeding purposes are calendar year.’’ purpose of indicating which persons are Excluded under the definition of considered to be dealers. subject to regulation and focus on the Several commenters stated that they dealer is any person who does not sell type of animal and how it is bought, sold dogs at retail only for hunting, or negotiate the purchase or sale of any sold, or transported in commerce. security, or breeding purposes but that wild or exotic animal, dog, or cat and Animals listed under the definition of sometimes birth defects, genetic who derives no more than $500 gross pet animal provide examples of ‘‘pets’’ anomalies, poor temperament, or other income from the sale of animals other as that term is used in the definition of flaws preclude them from selling some than wild or exotic animals, dogs, or dealer. of the offspring for those purposes. cats during any calendar year. A number Other commenters stated that they of sellers stated that the costs of animal Retail Pet Store Definition imported and maintained dogs for use breeding have risen significantly in We proposed to revise the definition in working dog programs, but recent years and a $500 limit for this occasionally if a dog did not work out of retail pet store so that it would mean exemption is too low. They asked that ‘‘a place of business or residence that as a working animal, it would be sold it be adjusted upwards to compensate at retail as a pet. The commenters asked each buyer physically enters in order to for inflation. On the other hand, several personally observe the animals available whether they were covered by the commenters stated that the $500 de exemption. for sale prior to purchase and/or to take minimis exemption is too high. custody of the animals after purchase, Individuals who intend to breed and The gross income limit is set by the and where only the following animals sell dogs at retail as working dogs may AWA. However, it is important to note are sold or offered for sale, at retail, for occasionally raise a dog that lacks the that, under the proposed rule, there are use as pets: Dogs, cats, rabbits, guinea characteristics that would enable it to be a number of other ways that persons pigs, hamsters, gerbils, rats, mice, sold or used for its intended working who sell animals covered by this gophers, chinchillas, domestic ferrets, purpose. As long as the individual exemption (including rabbits, guinea domestic farm animals, birds, and originally intended to raise and sell the pigs (cavies), and rats) can be exempted coldblooded species.’’ We also proposed dog at retail for that purpose and the from licensing, either by not meeting the to specify that persons who meet the individual continues to market his or definition of dealer in § 1.1 or through criteria for an exemption from licensing her dogs for that purpose, the individual one or more of the licensing exemptions in § 2.1(a)(3)(iii) of the AWA regulations could sell that dog at retail and remain in § 2.1 (see the section below titled are retail pet stores. exempt. ‘‘Retail Pet Store: ‘‘. . . rabbits, guinea Another commenter asked whether a pigs . . .’’). Retail Pet Store: ‘‘A place of business person operating a multi-use retail Several commenters asked why sales or residence . . .’’ facility, in which some dogs were sold of dogs or cats are not covered by this Several commenters wanted to know at retail for hunting or security and exemption, and suggested it be amended why, in revising the definition of retail others were sold for other purposes, to exempt individuals who derive no pet store, we had removed the word would be considered a dealer. more than $500 gross income from the ‘‘outlet’’ and added the words ‘‘place of Any person selling dogs at retail for sale of any animals listed in the business or residence.’’ one of the six purposes stated in the definition of dealer. ‘‘Outlet’’ as used in the definition has definition of dealer, including as pets, The AWA does not include dogs and always referred simply to the activity of would be considered a dealer. If the cats under this particular exemption. retailing animals, not necessarily within dogs intended to be sold as pets at a Dealer: Discrepancy with the the confines of a ‘‘brick-and-mortar’’ pet multi-use retail facility are commingled definition of ‘‘pet animal’’ store or even a physical location. with dogs intended to be sold for One commenter noted a discrepancy Accordingly, ‘‘outlet’’ in this context purposes other than one of the six in the between the list of animals covered can include the sale of animals sight definition of dealer, all parts of the under the definition of pet animal and unseen, which is the retail activity that multi-use facility would be subject to animals listed in the definition of dealer we proposed to regulate. For this reason, regulation. in § 1.1. The commenter stated that this we proposed removing the word

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‘‘outlet’’ and replacing it with ‘‘place of take place at locations other than a retail pet store because we established business or residence.’’ ‘‘brick-and-mortar’’ pet store, so in Doris Day Animal League (DDAL) v. A commenter stated that, by removing restricting the definition of retail pet Veneman 6 that we consider residential the word ‘‘outlet’’ and thus removing store to ‘‘brick-and-mortar’’ stores is breeders selling pets at retail to be sight unseen sales from the scope of the unnecessary and not in keeping with the included under the exemption of ‘‘retail retail pet store definition, we had intent of the AWA. pet stores’’ in the AWA. fundamentally reinterpreted the implicit A few commenters asked for a Retail Pet Store: ‘‘That each buyer meaning of ‘‘retail’’ within the AWA. definition of a ‘‘face-to-face’’ physically enters. . . .’’ The commenter stated that ‘‘retail’’ has transaction. Many commenters objected to the always been understood to mean sale We consider a face-to-face transaction provision that each buyer be required to directly to the consumer and added that as one in which the seller, buyer, and enter the premises where animals are the method of delivery does not change the animal available for sale are offered for sale. Some of them presented the underlying structure of the retail physically present so that every buyer a number of different scenarios in transaction. Similarly, several may personally observe the animal prior which, they stated, it would be commenters pointed out that sight to purchasing and/or taking custody of impracticable to have each buyer unseen sales were fairly common during that animal. While the seller’s presence personally observe the animal prior to the time period when Congress passed at this transaction was implicit in our purchasing and/or taking custody of it the AWA, but are not mentioned within proposed definition of retail pet store, after purchase. Suggested scenarios the Act as an activity that contributes to we are amending the definition to included sales to foreign customers; animal neglect or abuse; these actually include the word ‘‘seller’’ in sales to disabled or elderly customers commenters concluded that the AWA order to underscore his or her presence. for whom travel to the buyer is a health must therefore consider retail sales of Several commenters stated that, while risk; and sales of a rare breed, with a pets to include sight unseen sales. the intent of our proposed changes was handful of geographically dispersed We disagree with the commenters that likely to exempt small-scale residential owners, for preservation of bloodlines. we reinterpreted the meaning of ‘‘retail’’ breeders from licensing, labeling such Many of these commenters added that in relation to the AWA, or that the AWA breeders as a retail pet store has personally delivering animals to buyers includes sight unseen sales within the unintended adverse effects. Many would also be impractical and costly. scope of retail sales. It is our contention commenters pointed out that local We proposed this provision because it that the AWA envisioned a retail pet zoning codes often prohibit retail stores is our contention that the AWA store as a business in which the seller, in areas designated for residential use, considers a retail pet store to be one in buyer, and animal are physically while others stated that State and local which the buyer, seller, and animal are present so that every buyer can tax codes often require retail stores to physically present so that every buyer personally observe the animal for sale file differently from ‘‘hobby businesses’’ can personally observe the animal prior to purchasing and/or taking and asked whether APHIS had available for sale prior to purchasing custody of that animal, thus ensuring considered these implications. One and/or taking custody of that animal. that the animals were monitored for breeder asked whether, pursuant to Animals that are sold at retail sight humane care and treatment. Internal Revenue Service Code Section unseen are not personally observed by In the factsheet,5 we clarified our 183, being considered a retail pet store buyers prior to purchase. However, it is proposed change to the retail pet store by APHIS would allow him to claim important to note that we consider the definition by noting that pet animal ‘‘for profit’’ status and increase the buyer of a pet animal sold at retail to be retailers who sell their animals to number of itemized deductions he could the person who takes custody of the customers in face-to-face transactions at claim on his tax form. animal after purchase, even if this a location other than their premises are We used the term retail pet store only person is not the ultimate owner of the also subject to some degree of public for the specific purpose of defining animal. Bearing this in mind, we oversight, and therefore we would not certain persons who sell pets at retail as consider many of the scenarios regulate them for that activity. retail pet stores, thus exempting them presented by commenters to pertain to Several commenters stated that the from licensing pursuant to the AWA. issues that would preclude the ultimate factsheet is inconsistent with the One commenter suggested that we owner of the animal, not the buyer, from proposed rule because a face-to-face should remove the words ‘‘or residence’’ being physically present to observe the transaction at any location other than a and the reference to § 2.1(a)(3)(iii) from animals. However, a carrier or fixed residence or place of business is the retail pet store definition and intermediate handler cannot be substantively different from going to instead specify that hobby breeders fall designated as the buyer. that residence or place of business to under the definition of retail pet store. Retailers who, for whatever reason, do observe animals offered for sale. The commenter stated that we could not consider it possible for each buyer Although the AWA does not define define the term ‘‘hobby breeder’’ in the to personally observe their animals prior ‘‘retail pet store,’’ the Act exempted manner specified in current USDA to purchasing them and/or taking retail sellers of pets from licensing Animal Care guidance for dealers, pursuant to the Act. As we mentioned transporters, and researchers: ‘‘Small- 6 Doris Day Animal League v. Veneman, 01–5351: above, it is our contention that it did so scale breeders with gross sales under published 1/23/2003. Doris Day Animal League filed a rulemaking petition with the Agriculture because sellers, buyers, and animals are $500 per year, provided that such sales Department, urging a change in the regulatory physically present at retail pet stores so do not include wild or exotic animals, definition of ‘‘retail pet store’’ so that residential that buyers can personally observe the dogs, or cats; and/or small-scale operations would not be exempted. On March 25, 1997, the Secretary published the petition in the animals before taking custody of those breeders with four or fewer breeding Federal Register (62 FR 14044) and received more animals, thus ensuring that the animals cats and dogs who sell the offspring.’’ than 36,000 comments. On July 19, 1999, when the are monitored for humane care and The definition of ‘‘hobby breeder’’ Secretary announced in the Federal Register that he treatment. Personal observation of an provided by the commenter is our would retain the definition, and stated the reasons longstanding understanding of that why (64 FR 38546), Doris Day Animal League and animal offered for sale can and does other organizations and individuals concerned term. However, we are retaining the about the mistreatment of dogs brought this action 5 See footnote 4. word ‘‘residence’’ in the definition of for judicial review.

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custody of them may still be exempt physically present so that every buyer A number of commenters expressed from licensing if they do not sell the may personally observe the animal prior concern that using the Internet or news animals at retail for one of the six to purchasing and/or taking custody of media to generate customers would purposes covered under the definition that animal after purchase. Accordingly, result in a loss of the exemption from of dealer. If they sell the animals at if the buyers observed this second pup licensing. Many commenters also retail for one of those six purposes, but during their visit, this condition is expressed uncertainty whether any maintain four or fewer breeding females fulfilled. If they did not (e.g., if the pup remote sales completed over the Internet and sell only the offspring born and was not yet born when the prior will automatically subject them to raised on their premises, they are also transaction took place), this condition is licensing requirements, even if the exempt from licensing. not fulfilled. buyer picks up the animal in person Those who own more than four Several commenters opposed to the after buying it online. One commenter breeding females and wish to continue rule questioned APHIS’ basis in expressed concern that she would be selling the offspring as pets, sight assuming that sight unseen sales of pet considered an Internet seller because unseen, can do so by obtaining a license animals necessarily constitute a she has posted sales ads online in the and allowing APHIS inspectors to potential risk to animal welfare. To past. inspect their facility. As explained in support their point, many of these We are not regulating the use of the the economic analysis prepared for this commenters stated that they regularly Internet (or any other method of sale). final rule, the costs associated with buy healthy animals sight unseen or sell Sellers are free to use the Internet to being licensed will be relatively low for healthy animals sight unseen to satisfied advertise or sell pet animals, provide all but that small percentage of newly customers. The commenters pointed out information to buyers, and conduct licensed breeders who are not currently that in the proposed rule, APHIS had other related activities. Indeed, a seller compliant with the AWA standards. failed to quantify the number of who sells over the Internet could still be Commenters who cited the need to complaints that had arisen regarding considered a retail pet store provided engage in sight unseen sales to preserve sight unseen sales of animals, the that, before the buyer takes custody of a bloodline often cited animal health percentage of complaints that came from the animals purchased, the seller, buyer, risks associated with not doing so. An unique customers, and the relative and animals have been physically organization representing a rare dog severity of the complaints. The present in one location so that the buyer breed, for example, stated that sight- commenters also noted that APHIS did may personally observe the animals. unseen sales of its breed for breeding A number of commenters stated that not conduct a survey of all individuals purposes are necessary in order to keep they preferred the alternative set forth in who buy animals sight unseen to see the breed from becoming extinct. The the proposed rule that considered a what percentage of them were satisfied commenter stated that when the breed regulatory threshold based on with the welfare of the animals they is deprived of a wide genetic pool, fatal percentage of sight unseen sales. The purchased. heritable conditions can begin to appear commenters challenged APHIS’ within the breed. Several other breeders On the other hand, several assertion that it has no authority under of rare dogs, cats, and rabbits made commenters supporting the rule the AWA to require retail pet stores to similar claims. Several small-scale provided accounts of sick and injured make and retain sales records, and residential breeders stated that their pet animals that they had bought sight asked, if this is the case, how APHIS practice of occasionally shipping unseen or had been bought by others currently determines that a person animals to each other for stud services known to them. Several veterinarians meets the exemption from licensing in will no longer be possible and result in commented that pet animals bought § 2.1(a)(3)(iv) of the regulations. less genetic diversity for their breed. sight unseen by their owners were often Persons who are exempt from We do not expect licensing of some brought to their clinics with a wide licensing under the AWA cannot be breeders to result in the extinction of range of health problems. required under the AWA regulations to rare breeds, an increase in health issues, The primary purpose of the proposed keep records. The commenter’s question or a decrease in genetic diversity. A rule was to revise the definition of retail about § 2.1(a)(3)(iv) addresses how we person who sells and ships animals at pet store so that it is consistent with the determine a person’s eligibility for an retail for breeding purposes is not AWA. It is our contention that the AWA exemption without requiring them to considered a dealer and thus not subject exempted pet retailers from licensing keep records. This exemption applies to to licensing. Such persons could because the seller, buyer, and animal are persons selling fewer than 25 dogs and/ continue selling at retail and shipping physically present in the same place so or cats each year for research, teaching, animals sight unseen as long as the that the buyer can personally observe or testing purposes. We determine a animal is used for breeding purposes the animal available for sale prior to person’s exemption eligibility by and not for any of the six purposes purchasing and/or taking custody of that inspecting records kept by the research, listed under the definition of dealer in animal, thus monitoring them for teaching, and testing facilities that buy § 1.1. humane care and treatment. This these animals. These facilities are One commenter asked how recently physical presence and personal required under the AWA to document buyers must have visited a facility observation does not occur when when and from whom the animals are before a seller can sell them a pup retailers sell and ship pets sight unseen. purchased. remotely. As an example, the A few commenters stated that they The same commenters pointed out commenter wanted to know whether, if had sold animals sight unseen in the that APHIS’ stated second reason for not buyers visited her facility 2 years earlier past but no longer did so, and asked establishing a threshold, that animals to buy a pup, she could remain exempt that, if the proposed rule is finalized, sold sight unseen could be kept under if she shipped them a second pup whether the scope of this definition conditions different from those sold to without them visiting her a second time. should not be retroactively applied to walk-ins, is not resolved by eliminating As indicated in our revised definition them. sight unseen sales from the exemption. of retail pet store, each purchase of a pet The effect of this rulemaking and its The commenters pointed out that a animal requires that the seller, buyer, enforcement would not be retroactive to large-scale breeder could appear to be in and the animal available for sale are any prior actions. compliance with the regulations by

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establishing a ‘‘brick-and-mortar’’ technologies can be used to inaccurately buying dogs sight unseen over the facility for walk-ins while engaging depict the health and condition of the Internet saw few or no health problems surreptitiously in sight unseen sales of animal for sale. in the dogs they purchased. Conversely, animals bred at another location. The Several commenters suggested a veterinary medical association cited a commenters stated that an exemption amending the definition to allow buyers study concluding that breeders who based on percentage of retail sales the option to waive the requirement to advertise on large-scale puppy sales would be likely to dissuade such physically enter the seller’s place of Web sites and sell to customers sight abuses. Another commenter noted that, business or residence to observe the unseen are less knowledgeable about for many small-scale residential dog animals offered for sale. The breed-specific health issues compared to breeders, sight unseen sales constitute commenters stated that this would national parent club breeders, and that 20 percent of annual sales. The prevent buyers who have an existing such breeders are often less likely to commenter stated that APHIS should relationship with a seller from having to perform screening tests on their therefore adopt an ‘‘80/20’’ threshold of travel long distances to view animals breeding dogs to detect undesirable face-to-face to sight unseen sales. when they felt confident about the care heritable health risks. We have no evidence to indicate that standards provided by the seller. A few We are making no changes in allowing retail pet stores to conduct a commenters stated that this waiver response to these comments. Retail sales percentage of their sales sight unseen should be in writing as documentary that are entirely sight unseen do not would discourage large-scale breeders proof. require the buyer to be physically from engaging in fraudulent practices, One commenter suggested that the present in order to personally observe nor do we have information to indicate regulations should require that the seller the animal available for sale prior to why an 80/20 ratio of face-to-face to have a return policy and that language purchasing and/or taking custody of that sight unseen sales would be requiring physical entry of the business animal. It is our contention that this appropriate. or place of residence be removed from concept of physical presence for the A few commenters asked that the final the definition of retail pet store. The purposes of personal observation is rule ‘‘grandfather in’’ existing commenter suggested that we define consistent with the AWA’s use of the relationships with remote customers, return policy as ‘‘a written policy term retail pet store. and specify that after the effective date provided to a purchaser in a sales Retail Pet Store: ‘‘That each buyer of the rule each new buyer would have contract that contains provisions for physically enters. . . . ’’ to physically enter a place of business returning the animal, reimbursing the A significant number of residential or residence. purchaser, and adjudicating disputes.’’ breeders objected to this provision. We are making no changes in The commenter stated that return Many of the commenters cited human response to the comments. As noted policies ultimately foster animal health and safety concerns and others above, persons who are exempt from welfare, since sellers that provide poor cited animal health risks associated licensing under the AWA cannot be care for their animals are subject to with opening their residence to buyers. required under the AWA regulations to frequent returns and less able to turn a They pointed out that many diseases of maintain the records necessary to profit. dogs, in particular, are zoonotic, and monitor and enforce such an approach. We are making no change in response that buyers who are ill may transmit Retail Pet Store: ‘‘That each buyer to these comments. Waivers and return diseases to animals at their residences. physically enters. . . .’’ policies used in place of requiring Several of these commenters also stated A few commenters asked whether a buyers to observe the animals face-to- that they had no way of knowing the buyer could use an agent to serve in his face would be appropriate for a rule disease status of any animals with or her place. focused on consumer protection, not which a buyer has recently come in As we mentioned above, for purposes animal welfare, and could result in contact, and expressed concern that of our definition of retail pet store, we instances in which retail pet stores sold clothing could serve as fomites consider the buyer to be the person who animals to buyers without the buyers (inanimate objects or substances capable takes custody of the animal after being physically present to personally of transmitting infectious organisms purchase. This person may differ from observe the animals prior to purchasing from one individual to another) for the ultimate owner of the animal but and/or taking custody of them. This diseases of dogs. A few commenters cannot be acting as a carrier or would be inconsistent with the AWA. stated that their animals become intermediate handler. Some commenters noted that the agitated when strangers enter their Retail Pet Store: ‘‘That each buyer proposed rule provides no evidence that premises and stated that requiring physically enters. . . . ’’ purchasing or shipping animals sight buyers or inspectors to enter could A number of commenters asked why unseen jeopardizes animal welfare and therefore adversely impact animal a buyer’s physical presence at a place of treatment. Several of these commenters welfare. business or residence was necessary to pointed to various scenarios as A place of business can be any protect animal welfare. The commenters examples in which such sales could be location in which the seller, the buyer, pointed out that Web-based conducted sight unseen and without and the animal are physically present so technologies allow buyers to ‘‘virtually’’ significant risk, such as when the buyer that every buyer can personally observe observe animals that are for sale. On the is a repeat customer with whom the the animal offered for sale prior to other hand, several commenters pointed seller has previously done business, purchasing and/or taking custody of that out that virtual technologies can be when the buyer and seller are relatives animal(s) after purchase. manipulated to provide an inaccurate or close friends for whom a preexisting On the other hand, several depiction of animal care at a seller’s relationship exists, or when the breed is commenters stated that, for the sake of premises. so rare that each breeder is personally animal welfare, buyers need to While many breeders use Web-based known within the community of personally observe the breeding and technologies to provide buyers with potential buyers. One commenter, a living conditions of animals available visual and other information about the State association of dog owners, cited for sale prior to purchasing and/or animals they sell, we agree with the the results of an informal survey taking custody of those animals. The commenters’ point that such showing that most of its members commenters suggested that we amend

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the definition of retail pet store to commenters similarly noted that the not be required to allow adopters to specify that buyers must be able to see required health certificate currently enter their premises. these conditions. issued by a veterinarian for animals Several commenters stated that many Such an amendment would make the being shipped should be sufficient proof of the reasons that render it difficult for definition of retail pet store in our that the animal is in good health and a buyer to physically enter a seller’s regulations significantly more restrictive that therefore entering the premises to place of business or residence also than its meaning in the AWA. The AWA observe the animal before purchase is apply to completing face-to-face neither authorizes nor requires public unnecessary. Similarly, another transactions (e.g., age, health, or oversight of breeding stock or the commenter asked that if a dog is physical capacities of the buyer, premises on which animals for sale at shipped internationally whether the distance between the seller and buyer, retail are maintained. requirements for shipping the dog geographical isolation of seller). Several commenters stated, both (airline health certificate, USDA The commenters assumed that the before and after issuance of the APHIS endorsed certificate, shot records) could buyer of an animal sold at retail is the factsheet, that face-to-face sales at a be used in lieu of a face-to-face ultimate owner of the animal. However, mutually agreed-upon location should transaction. as noted above, we consider the buyer suffice in lieu of physically entering a On the other hand, several of an animal sold at retail to be the fixed place of business or residence. commenters questioned the efficacy of person who takes custody of that animal Animal rescue organizations, in veterinary certificates generally, stating after purchase; this might not be the particular, supported this point by that they had bought a pet that was ultimate owner. For purposes of the noting that buyers seldom visit their accompanied by a veterinary certificate definition of retail pet store, it is this primary location, but that they always only to later discover the animal had a person, not necessarily the ultimate have face-to-face interaction with buyers genetic condition or longstanding owner, who must be physically present at adoption events or when delivering malady. For this reason, the commenters to observe animals available for sale. the animal to the buyer. stated APHIS should review its policing However, a carrier or intermediate Such a face-to-face interaction is of health certificates issued for dogs in handler cannot be designated as the consistent with the AWA. transit to ensure that certificates are buyer. One commenter suggested that we valid. One commenter objected to face-to- require a seller to have face-to-face We are making no changes in face transactions off-site on the grounds interaction with the buyer at some point response to these comments. Persons that they would put animal rescues and prior to purchase and/or taking custody exempted from licensing under the shelters at a competitive advantage over of an animal, but suggested that we AWA, such as retail pet stores, are not commercial retailers, since the former decouple this from personal observation required to obtain a veterinary health would be able to conduct face-to-face of the animal. The commenter stated certificate when shipping an animal via transactions of animals through that this would allow breeders who had commercial transport. For those networks of transport volunteers rather developed long-standing relationships licensees required to obtain such a than by any employee of the rescue with existing buyers to ship dogs sight certificate from a licensed veterinarian, group or shelter actually meeting the unseen while meeting the intent of the the certificate only affirms that transport buyer, while commercial retailers would rule as they understood it. Another of the animal is not likely to pose a be restricted to having only their commenter agreed and pointed out a health risk to that animal or to other employees conduct the sale. number of scenarios in which the animals in transit. No relationship exists As is the case with commercial pet breeder would be known to the buyer, between issuance of a health certificate retailers, representatives of rescue but may not visually inspect the animals for an animal and the standard of care groups also must be physically present before purchase (buying from a blood provided by the seller receiving the at a place of business so that potential relative or close friend, buying from a certificate. Finally, regardless of a buyers/adoptees can personally observe breeder with whom one has previously certificate, any retail transaction that their animals before purchasing and/or done business, and buying under time does not include the element of public taking custody of them. constraints that do not allow for visual oversight is inconsistent with the AWA. A commenter noted that substandard inspection of the animal). Several commenters stated that Internet sellers could shift their model We are making no changes in persons operating foster homes for of business to selling animals face-to- response to these comments. The abused or rescued animals should be face at a location off their premises to definition of retail pet store is consistent exempted from having buyers/adopters avoid licensing, as the proposed rule with the AWA in that it requires that the physically enter their premises. They will not impact such activities. seller, buyer, and the animal available stated that requiring such entrance We carefully considered this for sale be physically present so that would likely dissuade both foster comment when we decided to allow the every buyer can personally observe the persons and potential adopters from seller, buyer, and animal available for animal prior to purchasing and/or accepting dogs and cats and would sale be physically present at the same taking custody of that animal. ultimately adversely impact animal place, but not necessarily the seller’s A few commenters stated that, instead welfare. premises. This does not create an of requiring the buyer to enter the Persons who engage solely in face-to- incentive for and a means of avoiding premises to observe the animal before face retail transactions are retail pet licensing for the types of dealers the purchase and/or taking custody, we stores, regardless of whether these AWA encompasses. should require all animals sold at a transactions occur at a residence or at Internet sellers who shift their model place of business or residence to be some other location; as we noted above, of business in such a manner would accompanied by a certificate of most animal rescues engage solely in have to provide buyers with the veterinary inspection attesting to their such types of retail transactions. Persons opportunity to personally observe health and freedom from genetic who foster pet animals in their homes animals for sale prior to purchasing disorders in order for that place of on behalf of these rescues may conduct and/or taking custody of them, and thus business or residence to meet the these face-to-face transactions at an will engage in a retail model that is definition of retail pet store. Other alternative location and therefore would consistent with the AWA. Our analysis

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of the industry is that dealers who and determine whether a sight unseen distinguishing factor defining the currently use an Internet sales business sale has occurred. difference between which animals are model would not find it economically Retail Pet Store: ‘‘In order to sold and which are offered for sale. viable to shift their business model in personally observe the animals . . .’’ Animals offered for sale are the such a manner and would instead opt Several commenters stated that property of the seller, while animals for licensing and inspection by USDA. APHIS provided no evidence that that are sold are the property of the As noted in our economic analysis, we having individuals personally observe buyer. believe that between 2,600 and 4,640 pet animals prior to purchase will result Retail Pet Store: ‘‘cats . . .’’ dog breeders who currently claim retail in more humane treatment and healthier Several commenters noted that most pet store status will no longer be able to pets. A number of commenters stated pet cats come from sources other than do so under this rule. However, USDA that, while personally observing an small-scale cat breeders and that will monitor the rule’s implementation animal prior to purchase and/or taking regulating such breeders is not and consider proposing new rules custody will allow a buyer to visually necessary. A cat club representative should we determine that the AWA’s inspect the animal for signs of neglect cited a 2010 survey by the American Pet intent is not being served. or symptoms of certain diseases, a Products Association revealing that Another commenter suggested that, if simple visual inspection will not reveal fewer than 1 percent of cats are obtained sellers who have face-to-face to the buyer whether the animal has through Internet/online contact and transactions at shows, flea markets, and genetic conditions or other maladies; only 2 percent of owned cats are auctions are exempt from licensing, several commenters pointed out that a obtained from breeders of pedigreed then the shows, flea markets, and number of genetic conditions of dogs cats. The commenter stated that there is auctions themselves should have to be and cats have a significant latency no need for Federal regulation of small licensed. (The commenter stated that period. Another commenter pointed out or moderate scale home-based breeders events that solely serve non-profits that personal testimonials from animal of cats who have more than four should not have to be licensed.) welfare organizations received during breeding females, regardless of whether If a seller is selling regulated animals the comment period have provided or not pet buyers come to their places to buyers at a show or event solely in evidence that animals sold at retail often of business. retail, face-to-face transactions, that have genetic conditions that can only Given the presence of commercial cat seller meets the definition of a retail pet result from inbreeding or overbreeding. breeders selling and shipping cats sight store and is exempt from licensing Our focus in this rule is to ensure that unseen, we consider some degree of regardless of the physical venue in our definition of retail pet store is Federal regulation to be necessary to which the animals are offered for sale. consistent with the AWA. It is our ensure adequate oversight. Retail Pet Store: ‘‘. . . rabbits, guinea Auctions and other events in which contention that the AWA exempted pigs . . .’’ regulated animals are sold at wholesale retail pet stores from Federal licensing Several commenters asked APHIS to must be licensed. and inspection requirements because, at such establishments, buyers are clarify for those who own rabbits and One commenter stated that both guinea pigs (cavies) the conditions APHIS and other commenters may have physically present in order to personally observe the animal available for sale under which they are required to obtain understated the difficulty of meeting in a USDA license. public to purchase dogs or cats face-to- prior to purchasing and/or taking custody of that animal, thus monitoring Only a very small number of persons face. The commenter pointed to several selling rabbits and guinea pigs will be State and local regulations that forbid or them for humane care and treatment. As an alternative to requiring buyers affected by this rule. Such persons may restrict sales or commercial transactions to personally observe the animals for be required to obtain a license if the in public areas. The commenter sale, face-to-face, several commenters following applies to their situation: (1) concluded that, because of these stated that all retail breeders should They sell animals sight unseen; (2) They difficulties, APHIS should revise the have to be licensed pursuant to the sell the animals as pets and not for definition of retail pet store to allow AWA regulations. On the other hand, a purposes of food or fiber (including fur) some sight unseen sales to take place. number of commenters pointed out that or agricultural purposes; and (3) They We are making no changes in licensing of all such breeders would do not qualify for the $500 gross income response to this comment. If local or expand the scope of regulated entities limit from licensing. State ordinances prohibit the sale of far beyond APHIS’ capacity to enforce Several commenters noted that the dogs or other pet animals in public the AWA regulations. regulations were vague on when rabbits areas, roadsides, or other locations, We are making no change in response are to be considered livestock or pets for retailers of pet animals residing in the to these comments. The AWA exempts regulatory purposes. States or locales affected would retain certain breeders from licensing. If a person sells rabbits only for the the option of conducting business in One commenter asserted that the purposes of food or fiber (including fur), any other location that is not prohibited blind are incapable of personal those animals are considered to be farm by law. observation of animals. animals and the person is exempt from One commenter asked what sort of As long as the buyer is physically licensing. documentation APHIS would ask from present with the animals prior to Some commenters were concerned sellers that a face-to-face transaction had purchasing them and/or taking custody that the rule would require licensing of occurred between them and the buyer of of them after purchase, it is considered National and State Future Farmers of a pet. The commenter stated that this an acceptable transaction for the America (FFA) organizations and 4–H would almost certainly require purposes of maintaining the status of a participants who sell their rabbits and recordkeeping if the buyer and seller retail pet store. limit the ability of youth to breed and offer differing accounts of the Retail Pet Store: ‘‘Where only the show rabbits at county fairs and other transaction. following animals are sold or offered for exhibitions. In instances where there is some sale . . .’’ FFA and 4–H participants who sell question about the method of sale, One commenter stated that this their rabbits for the purposes of food or APHIS will conduct an investigation phrase is ambiguous because there is no fiber (including fur) or in face-to-face

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transactions at county fairs, rabbit domestic livestock and clarifies that under the definition of farm animal in shows, and other agricultural livestock are, in most instances, not § 1.1 are exempt from regulation exhibitions are exempt from licensing pets. regardless of whether the buyer has regardless of the number sold. Farm animals intended for use as such a plan on file. One commenter concerned about the food, fiber, or other purposes specified Retail Pet Store: ‘‘. . . birds . . .’’ sale of rabbits asked whether this under the definition of farm animal in A few commenters requested that proposal has any provisions that would § 1.1 are exempt from regulation. Farm APHIS create an exemption in the stop some rabbit rescue organizations animals intended to be used as pets, for regulations for raptors. One commenter from buying rabbits from commercial biomedical research, or other requested that we include specific sources and reselling them as ‘‘rescues’’ nonagricultural research are regulated exemptions from licensing and all other for a substantial profit. under the AWA. Persons exhibiting regulations promulgated under the APHIS investigates all credible farm animals at agricultural shows, AWA for falconers, raptor propagators, reports we receive of unlicensed fairs, and exhibits are exempt from those that conduct education of the activities involving sales of covered licensing. However, persons exhibiting public regarding raptors, and raptor pets. farm animals for nonagricultural permittees. The commenter stated that A few commenters stated that we purposes (such as petting zoos) are these persons are already subject to should entirely exempt guinea pig required to be licensed. other stringent Federal regulations (cavy) breeders from licensing. A national livestock organization designed to ensure the welfare of these Guinea pigs (cavies) are under the asked that we include language allowing raptors, including licensing, facility authority of the AWA, and APHIS is face-to-face transactions of farm inspections, reporting requirements, and tasked with ensuring that all guinea pigs animals. permit fees. Another commenter sold as pets are monitored for their As noted above, farm animals asserted that raptors are not pets, and humane care and treatment. intended for use as food, fiber, or other thus do not fall under the scope of the Retail Pet Store: ‘‘. . . rats . . .’’ purposes specified under the definition AWA; hence their owners do not need Some commenters asked APHIS to of farm animal in § 1.1 are exempt from to be licensed. clarify for those who own rats the regulation, regardless of whether those Another commenter stated that we conditions under which they would animals are sold face-to-face or sight should exempt parrot breeders from have to obtain a USDA license. unseen. Farm animals sold specifically licensing on the grounds that subjecting Under the regulations, we currently as pets in face-to-face transactions are them to licensing will promote cover rats other than those of the genus also exempt from licensing. On the smuggling of parrots from other Rattus bred for use in research. other hand, farm animals used for countries. Similarly, a commenter Therefore, persons retailing covered rats biomedical or other nonagricultural expressed concern that waterfowl could would need to obtain a license if they research, or for nonagricultural be affected by the proposed rule and are not otherwise exempt. exhibition, are regulated under the requested that we include in our Retail Pet Store: ‘‘. . . gophers . . .’’ AWA and require licensing. regulations an exemption for birds One commenter stated that gophers One commenter suggested that we already regulated under the Migratory should be removed from the list of pets specifically exempt horses not used for Bird Treaty Act of 1918. that can be sold without licensing in the research purposes from the retail pet Finally, one commenter noted that definition of retail pet store. The store definition. there is no clear definition of ‘‘bird(s)’’ commenter noted that while the other In § 1.1, the term animal excludes in part 1. Because of this, the animals listed in that definition have horses not used for research purposes, commenter wondered about the extent historically been sold as pets, gophers which specifically exempts them from to which the regulations in parts 2 and have not and should more accurately be regulation. 3 pertain to birds. classified as ‘‘wild animals.’’ One commenter expressed concern On June 4, 2004, we published a final We are making no changes in that if a breeder maintains both farm rule in the Federal Register (69 FR response to this comment. Our research animals and regulated animals on his 31513–31514, Docket No. 98–106–3) shows that gophers have been bought residence, and the farm animals are that amended the definition of animal and sold as pets in the United States for deemed responsible for the breeder in the AWA regulations to include at least a decade. failing to meet the regulatory standards birds, other than those bred for use in Retail Pet Store: ‘‘. . . domestic farm for the regulated animals, the breeder research. However, APHIS has not animals . . .’’ could be penalized and APHIS could established standards specific to birds. Some commenters were uncertain remove the farm animals from the Retail Pet Store: ‘‘. . . coldblooded about how the proposed rule would premises. species’’ affect the ownership, breeding, and sale Farm animals intended for use as A number of reptile breeders stated of farm animals. food, fiber, or other purposes specified that the industry is highly self- One commenter stated that the under the definition of farm animal in regulated, and that sight unseen sales of regulations are unclear with respect to § 1.1 are exempt from regulation, and reptiles tend to be of high-end, livestock which may either be reared for therefore cannot be removed from a extremely valuable animals where utility purposes or kept as pets. The premises due to failure to meet the animal welfare is paramount for the commenter noted that transfer of AWA regulations. sake of the sale. The commenter ownership of equids, bovids, caprids, Another commenter asked if any suggested that sellers of cold-blooded lagomorphs, and domestic fowl is livestock sold to a buyer who does not animals should be exempt from regularly conducted sight unseen both have a ‘‘farm plan’’ on file with USDA licensing, whether their sales are face- for utility purposes and as pets, and that would be considered as pets. to-face or sight unseen. Another sellers are sometimes not aware of the The commenter is referring to a type commenter asked how APHIS could buyer’s intended use of the animals. The of business plan required for certain require licensing of individuals who sell commenter asked that APHIS add Farm Service Agency loans. As noted reptiles sight unseen, when the reptiles clarifying language to the regulations above, animals sold and intended for do not fall under the definition of that allows the free exchange of use as food, fiber, or other purposes animal.

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As the commenter noted, cold- these commenters suggested that we themselves to be retail pet stores, blooded species do not fall under the keep the exemption in § 2.1(a)(3)(vii) in although they do not engage in retail definition of animal in § 1.1 and are the regulations, but specify that it sales. For these reasons, we are not therefore not regulated. pertains solely to dog and cat fanciers. removing § 2.1(a)(3)(vii) from the Retail Pet Store: ‘‘A retail pet store The commenters who surmised that regulations in this final rule. Instead, we also includes any person who meets the we proposed to include persons meeting are revising that exemption so that it criteria in § 2.1(a)(3)(iii) of this the criteria of § 2.1(a)(3)(iii) in the duplicates the criteria contained in subchapter.’’ definition of retail pet store because we § 2.1(a)(3)(iii) but specifies that those A number of commenters raised proposed to remove § 2.1(a)(3)(vii) from criteria moved into § 2.1(a)(3)(vii) questions regarding the reference to the regulations are correct. The AWA pertain only to retailers. Conversely, we § 2.1(a)(3)(iii) that we proposed adding exempts retail pet stores from licensing are amending the exemption in to the definition of retail pet store. Many pursuant to the Act; this is the only § 2.1(a)(3)(iii) to specify that it pertains of these commenters were unsure why exemption from licensing that is only to wholesalers. Because of these persons meeting these criteria were specified for retailers within the AWA. amendments, we are in turn amending considered retail pet stores. A few of The exemptions from licensing that had our proposed definition of retail pet these commenters asked whether being existed in § 2.1(a)(3)(i) and store so that it includes individuals who considered a retail pet store because of § 2.1(a)(3)(vii) were in the AWA meet the criteria in § 2.1(a)(3)(vii) under these criteria allows a person to claim regulations because we had considered the definition of retail pet store. We are the exemption in § 2.1(a)(3)(i). One individuals who met the criteria in also making a nonsubstantive change to commenter, who met the criteria in those paragraphs to be retail pet stores. the definition of retail pet store based on § 2.1(a)(3)(iii), asked why he would In the proposed rule, we proposed to our inclusion under that definition of need two separate exemptions from revise the definition of retail pet store to persons who meet the criteria in licensing. make it more restrictive than it had § 2.1(a)(3)(vii). (These revisions are set Several commenters surmised that we previously been; this is because, as we forth in the regulatory text at the end of included this criterion within the scope noted above, the existing definition had this rule.) of the proposed definition of retail pet begun to be interpreted in a manner that Finally, it is not possible under the store because we proposed to remove was inconsistent with the AWA. AWA to exempt a purebred dog or cat the exemption in § 2.1(a)(3)(vii); many Our proposed revisions to the fancier from licensing solely because he of these commenters referred to definition of retail pet store conflicted or she is a purebred dog or cat fancier. § 2.1(a)(3)(vii) as the ‘‘hobby breeder’’ with the criteria in § 2.1(a)(3)(vii). However, dog and cat fanciers who meet exemption, and suggested that our However, as we mentioned above, that the criteria in § 2.1(a)(3)(vii) will be intent was to provide some hobby paragraph of the AWA regulations only exempt from licensing because we breeders an exemption from licensing. could exist if we consider all persons consider them to be retail pet stores for However, many of these commenters who meet the criteria in the paragraph the purposes of the AWA regulations. pointed out that the criteria in to be retail pet stores. Thus, we § 2.1(a)(3)(iii) are significantly more proposed to remove § 2.1(a)(3)(vii) from $500 Gross Income Limit restrictive than those in § 2.1(a)(3)(vii). the regulations, since it would have We also proposed to remove the Although a number of these commenters otherwise provided an exemption from limitation concerning the source of agreed with APHIS that retaining the licensing for people who did not meet gross income in § 2.1(a)(3)(ii) of the exemption unchanged in § 2.1(a)(3)(vii) our proposed revision to the definition regulations, which exempts from would continue to allow commercial of retail pet store. licensing ‘‘any person who sells or Internet retailers of dogs and cats to However, we recognized that if we negotiates the sale of or purchase of any remain exempt from licensing, the were to remove § 2.1(a)(3)(vii) from the animal except wild or exotic animals, commenters stated that we had failed to regulations, we would expose to dogs, or cats, and who derives no more provide a rationale for removing the licensing a subcategory of individuals, than $500 gross income from the sale of exemption from licensing in those with four or fewer breeding female any animal except wild or exotic § 2.1(a)(3)(vii) for certain dog and cat dogs, cats, and/or small exotic or wild animals, dogs, or cats to a research fanciers. mammals who sell at least some of the facility, an exhibitor, a dealer, or a pet A number of self-described dog and offspring of these animals sight unseen, store during any calendar year and is cat fanciers stated that they did not meet that we consider to present a low risk not otherwise required to obtain a any of the criteria in our proposed of noncompliance with the AWA. It has license.’’ We proposed removing the definition of retail pet store, but offered been our experience that such limitation on the source of sales so that various reasons why they should be individuals maintain few enough such persons could also sell their exempt from licensing. These reasons breeding females on their premises to animals at retail if they wish and remain included: Because their animals are offer adequate care and treatment to exempt under the $500 limit. maintained in private residences; each animal. To continue to exempt Several commenters stated that the because dog and cat fanciers provide these individuals from licensing, we $500 gross income limit should be much adequate care and treatment for their included the ‘‘breeding females’’ higher because of inflation and the animals; and because dog and cat exemption in § 2.1(a)(3)(iii) within the rising costs of animal breeding. fanciers are ‘‘known commodities’’ scope of the definition of retail pet store. Conversely, some commenters stated among their clientele and that failing to During preparation of this final rule, that the $500 limit for the exemption is provide adequate care for animals they we then realized that § 2.1(a)(3)(iii), as too high because no animal breeder offer for sale would ruin their written, applied both to retailers and to selling his or her animals should be reputations. Several of these wholesalers with regard to breeding exempt from licensing. commenters suggested that, in the final females. If we were to finalize the We are making no changes in rule, we should specify that all dog and proposed definition of retail pet store to response to these comments. The $500 cat fanciers, rather than all individuals include persons who meet the criteria in gross income limit was mandated by who meet the criteria in § 2.1(a)(3)(iii), § 2.1(a)(3)(iii), this could mistakenly Congress within the AWA. However, it are exempt from licensing; a number of allow wholesalers to consider is important to note that under the

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proposed rule, there are a number of the exemption limit. We also invited four or fewer breeding female cats, in ways that persons who sell animals comments regarding the variability of total, and four or fewer breeding female covered by this exemption (including litter size by breed and the impact that small exotic or wild mammals, in total, rabbits, guinea pigs (cavies), and rats) variability may have on the setting of or the total number of breeding female can be exempted from licensing, either size thresholds, as well as comments on dogs, cats, and small exotic or wild by not meeting the definition of dealer whether to regulate breeders by number mammals on the premises that is four or in § 1.1 or through one or more of the of offspring sold or by number of fewer. In the latter case, the commenters licensing exemptions in § 2.1 (see the breeding females. stated that this exemption was too section below titled ‘‘Retail Pet Store: A few commenters stated that we stringent for many 4–H, FFA, and rural ‘‘. . . rabbits, guinea pigs . . .’’). should substantially revise the families, particularly given our decision A number of dog and cat breeders exemption. One commenter stated that to remove § 2.1(a)(3)(vii), which stated that the $500 gross income limit the exemption should cover only those exempted any person who breeds and was too low for such animals. breeders who breed their animals no raises domestic pet animals for direct The $500 gross income limit more than once annually; other retail sales to another person for the exemption does not apply to dogs or commenters suggested breeding buyer’s own use and who buys no cats. intervals of 12, 18, and 24 months. animals for resale. The commenters Breeding Females and Offspring Another commenter stated that the stated that APHIS should engage in exemption should specify the dialog with FFA and 4–H families and Section 2.1(a)(3) of the AWA conditions under which breeding set a more reasonable number based on regulations exempts certain persons females must be raised on their that dialog. from licensing requirements. Prior to premises in order to qualify for an Another commenter asked whether this final rule, paragraph (a)(3)(iii) had exemption from licensing, rather than we meant four breeding female dogs of exempted ‘‘any person who maintains a set a limit on the number of breeding each breed on the premises, or four total of three (3) or fewer breeding females on the premises. breeding female dogs, total, regardless of female dogs, cats, and/or small exotic or As we discuss at greater length below, breed. wild mammals, such as hedgehogs, this exemption is based upon our A number of commenters suggested degus, spiny mice, prairie dogs, flying determination that individuals who that, if the term ‘‘total’’ is meant in a squirrels, and jerboas, and who sells maintain four or fewer breeding females partitive sense (i.e., four or fewer only the offspring of these dogs, cats, or on their premises and sell only the breeding female dogs, four or fewer small exotic or wild mammals, which offspring of these females are likely to breeding female cats, four or fewer were born and raised on his or her provide adequate care for these animals. breeding female small exotic or wild premises, for pets or exhibition, and is Breeding Females and Offspring: ‘‘Any mammals), the sentence should be not otherwise required to obtain a person who maintains a total of four or amended to make this clear. license.’’ The paragraph further fewer breeding female dogs, cats, and/or The exemption refers to the aggregate provided that the exemption did not small exotic or wild mammals. . . .’’ number of female dogs, cats, and/or extend to anyone in a household who A number of commenters asked what small exotic or wild mammals on the collectively maintains a total of more constitutes maintaining a breeding premises who are bred and whose than three breeding female dogs, cats, female on a premises. Several offspring are sold as pets. As we stated and/or small exotic or wild mammals, commenters asked if breeding females in the proposed rule, we consider regardless of ownership, nor to any that stay temporarily at a residence are someone who maintains four or fewer person maintaining breeding female considered to be maintained at the such females to be a low-risk facility. dogs, cats, and/or small exotic or wild residence. A few of the commenters What we meant by this was that, based mammals, on premises on which more stated that breeders should only be on our experience, an individual who than three breeding female dogs, cats, considered to maintain a breeding maintains four or fewer such females on and/or small exotic or wild mammals female at their residence when the his or her premises has demonstrated are maintained, nor to any person acting breeding female’s stay at the residence that they are capable of providing in concert with others where they does not have a fixed end date. All of adequate care and treatment for the collectively maintain a total of more these commenters asked APHIS to animals on their premises, so we do not than three breeding females, cats, and/ define or otherwise explain ‘‘maintain’’ consider Federal oversight to be or small exotic or wild mammals, in the final rule. necessary. regardless of ownership. In the A breeding female is considered to be Furthermore, interpreting the proposed rule, we increased the number maintained at their premises if it resides exemption in such a manner is not of breeding females that may be at that premises, even if temporarily. likely to adversely impact rural families maintained to four. That being said, as we discuss below, or anyone participating in FFA or 4–H (As noted earlier, we have revised our the threshold in this exemption applies activities. Most FFA and 4–H exhibitors proposed definition of retail pet store so only to dogs, cats, and/or small exotic sell their animals for agricultural that it no longer includes individuals or wild mammals that an APHIS purposes and/or in face-to-face who meet the criteria in § 2.1(a)(3)(iii). inspector has determined to be breeding transactions and thus are not dealers. However, we are revising and retaining females, and only applies to such They therefore do not need to claim an the direct retail exemption in females if their offspring are sold as exemption from licensing. § 2.1(a)(3)(vii), linking it to the retail pet pets. A number of commenters stated that store definition, and adding to the direct Breeding Females and Offspring: litter sizes for hobby breeds and small retail exemption the criteria in ‘‘Any person who maintains a total of breeds are considerably smaller than § 2.1(a)(3)(iii). In other words, the four or fewer breeding female dogs, cats, those for larger breeds, that four requirement regarding the number of and/or small exotic or wild breeding females are therefore too few to breeding females remains part of the mammals. . . .’’ maintain a viable breeding program, and retail pet store definition.) A number of commenters asked that setting the exemption at four would In the proposed rule, we solicited whether, by ‘‘total,’’ we meant four or accordingly encourage overbreeding of comments on our proposed change to fewer breeding female dogs, in total, the animals. They also stated that a lack

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of genetic diversity from having four or total number of breeding females, and should be considered a breeding female fewer breeding females would result in should specify the standards in part 3 only when it is an age at which it is offspring that would be less desirable to that apply to each class, e.g., ‘‘A class generally agreed her breed is capable of buyers seeking strong breed A–1 breeder has between 5 and 10 producing a live litter. characteristics. Others noted that small- breeding females, and must meet the A few commenters stated that most scale breeders typically do not breed requirements of §§ 3.7–11.’’ breeders do not breed their female dogs their dogs every estrus cycle. As a We are making no changes based on until they are old enough to have a female will produce offspring with the these comments. The number of viable litter and have passed all relevant same strengths and weaknesses each offspring that breeding females are health inspections, and stated that a time, such breeders will often wait until likely to produce annually did not factor female should not be considered a her female pups mature and then breed into our determination to propose breeding female until both of these the best of them in order to further raising the threshold in the exemption conditions have been fulfilled. improve the breed line. For these to four breeding females. Rather, this Other commenters agreed that a reasons, several breeders stated that 6 decision was based on our experience female dog that is sexually mature and breeding females is the minimum that an individual with four or fewer intact should not necessarily be necessary to have a viable breeding breeding females can generally be considered a breeding female, but did so program for their breed; other breeders considered a low-risk facility with for different reasons. Breeders of female stated that it should be 10, 12, or 20 for regard to animal welfare, so we do not show dogs stated that many their breed. One commenter stated that consider Federal oversight to be competitions require the animals to be USDA has historically acknowledged a necessary. sexually intact in order to be shown, but ‘‘tipping point’’ at 60 breeding females In addition, we recognize that that few show breeders breed their after which animal welfare violations depending on the species and the breeds animals during the time period that they become disproportionately common. within the species, animals can mature are exhibiting them. Other commenters The commenter asked why 60 had not at different rates. In determining the pointed out that a female dog may be been selected as the cut-off. number of eligible breeding females retired for any number of reasons (age, On the other hand, a few commenters maintained by a breeder, an APHIS number of litters produced to date, opposed our proposal to increase the inspector would consider each animal’s producing offspring with undesirable maximum number of breeding females age, health, and fitness for breeding. We characteristics), but still reside on a allowed under the licensing exemptions consider it impractical and unnecessary residence. These commenters stated that in § 2.1(a)(3)(iii) from three to four. Most to establish specific growth rate and a female dog should be considered a of those commenters stated that this breeding age standards for every breed breeding female only when it is actually change would allow breeders to produce and every species of pet animal. being bred. greater numbers of pets that could Breeding Females and Offspring: However, a number of commenters potentially be abandoned or sent to ‘‘Any person who maintains a total of pointed out the limitations of such an shelters and euthanized. One four or fewer breeding female dogs, cats, interpretation of ‘‘breeding female’’: Just commenter opposed the changes and/or small exotic or wild mammals. because a breeding female is not because the current number was put in . . .’’ currently being bred does not mean that place years ago for a reason, and that A considerable number of she will never be bred. The commenters reason, the commenter stated, has not commenters expressed uncertainty also noted that this interpretation could changed. about what APHIS considers to be a result in enforceability issues for Rather than simply raising the breeding female and asked us to define APHIS: A breeder could qualify for an number of breeding females allowed the term in the final rule. Many of these exemption one year, need to be licensed under the exemption to one of the commenters stated that ‘‘breeding’’ the next, and again qualify for an numbers suggested by commenters, a should not be considered equivalent to exemption the third. Another number of commenters suggested ‘‘sexually mature and sexually intact.’’ commenter pointed out that breeders do alternate amendments that, they stated, Several commenters cited health have ‘‘accident’’ litters from time to would better serve the needs of the concerns with having their dogs breed. time, so a breeder’s intent to not breed regulated community. One commenter One of the commenters pointed out that a female in a certain year may not supporting this approach stated that her female dogs become sexually mature actually mean that the female dog is not raising the number from three to four or at 6 months of age, but that breeding bred. fewer breeding females for pet fanciers them at that age would pose a serious While we recognize that breeders is irrelevant, because numbers change health risk to the female dog and had have several reasons for not breeding an within fancier practices in ways that are little possibility of resulting in a live intact female, for the purposes of different from a wholesale operation. litter. Other commenters raised a similar enforcement, APHIS has to assume that Similarly, a commenter stated that one point regarding older female dogs. A a female that is capable of breeding may set of regulations for all breeds of cats number of these commenters stated that be bred. However, in determining fails to consider the differences in ‘‘retired’’ female dogs should not count whether an animal is capable of growth rates and breeding ages among towards the total; many of these breeding, an APHIS inspector will take breeds. These commenters stated that commenters cited peer-reviewed into consideration a variety of factors, we should establish breed-specific articles 7 stating that keeping a retired including the animal’s age, health, and thresholds, or, at least, breed categories female sexually intact is conducive to fitness for breeding. with various thresholds (e.g., ‘‘Breeders animal health and welfare. A number of A few commenters pointed out that of a Category A dog may have no more commenters stated that a female dog any definition of ‘‘breeding female’’ than four breeding females; Category B, would likely exclude animals that six breeding females,’’ and so on). 7 The documents cited were: (1) Parvene should fall within its scope and include Another commenter stated that we Farhoody and M. Christine Zink. Behavioral and animals that should not. They stated Physical Effects of Spaying and Neutering Domestic should set the exemption from licensing Dogs (Canis familiaris). (2) Laura J. Sanborn, M.S. that the determination that an animal is at 4, but should create subclasses of Health Risks and Benefits Associated with Spay/ a breeding female should ultimately be licensees, set at thresholds based on the Neuter in Dogs. at an inspector’s discretion. Other

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commenters agreed that the breed, breeding females of that breed considered low-risk facilities with determination must be the inspector’s, that reside on his or her premises regard to animal welfare. but stated that APHIS should provide should not be considered breeding Several commenters stated that certain considerations that factor into females for purposes of this exemption, purebred breeders and breeders of this determination, at the risk of since the codes of ethics and guidance ‘‘custom’’ mixed breeds (e.g., otherwise appearing arbitrary and for those registries and organizations cockapoos) should be required to be capricious. One commenter stated that already provide adequate assurances of licensed, regardless of the number of these considerations should include animal welfare. breeding females on their premises, frequency of estrous cycles and the age We are making no changes in stating that these breeders were most at which the female could bear a litter. response to these comments. Sexually likely to overbreed their animals. Two other commenters stated that tests, mature and intact show dogs can always Our data suggests that it is the total such as the OFA, Penn Hip, thyroid, and be used as breeding females at some number of breeding female dogs recognized breed-related tests, should point after they are no longer shown. maintained on the premises, rather than factor into our determination regarding Additionally, breed registries vary the breed of dogs maintained, that is the whether an animal has the capacity to widely in how they oversee and inspect primary determinant in whether the breed. breeders within their organizations. premises is a low-risk facility. It is ultimately an APHIS inspector’s Several commenters suggested that Several commenters suggested that we responsibility to decide whether an sexually intact working dogs should not consider the number of puppies sold per year instead of counting the breeding animal is a breeding female, and this count towards the total number of females at a premises. Most of the decision must rely on a variety of breeding females. commenters suggested that this number factors. Inspectors currently rely on If sellers of such dogs also sell dogs should be 50 puppies produced per factors such as the animal’s age, health, at retail for pets, any female dogs bred year; a few commenters suggested and fitness for breeding in deciding to produce puppies for sale would be adjusting this number up or down, whether an animal is a breeding female. counted as breeding females. Moreover, in determining the animal’s depending on the breed. Two A cat breeder stated that, because only commenters suggested that the health status, inspectors may have 2 percent of owned cats are obtained recourse to recognized breed-related exemption be based on number of litters from pedigree breeders, breeding female and puppies sold; one of the tests. cats should not count towards the However, inspectors do not rely on commenters suggested setting the number of total breeding females on the the frequency of estrous cycles, which exemption at 10 litters and 50 puppies, premises for purposes of the regulations. are variable and influenced by many the other at 15 and 50. One commenter As we mentioned above, this factors. suggested, instead of the proposed One commenter stated that, since the exemption is intended for certain amendments to exemptions in decision that an animal is a breeding breeders who maintain few enough § 2.1(a)(3)(iii) in the proposed rule, that female is ultimately an inspector’s, this breeding females on their premises that we amend (a)(3)(iv) to read as follows: exemption presupposes that all breeding we consider them capable of providing ‘‘Any person who sells fewer than 50 females will be inspected by APHIS, adequate care and oversight for all dogs and/or cats per year, which were which the commenter stated cannot be animals on their premises. We have born and raised on the premises of a co- done. determined that this threshold is four owner of the breeding female or at a APHIS does not intend to conduct breeding female dogs, cats, and/or small facility owned by a licensed inspections of all potentially regulated exotic or wild mammals. We have no veterinarian in the jurisdiction either as entities and their breeding females all at evidence suggesting that cats should not pets or for research, teaching or testing once. We discuss this matter in greater factor into the threshold, nor do we purposes and is not otherwise required detail below. consider the percentage of cats obtained to obtain a license. This exemption does Another commenter asked how from pedigree breeders to be relevant to not extend to any person residing in a APHIS is able to determine that a female determining the threshold. household that collectively sells 50 or dog has been spayed based on visual One commenter stated that she more dogs and/or cats, regardless of inspection. intended to have several of her dogs ownership, nor to any person acting in APHIS inspectors rely on a variety of spayed in order to qualify for the concert with others, where they means to determine whether a female exemption, but would need some time collectively sell 50 or more dogs and/or has been spayed. One means is visual in order to accomplish this. She asked cats from a single property. The sale of inspection. Other options include how much time APHIS would afford any dog or cat not born and raised on reviewing veterinary records or other breeders to spay their dogs following the premises for research purposes documentary evidence, such as sales publication of a final rule before we requires a license.’’ The commenter receipts. began enforcing the ‘‘four breeding stated that this would effectively return Some commenters stated that certain female’’ limit. the number of regulated entities to that types of animals should not be The revisions to the exemption will of the time period before the Internet. considered breeding females for be effective when this final rule As we explained in the proposed rule, purposes of determining the total becomes effective. we have enforceability concerns number of breeding females on their A number of commenters stated that regarding an exemption based on premises. One commenter stated that all breeders with sexually intact females number of puppies sold: We cannot purebred dogs and show dogs should on their premises should have to be require individuals who are exempt not count towards the total number, licensed, and the exemption should from licensing to keep records regarding since the medical care and husbandry therefore be removed from the animal sales, but would need such provided to such animals exceed the regulations. recordkeeping in order to enforce the standards set forth in the regulations. We conclude from our experience exemption. No commenters suggested Similarly, other commenters stated that, with currently regulated entities that that such recordkeeping was if the breeder belongs to a registry or breeders who maintain four or fewer unnecessary for enforcement purposes, breeding organization for a particular breeding females can generally be nor did commenters suggest alternate

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means of obtaining the necessary of the number of breeding females they for co-ownership would not only information. maintain, but may still be exempt from significantly affect for-profit breeding Breeding Females and Offspring: licensing as a retail pet store depending operations, but would disrupt and ‘‘And who sells only the offspring of on the manner in which they sell the change longstanding, useful practices these dogs, cats, or small exotic or wild animals (i.e., face-to-face). Breeders who among pet fanciers that actually ensure mammals, which were born and raised sell breeding females for purposes other welfare through educating newcomers on his or her premises. . . .’’ than the six uses listed in the definition and sharing expertise in the long-term Several commenters stated that it is of dealer may also be exempt under this interest of better breeding. The common for a breeder to receive a rule. commenter added that the proposed puppy as compensation for lending an Several commenters stated that the rule would leave fanciers and all retail- animal out for stud services and then requirement that breeders can only sell sale breeders the options of selling only sell that puppy at a later date. The the offspring of dogs, cats, and other to on-premises buyers or limiting commenters pointed out that, in order to small mammals born and raised on their themselves to four breeding females. qualify for the exemption in premises for pets or exhibition is vague One commenter asked whether, if a § 2.1(a)(3)(iii), these breeders could not or unclear. One commenter, a dog breeder has multiple premises but has resell such puppies, and suggested that, breeding club, asked APHIS to provide no more than four breeding females at if breeders stopped engaging in this a clear statement of the meaning of any one location, he or she would be practice in order to qualify for the ‘‘born and raised on his or her required to be licensed. Another exemption, this would ultimately premises.’’ Several commenters were commenter pointed out that, if this impact genetic diversity in several uncertain how to apply the requirement exemption applies to each premises breeds. for puppies or other animals that were rather than to each breeder, regardless of While such individuals cannot qualify born at a veterinarian’s office, off the number of premises on which the for the exemption in § 2.1(a)(3)(iii), this premises, and then returned with their breeding females are maintained, this does not necessarily mean that they mother to the premises. could create a significant loophole that need to stop engaging in this practice in ‘‘Born and raised on his or her would allow puppy mills and other order to be exempt from licensing. The premises’’ means that a breeding female mass-producers to retain an exemption stud services may constitute brokering gives birth on the premises and that the from licensing by distributing their or breeding purposes and we would offspring are raised on that premises. breeding females among multiple need more information to determine the When enforcing this requirement, we premises. Several of these commenters purpose for licensing purposes. They consider the ownership of the animal asked us to specify in the final rule that may be exempt from licensing under and the ability to maintain control over co-ownership does not constitute acting another exemption in the AWA the animal. This would include medical in concert with another person to regulations. contingencies that may require a female maintain a breeding female. Several commenters stated that animal to deliver its offspring at a We acknowledge that co-ownership of breeders often sell a breeding female to veterinarian’s office. In such cases, breeding females is a standard practice individuals who are aspiring breeders or APHIS may request additional among small-scale residential breeders. who wish to add new bloodlines to their information to determine where the Provided that no more than four breeding program; one commenter animals are born and raised. breeding females are maintained on his stated that the occasional addition of Breeding Females and Offspring: or her premises, these individuals such bloodlines is necessary in order to ‘‘This exemption does not apply . . . to would qualify for the exemption in preserve genetic diversity in his breed. any person acting in concert with others § 2.1(a)(3)(iii). Other commenters stated that they where they collectively maintain a total occasionally sold ‘‘retired’’ breeding of more than three breeding female Comments on Removing § 2.1(a)(3)(vii) females to friends or acquaintances as dogs, cats, and/or small exotic or wild As noted above, we proposed to pets. A number of commenters mammals regardless of ownership. remove § 2.1(a)(3)(vii), which exempted suggested that we amend the paragraph . . .’’ from licensing any person who breeds so that both the breeding females and Several commenters stated that co- and raises domestic pet animals for their offspring may be sold. ownership is common in the hobby and direct retail sales to another person for We are not amending the paragraph in show dog breeding community. Many the buyer’s own use and who buys no the manner suggested by the small-scale residential breeders co-own animals for resale and who sells no commenter. The paragraph pertains to a animals with people who live in other animals to a research facility, an distinct category of breeders that APHIS locations. One commenter, a dog exhibitor, a dealer, or a pet store (e.g., has evaluated and determined to be low breeding club, asked APHIS to explain ‘‘dog and cat fanciers’’), on the grounds risk for noncompliance with the AWA. the meaning of ‘‘acting in concert with’’ that it was inconsistent with our The amendments requested by the and whether the term applies to co- proposed revision to the definition of commenters would expand the ownership of breeding females. One retail pet store. paragraph’s scope to include breeders commenter noted that when puppies are One commenter stated that we should that APHIS has not evaluated. raised for show or breeding, the breeder state in the final rule that removing the We note, however, that the will sometimes co-own a puppy with its exemption in § 2.1(a)(3)(vii) will subject commenters who stated that they sold new owner and mentor the owner on dog and cat fanciers to licensing and the breeding females as pets did not specify how to breed or show the dog. Another possibility of inspections, but will not where the breeding females were born commenter noted that when a show dog force them to comply with the standards and raised. The exemption allowance on is sold, breeding rights for the dog are in 9 CFR part 3. Several commenters the number of breeding females only often part of the sale, so that an animal suggested that we require dog and cat applies when dogs are sold that are born that is owned by the buyer remains on fanciers to follow the standards in part and raised on the seller’s premises. If the breeder’s property until it produces 3 that pertain to grouping, exercise, the breeding females were not born and a litter. feeding, watering, and cleaning, but that raised on the premises, the seller does One commenter noted that to deprive we exempt them from the facility not qualify for this exemption regardless retail breeders of a feasible exemption standards of that part, which are

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impracticable for breeders who raise to be lower than most breeders figure in the final rule, include rescue groups animals in their homes. Specifically, a them to be. within the definition, and exempt all number of commenters cited the Finally, a commenter stated that the non-profit organizations from licensing. standards in § 3.2 regarding impervious rollout of the final rule should be As we noted earlier, private rescues materials and § 3.6 regarding whelping accompanied by a supporting document and shelters tend to operate under a areas as being cost-prohibitive for most or educational campaign for small-scale business model in which animals residential breeders. Several of these residential dog and cat breeders in best available for sale or adoption are commenters suggested that we amend practices for breeding and care. The physically present at a predetermined part 3 in the final rule to establish commenter said that many breeders will location where the public is encouraged alternate, performance-based standards want to comply with the regulations, to meet and inspect the animals; this for dog and cat fanciers and other small- but, because of unfamiliarity with the business model is consistent with what scale residential breeders. AWA, will need instruction. we consider a retail pet store to be, and We are making no changes in APHIS already provides such fits within the scope of our definition of response to these comments. The education as part of its prelicensing a retail pet store. As a result, most comments were predicated on an process and existing stakeholder private rescues and shelters have assumption that it will be cost- outreach. historically been exempted under the prohibitive for most residential breeders Requests for Additional Exemptions retail pet store exemption and will who are regulated as a result of this rule A few commenters stated that we continue to be exempted as long as they to meet the standards in part 3; we do needed to add additional exemptions to meet the amended definition of retail not consider that to be the case. We paragraph (a)(3) of § 2.1. pet store. discuss this at greater length in the Many commenters stated that we However, private rescues or shelters economic analysis that accompanies should amend the regulations to specify that are operating in a manner that this final rule. that animal rescue groups should be requires them to be licensed as dealers One commenter suggested that we exempt from licensing because such must be treated in a manner that is should delay the effective date for groups have business models that are consistent with our regulation of all removing the exemption until we vastly different from those of retail other licensed dealers. This includes consult with residential breeders and dealers. They pointed out that the goal paying licensing fees and adhering to explain what structural modifications of such groups is to preserve animal the standards in part 3 of the AWA they will need to make to their welfare rather than to breed animals for regulations. residences so that they comply with the profit. A few commenters stated that we Oversight and Enforcement regulations in part 3. should make a distinction between non- We are not delaying the effective date. profit and for-profit rescue groups, and A number of commenters believed As we note in the economic analysis, exempt the former from licensing. that we had greatly underestimated the many residential breeders will continue On the other hand, several number of newly regulated entities in to be exempt from the regulations, and commenters stated that rescue groups our initial regulatory impact assessment as noted by several commenters, many should not be exempt from licensing and questioned whether we had who are not exempt are already solely because of their mission. Some of sufficient personnel to enforce the operating in a manner that is consistent these commenters pointed out that both provisions of the proposed rule. A with the AWA. Accordingly, they will profit and non-profit rescue groups number of commenters stated that, likely need to make only minor often request substantial adoption fees before conducting all the inspections structural changes to their facilities to to recoup the costs of maintaining the necessary to enforce the proposed rule, be in compliance with AWA standards. group. Several other commenters APHIS would have to hire additional One commenter suggested that we acknowledged the good intentions of inspectors. One commenter stated that ‘‘grandfather in’’ all existing residential rescue groups, but stated that many our ability to enforce the proposed rule breeders as retail pet stores, and require groups overreach and end up is hampered by our restrictive definition licensing only for new residential overcrowded with rescued animals. The of inspector in § 1.1, and that we should breeders. commenters also pointed out that many expand the definition to include State We are making no change in response rescues rely on volunteers to provide employees and third parties authorized to this comment. The commenter’s care for the animals and that reliance on by APHIS. Other commenters noted that suggestion would privilege existing volunteer efforts could result in gaps or APHIS had provided no indication of breeders over new breeders. significant disparities in the care how it will fund expenditures for A number of commenters stated that, provided. additional personnel. if APHIS needed to require them to be Some commenters suggested On the other hand, a commenter regulated and licensed in order to alternatives. One commenter suggested supporting the proposed rule ensure animal welfare, APHIS should that we require rescue groups to be commented that APHIS is capable of take measures to ensure that the impact licensed, but that we waive licensing handling the enforcement responsibility of such licensing has as minimal an fees for such groups. Another of the proposed rule without hiring effect on such breeders as possible. One commenter suggested exempting them large numbers of additional personnel. commenter suggested that we limit the from the facility standards of part 3. A The commenter acknowledged that the licensing fee for purebred dog and cat third commenter suggested that we number of additional facilities that fanciers and other small-scale breeders amend the regulations so that all ‘‘Class would be subject to licensing under this to $10 yearly. A’’ breeders have to enter into a trust rule would be difficult to determine. We expect that many small-scale fund agreement with APHIS at licensing They noted, however, that even if the breeders will remain exempt from and renewal, with the money in the new regulation doubled the number of licensing and will therefore not need to agreement dedicated to licensing for operations subject to USDA regulation, pay a licensing fee. However, we note in non-profit rescue groups and other non- the inspection burden would merely the economic analysis prepared for this profits. Another commenter suggested return to approximately the level that rule that the costs of licensing are likely that we define non-profit organization was handled by USDA in 2008.

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APHIS’ plan is to incorporate newly whenever they move interstate and to existing AWA regulations. One affected entities into our existing allow spot audits of those records to commenter pointed out that the 2010 regulatory structure using a phased determine which breeders to inspect. USDA OIG audit 8 (referred to below as implementation for conducting initial Another commenter stated that breeders the OIG audit) referenced in the prelicensing inspections and should have to report any land or proposed rule found that few, if any, compliance inspections. Factors we storage spaces they maintain and go first-time violators of the AWA were would consider when determining through a background check and subject to an enforcement action, even when and how frequently such provide references in order to maintain for those found to be in direct violation inspections would take place include, a license. of the Act. The commenter suggested but are not limited to: (1) Whether an APHIS does not require exempted that penalizing all first-time offenders entity has applied for a USDA license; breeders to report such information would decrease recidivism, would (2) whether an entity is already subject cited by the commenters. However, we further animal welfare within the to some degree of State, county, or local are authorized to inspect the records of United States, and could obviate the oversight, and the nature of that licensed entities. need for the proposed rule. oversight; and (3) whether an entity is Several commenters supporting the We continue to review and improve the subject of a legitimate complaint and rule asked why pet stores are not subject the manner in which we assess the nature or severity of that complaint. to licensing and inspection under the penalties, consistent with our response We will conduct periodic compliance regulations. Some of those commenters to the OIG audit. However, we continue inspections based on a risk-based expressed concern about inhumane to maintain that this rulemaking is inspection system that calculates the conditions in pet stores and necessary in order to ensure that our level of risk of noncompliance. recommended that they be subject to definition of retail pet store is consistent Because of this phased monitoring and inspection. Some with the AWA. implementation, we do not consider it commenters stated that pet stores We invited comments on an necessary to amend the definition of should be prohibited from selling alternative regulatory scheme presented inspector to allow APHIS to use non- puppies and adult dogs, and to lesser in the proposed rule that would APHIS employees to serve as inspectors. extent cats, as a means to reduce the minimize APHIS oversight of entities A number of commenters asked how demand for animals from commercial already subject to State, local, or we would identify newly regulated breeders. industry oversight. A number of entities. One commenter suggested that Under the AWA, retail pet stores are commenters, including several State we conduct spot checks of advertised exempt from regulation. agricultural officials, noted that many breeders to confirm that they are either Another commenter stated that all States already require licensing of licensed or qualify for an exemption. locations in which pet animals are sold commercial dog and cat breeders. The Several commenters suggested that we should be required to have a licensee commenters stated that Federal develop a dealer registry and require all on-site at all times, and that this oversight of breeders would likely be sellers or breeders to submit contact licensee should have all veterinary duplicative, contradictory, and information, along with the appropriate records of the animals on the premises confusing. Several commenters stated licensing fee or a written statement available for review at all times; the that APHIS should withdraw the rule in explaining why they were exempt from records maintained by this licensee favor of establishing a cooperative licensing. However, a commenter would facilitate traceback in the event Federal-State program that relies warned that adding newly regulated of possible animal welfare abuses. primarily on State officials to provide entities to our database will take a Under the AWA, APHIS already oversight of dealers and breeders, with sizable investment of Animal Care requires licensed breeders to maintain APHIS providing guidance and workforce hours and asked if APHIS such records, but we only require that coordination at the Federal level. considered the costs of doing so. a licensee be available to present However, a number of commenters We will identify newly regulated records during business hours. Breeders disagreed, noting that State regulations entities using our current methods, exempted from licensing have no such are in many cases insufficient to provide which include reviewing marketing or recordkeeping requirements. for the welfare of animals sold as pets. promotional material in the public One commenter suggested that APHIS Many of these commenters pointed out domain, self-identification, and pilot a voluntary inspection program for that withdrawing the proposed rule and complaints. Implementation of this rule newly regulated dealers, in which deferring to States would simply will take into consideration the dealers would agree to be inspected in maintain the status quo, and that the workforce hours that it will take to add exchange for assurances from APHIS OIG audit clearly indicates that the newly regulated entities to our database. that violations discovered during this status quo does not adequately provide A commenter requested that we inspection would not result in fines or for animal welfare. For this reason, a investigate unlicensed ‘‘puppy brokers’’ penalties. Other dealers would be number of the commenters stated that who transport and sell puppies for inspected based on complaints of abuse, State animal welfare officials should not commercial breeders who raise puppies and would not be exempt from be used as inspectors for purposes of in rural, remote areas. The commenter penalties. enforcing APHIS regulations. stated that such brokers are transporting We have no plans to institute a A few breeders stated that, while they puppies to more populated areas so that voluntary inspection program. APHIS were not regulated stringently at the they can be sold out of private homes, will provide information upon request State level, they were subject to very for which the residents receive a to persons to help them assess whether stringent city or local regulations, and percentage of the profit. they need to apply for licensing and to APHIS investigates all credible offer guidance on complying with AWA 8 To view this audit, go to http://www.usda.gov/ reports we receive of unlicensed regulations. oig/webdocs/33002-4-SF.pdf. The major objectives activities involving sales of covered A number of commenters suggested of the OIG audit were to examine Animal Care’s that the need for inspections would be enforcement process against dealers that violated pets. the AWA and to review the impact of recent One commenter suggested that APHIS greatly reduced if APHIS increased changes that APHIS made to the penalty assessment require breeders to maintain a record of penalties for dealers who violate process.

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that these regulations obviated the need purebred dogs, while mixed-breed and commenters disagreed, pointing out that for further Federal regulation. The ‘‘designer’’ dogs such as yorkie-poos, APHIS has limited ability to petition breeders suggested a locality-by-locality puggles, and labradoodles, which are Congress to enact legislation. review of existing regulations prior to among the most popular varieties sold APHIS does not consider it necessary issuance of a Federal rule, and also online, appear to have no self-policing to amend the AWA in order to meet the encouraged us to claim selective registries. request of the commenter. preemption. We are making no changes in As we noted in the proposed rule, to response to the comments. While some Constitutionality and Legal Authority our knowledge 27 States and the District breed registries and other organizations Several commenters expressed of Columbia have enacted laws that maintain programs for oversight of concerns about the constitutionality of establish some form of humane welfare breeders, few, if any, have requirements the proposed rule. One commenter standards for animals kept at pet stores that address all categories of animal stated that Congress is not permitted to and sold at retail. We have provided welfare required under the AWA. delegate authority to Agencies to issue many of these States with guidance on Furthermore, as the one commenter rules with the force of law, and that the developing and enforcing their animal noted, many mixed-breed dog breeders rule therefore violates Section 1 of the welfare regulations. But while these appear to have no self-policing Constitution. States and several municipalities have registries. Congress is permitted to delegate such laws, none actually address all Other commenters pointed out that a authority to Agencies to issue rules. categories of welfare required under the number of States have puppy ‘‘lemon Another commenter stated that, AWA, including veterinary care, food laws’’ that protect consumers from the because APHIS has no evidence that all and water, proper sanitation, and financial losses incurred when buying a individuals engaged in Internet or sight housing. As a consequence, Federal sick dog, and stated that these consumer unseen sales are guilty of violations of oversight is necessary to ensure that protection laws have the effect of the AWA, subjecting those who are not AWA regulations are consistently securing animal welfare through market guilty to licensing amounts to a tax. The applied across all States. forces. Similarly, a few other commenter pointed out that, as an We should add, however, that if a commenters pointed out that, while not Agency of the Executive Branch, APHIS State has issued and is enforcing several all States have puppy ‘‘lemon laws,’’ all has no authority under the Constitution of its regulations under a category of States have laws that protect consumers to impose or collect taxes. welfare required under the AWA, we from fraud and deceptive marketing The AWA specifically authorizes the can adjust our own inspection practices, and that these laws could be assessment of licensing fees, which do frequency and procedures in that enforced at the State level in a manner not constitute a tax. category in ways that will reduce the that results in State inspections of A number of commenters stated that burden of duplicative regulations on dealers and breeders and imposes civil any change to the definition of retail pet breeders in that State. and criminal penalties for those dealers store that subjects their homes to In the proposed rule, we also invited and breeders who do not provide possible unannounced government comments from the public regarding the adequate care for their animals. Several inspections for AWA compliance idea of an exemption based on oversight of these commenters suggested that violates their Fourth Amendment rights from private organizations. Many APHIS conduct a State-by-State review against unlawful search and seizure. commenters stated that industry-run of animal welfare and consumer Section 2146 of the AWA explicitly programs provide adequate oversight of protection laws prior to issuing a final authorizes inspections of licensees to certain breeders and dealers, and that rule, and should claim preemption of determine compliance with the AWA. licensing and oversight by APHIS is State laws only for those States that However, such inspections are limited therefore unnecessary for these entities. have less stringent standards than those to only those areas that impact the well- One commenter, a national dog breeder that dealers would have to adhere to being of the animals, such as areas and fancier organization, noted that they under the provisions of the proposed where food and medicine for the maintain a purebred dog registry, that rule. On the other hand, a few animals are stored. members of that registry are subject to commenters stated that consumer One commenter stated that most routine inspections, and that ongoing protection laws do not provide animals sold as pets are born and moved enrollment in the registry requires assurances that animals are bred and within State boundaries. The continued adherence to a raised humanely, but solely provide commenter suggested that, since comprehensive care and conditions remedies for consumers when they interstate commerce does not occur in policy. Several commenters noted that purchase animals that turn out to be those instances, attending to the welfare they belonged to the registry or a similar unhealthy or are otherwise not what of those animals is outside of Federal breed-specific registry, and that they were portrayed to be. jurisdiction under the Tenth inclusion on the registries is in fact We are making no changes in Amendment and solely a State dependent on agreeing to regular response to the comments. ‘‘Lemon prerogative. inspections, recordkeeping laws’’ protect the economic interests of In issuing the AWA, Congress found requirements, and other welfare the buyer and do not meet the goals of that such intrastate commerce often safeguards. the AWA. substantially affects interstate However, a number of commenters Finally, one commenter suggested commerce. disagreed, stating that private that APHIS petition Congress to amend One commenter stated that the AWA organizations are not always capable of the AWA so that private entities could does not address privately owned adequate oversight of breeders. One bring suit against breeders, brokers, and property, nor does it provide that a commenter conducted a study on handlers for AWA violations. The retail business must permit customers to oversight by pet registry organizations commenter stated that any damages personally visit the seller’s property to and concluded that self-regulation awarded in a lawsuit could far exceed be considered a retail pet store. The attempts have been largely ineffective. the penalties under the AWA, and commenter also stated that there is no They also noted that registry would serve as a strong incentive to assumption in the AWA that animal organizations only monitor breeders of follow the regulations. However, a few welfare entails customers visiting a

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seller’s property and monitoring the these statements in the report out of analysis, which included an initial property for compliance with the AWA. context or relied on statements that regulatory flexibility analysis produced The AWA does not require retail pet were taken out of context in order to in accordance with the Regulatory sellers to allow customers to enter their justify the proposed rule, and that this Flexibility Act, to SBA prior to the property. A seller exempted as a retail was tantamount to legal dishonesty. publication of the proposed rule. pet store can indicate a place of APHIS drafted the proposed rule A number of commenters stated that business separate from his or her because the term retail pet store was the factsheet 9 contained several premises at which to sell pet animals at being understood and applied in a responses that contradicted the retail. manner that was inconsistent with the provisions of the proposed rule. Many One commenter stated that the rule AWA, in order to ensure that the of these commenters stated that the essentially restricts the ability to definition of retail pet store in our average person would not interpret the advertise the availability of animals for regulations was consistent with the ‘‘physical entry’’ provision of the sale by rendering it difficult to use the AWA. definition of retail pet store to allow Internet to engage in such sales, and that A commenter noted that the proposed face to face off-site transactions to occur. APHIS had failed to provide a rule makes references and comparisons One of these commenters also asserted compelling reason for such restrictions. to the Puppy Uniform Protection and that the factsheet appears to grant a The commenter stated that using the Safety (PUPS) Act. The commenter blanket exemption from licensing to all Internet to sell the animal constitutes stated that APHIS had assumed that the rescue groups, and that this exemption commercial speech and concluded that bill represents the will of Congress, and was neither explicit nor inferred within the rule violated the First Amendment pointed out that the bill has not been the proposed rule. right to free speech. signed into law and should not be In a similar manner, a number of The rule does not restrict the use of considered to have the force of law for commenters stated that the factsheet the Internet as a marketing or the sake of issuing regulations. interprets the facility construction communications tool. Rather, it revises The proposed rule made no standards of 9 CFR part 3 in a the definition of retail pet store to statements suggesting the PUPS Act had performance-based manner that the ensure that it stays consistent with the the force of law. regulations themselves, which are AWA. Two commenters stated that APHIS highly prescriptive, do not support. A few commenters noted that that the had failed to comply with the National Several commenters concluded that the 2010 OIG audit mentioned in the Environmental Policy Act (NEPA) in factsheet materially contradicts both proposed rule focused on large-scale, issuing the proposed rule. The first existing regulations and the provisions AWA-licensed problematic dealers and commenter stated that we had failed to of the proposed rule. The commenters not on small-scale breeders, and that examine the aggregate effects on the added that APHIS had made no attempt, APHIS inappropriately extrapolated environment that may occur if many in issuing the factsheet, to specify that from the report that breeders of all sizes breeders throughout the United States it is a ‘‘pararegulatory’’ document should be under Federal oversight for have to significantly alter their which, by definition, cannot have the the purpose of animal welfare. One residences in order to meet AWA force of law. The commenters further commenter noted that the USDA OIG’s standards. In a similar manner, the other stated that the factsheet provides finding regarding remote, Internet sales commenter stated that we had failed to evidence that APHIS’ interpretation of (Finding 5) was that ‘‘some large consider the environmental impacts on the proposed rule will be arbitrary and breeders circumvented [the] AWA by local communities that may occur capricious. For these reasons, the selling animals over the Internet,’’ and because of the proposed rule. commenters stated that the proposed stated that the OIG audit had broadly We followed NEPA and determined rule cannot be finalized and must be referred to these large-scale breeders as the proposed rule was categorically withdrawn. ‘‘Internet breeders’’ later in the report exempt from preparation of NEPA The factsheet was simply intended to for the sake of brevity. The commenter documentation because it outlined provide additional explanation about stated that, in the proposed rule, APHIS routine measures. The commenters who the provisions of the proposed rule for had construed the term ‘‘Internet stated that the rule would have such the public. It did not contradict the breeder’’ in an unqualified sense that is environmental effects believed that most provisions of the proposed rule. at odds with the meaning of the term in residential breeders would have to make Several commenters cited DDAL v. the OIG audit. significant structural changes to their Veneman as supporting an exemption In the proposed rule, we used the homes in order to comply with 9 CFR from licensing for all small-scale term ‘‘Internet breeders’’ only for the part 3; for reasons specified above and residential breeders. The commenters purpose of passing along factual in the economic analysis that asserted that APHIS had stated in DDAL information regarding the OIG audit’s accompanies this rule, we do not v. Veneman that hobby breeders do not findings and were not attempting to consider that to be the case. need to be licensed. assign a specialized meaning to the Similarly, a few commenters stated As we state elsewhere in this term. that APHIS failed to fulfill a statutory document, we do not consider the term The same commenter stated that the duty to ensure full compliance with the ‘‘hobby breeder’’ to be equivalent to a OIG audit had heavily redacted Small Business Act, including a small-scale residential breeder, nor was statements made by former Secretary of determination of impact under zoning it used in such a manner in DDAL v. Agriculture Ann Veneman in DDAL v. laws presented by federalizing a hobby Veneman. Veneman in order to suggest that and converting small-scale breeders to One commenter stated that Congress Internet sellers need to be licensed. The home-based businesses, and submitting has amended the AWA several times commenter provided Secretary certification to the Small Business since its promulgation, but never sought Veneman’s full transcript, which stated Administration (SBA) with a detailed to define ‘‘retail pet store’’ or otherwise that oversight is necessary but is already statement on the impact of the proposed restrict certain entities from considering being exercised by breed and registry rule on the affected ‘‘Small Businesses.’’ themselves to be retail pet stores. organizations. The commenter APHIS submitted the proposed rule concluded that APHIS had either taken and its accompanying regulatory impact 9 See footnote 4.

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It is our contention that our proposed Executive Orders 12866 and 13563 and possibility of sick or injured pet animals definition of the term retail pet store is Regulatory Flexibility Act being purchased sight unseen. When a consistent with the AWA. This final rule has been determined to buyer receives a sick or abused pet One commenter stated that the rule be significant for the purposes of animal, sight unseen, the responsibility had not been issued in accordance with Executive Order 12866 and, therefore, for correcting inadequate care has been Executive Order 13563. The commenter has been reviewed by the Office of effectively transferred from the seller to stated that APHIS failed to provide the Management and Budget. the buyer without the buyer’s scientific and technical basis for the rule We have prepared an economic knowledge or consent. If that buyer is and allow for a critique and evaluation analysis for this rule. The economic unable or unwilling to provide the pet of these bases. The commenter stated analysis provides a cost-benefit analysis, animal with needed care, a shelter may that it would be reasonable for someone as required by Executive Orders 12866 become the default caregiver for that to infer that the proposed rule was and 13563, which direct agencies to animal. A reduction in the number of based on anecdotal evidence. The assess all costs and benefits of available sick or abused pet animals received by commenter also stated that this failure regulatory alternatives and, if regulation buyers may reduce the number of such to provide the technical and scientific is necessary, to select regulatory animals sent to shelters. Public shelters basis for the rule, and to apparently rely approaches that maximize net benefits provide for the care of these unwanted pet animals, usually at local taxpayer on anecdotal evidence, was in violation (including potential economic, expense. Also, as noted by several of Section (2)(b) of the Executive Order. environmental, public health and safety commenters, neglected or abused pet Executive Order 13563 only requires effects, and equity). Executive Order animals confiscated from substandard regulatory Agencies such as APHIS to 13563 emphasizes the importance of breeding operations are often sent to state the scientific and technical basis quantifying both costs and benefits, of shelters to provide for their care. Newly for a rule if that basis exists. The reducing costs, of harmonizing rules, regulated commercial breeders working proposed rule was based on our and of promoting flexibility. Executive to comply with AWA regulations will determination that certain parties were Order 13563 also emphasizes the need increase the health and well-being of the construing the definition of retail pet for retrospective analysis of rulemaking. pet animals under their care. store in the AWA regulations in a Accordingly, USDA will carefully manner inconsistent with the AWA. In addition, when breeding operations monitor the implementation of this rule for which regulatory oversight is The commenter further stated that, by and will propose any changes that may insufficient fail to adequately provide failing to engage in dialog with those be necessary to both protect the welfare veterinary care for their animals, the who would be potentially regulated by of covered animals and to minimize buyer may subsequently incur greater the rule, we failed to meet the objectives undue burdens on the public. The costs associated with providing that care of Section (2)(c) of the Executive Order, economic analysis also examines the because needed care has been delayed. which suggests that, where feasible and potential economic effects of this rule The rule will benefit buyers of animals appropriate, Agencies should seek the on small entities, as required by the by providing regulatory oversight to views of entities likely to be affected. Regulatory Flexibility Act. The ensure that breeders provide necessary The commenter stated that he was not economic analysis is summarized veterinary care. aware that we had engaged in any below. Copies of the full analysis are Animals can carry zoonotic diseases meaningful dialog with potentially available on the Regulations.gov Web (diseases that can be transmitted regulated entities prior to issuance of site (see footnote 2 in this document for between, or are shared by animals and the rule, and certainly not in a manner a link to Regulations.gov) or by humans). The possibility of an animal proportionate to the scope of the rule. contacting the person listed under FOR carrying a zoonotic disease is reduced APHIS engaged the potentially FURTHER INFORMATION CONTACT. with adequate veterinary care, including regulated industries at length before This rule will primarily affect dog vaccinations. To the extent that issuing the proposed rule. Our outreach breeders who maintain more than four improved oversight reduces the activities included personal breeding females at their facilities, sell likelihood of pet-to-human transmission communications by telephone and in the offspring as pets, and whose buyers of zoonotic diseases such as rabies, the person. are not all physically present to observe public as a whole will benefit from the Other Comments the animals prior to purchase and/or to rule. The rule will also address the take custody of those animals after competitive disadvantage of retail We received many comments on purchase. The rule may also affect some breeders who incur certain costs by subjects that are outside the scope of cat and rabbit breeders. While the scope adhering to the AWA standards this rulemaking. Several of the of this rule applies to certain other regulations while retail breeders who do comments also requested changes that animals, based on our experience, most not operate their facilities according to are also outside the scope of the AWA, retailers of animals other than dogs will AWA standards may bear lower costs. among them a ban on the sale of pets, meet the amended definition of retail There is a great deal of uncertainty mandatory spaying or neutering and pet store and continue to be exempt surrounding the number of facilities that microchipping of all pets sold at retail, from regulation. will be affected by this rule, as we regulation of the Internet as a marketing The benefits of this rule justify its acknowledged in the proposed rule, and tool for pets, licensing of individuals costs. More pet animals sold at retail as evidenced in the public comments. who buy animals as pets and imposing will be brought under the protection of There are hundreds of distinct dog minimum requirements on those the AWA and monitored for their health breeds, and correspondingly large individuals, and titling for animals used and humane treatment. Improved numbers of dog breeders in the United in agility competitions. animal welfare will benefit buyers of States. Breeders with an online presence Therefore, for the reasons given in the pets and the general public in various are those most likely to be selling the proposed rule and in this document, we ways. Monitoring the health and offspring sight unseen and thus are are adopting the proposed rule as a final humane treatment of pet animals should more likely to be affected by this rule. rule, with the changes discussed in this reduce the number of pets receiving We estimate that there could be between document. inadequate care and reduces the 8,400 and 15,000 such dog breeders in

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the United States. This estimate is based pets, not for hunting, security, breeding, account, we estimate that there are on the assumption that for every five or other purposes; who maintain more between 2,600 and 4,640 dog breeders breeders identified by APHIS in online than four breeding females on their that may be affected by this rule. The breeder registries there is one other property; and whose buyers are not all following table highlights the criteria breeder that has not been identified who physically present to observe the used for identifying dog breeders also uses remote marketing methods. animals prior to purchase and/or to take potentially affected by this rule and the However, this rule will only affect custody of the animals after purchase. process used to calculate the number of those dog breeders who sell dogs as When these conditions are taken into such breeders:

POTENTIALLY AFFECTED DOG BREEDER CALCULATIONS—A BREEDER MUST MEET ALL CRITERIA BEFORE LICENSING IS REQUIRED

Row Category Criteria for inclusion 2 Calculation Range

(a) ..... Number of Listed Breeders 1 ...... All listed ...... 7,000 to 12,500. (b) ..... Inclusion of breeders not listed ...... For every five breeders listed, we assume one more (a) * 1.2 ...... 8,400 to 15,000. not listed who also has a remote marketing pres- ence. (c) ...... Breeder sells pets ...... 75% of breeders sell dogs as pets, i.e., not for hunt- (b) * 0.75 ...... 6,300 to 11,250. ing, security, breeding, etc. (d) ..... AND Breeder has more than 4 55% of breeders have more than 4 breeding females (c) * 0.55 ...... 3,465 to 6,188. breeding females. (e) ..... AND Buyer purchases dog sight un- 75% of breeders sell one or more dogs without the (d) * 0.75 ...... 2,599 to 4,641. seen. purchaser physically observing the dog before pur- chase and/or taking custody. 1 Two multi-breed breeder listings: www.puppysites.com and www.dogbreederregistry.com, and individual breed breeder listings for 160 indi- vidual breeds. 2 Expert judgment based on online breeder registries, public comments, and APHIS’ knowledge of industry practices.

The rule will also affect cat breeders $70. Identification tags for dogs and cats will be incurred due to this rule is also who maintain more than four breeding cost from $1.12 to $2.50 each. Other unknown. However, we can estimate the females at their facilities and sell the animals such as rabbits can be identified general magnitude of these costs by offspring as pets, sight unseen. Fewer by a label attached to the primary assuming the newly regulated entities than 2 percent of cats in the United enclosure containing a description of exhibit patterns of noncompliance States are purebred and raised by the animals in the enclosure. We similar to those of currently regulated breeders. We estimate that about 325 cat estimate that the average licensed wholesale breeders. We agree with breeders may be affected by this rule. breeder requires about 10 hours many comments we received that most The rule will also affect rabbit annually to comply with the licensing breeders that may be affected by this breeders who sell the offspring as pets, paperwork and recordkeeping rule are already substantially in sight unseen, which is not common. requirements. All newly licensed compliance. Rabbits are usually sold at auctions, breeders will incur these costs. We Based on our experience regulating exhibits, and fairs where the buyers are estimate these costs would be between wholesale breeders, the most common physically present. We estimate that no about $284 and $550 for a typical dog areas of regulatory noncompliance at more than 75 rabbitries may be affected breeder. Costs at the 3,000 to 5,000 prelicensing and compliance by this rule. newly licensed dog, cat, and rabbit inspections are veterinary care, facility Newly regulated breeders will be breeders for animal licensing, animal maintenance and construction, shelter subject to licensing, animal identification and recordkeeping could construction, primary enclosure identification, and recordkeeping range between $853,000 and $2.8 minimum space requirements, and requirements. In addition, affected million annually. cleaning and sanitation. We apply entities will be subject to standards for The newly regulated breeders will percentages of noncompliance for these facilities and operations, animal health also need to meet regulatory standards areas, multiplied by likely unit costs or and husbandry, and transportation. One concerning facilities and operations, cost ranges, to the estimated number of set of costs attributable to the rule will animal health and husbandry, and affected breeders described above to be incurred annually by all newly transportation. However, as arrive at a total cost range for the rule. regulated entities, such as licensing fees. acknowledged by a wide spectrum of We estimate that costs for coming into Other costs will depend on the manner commenters on the proposed rule, most compliance for currently noncompliant and extent to which entities are not breeders maintain their facilities well breeders could range from $2.9 million complying with the basic standards of above the minimum standards of the to $12.1 million in the first year, when the AWA. Some of these costs will be AWA. Therefore, the vast majority of both one-time structural changes will one-time costs in the first year, such as newly regulated breeders will only need occur and annual operational changes providing adequate shelter; others will to incur licensing, animal identification, will start. recur yearly, such as providing adequate and recordkeeping costs and not need to The rule will also affect some veterinary care. make structural and/or operational currently licensed wholesale breeders. The cost of a license for breeders is changes in order to comply with the Expanding the licensing exemption based on 50 percent of gross sales standards. Neither the number of from three or fewer breeding females to during the preceding business year. As entities that will need to make changes four or fewer breeding females could an example, if 50 percent of gross sales nor the extent of those changes is reduce the number of these licensees. are more than $500 but not more than known. Therefore, the overall cost of We expect that the number of current $2,000, the annual cost of a license is structural and operational changes that licensees that will fall below the

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exemption threshold following the Accordingly, we are amending 9 CFR primates, squirrels, ocelots, foxes, implementation of this rule will be very parts 1 and 2 as follows: coyotes, etc.; small. (3) Any establishment or person The majority of businesses affected PART 1—DEFINITION OF TERMS selling warmblooded animals (except are likely to be small entities. As birds, and laboratory rats and mice) for ■ explained, this wide range in total cost 1. The authority citation for part 1 research or exhibition purposes; is mainly derived from the uncertainty continues to read as follows: (4) Any establishment wholesaling surrounding the total number of Authority: 7 U.S.C. 2131–2159; 7 CFR 2.22, any animals (except birds, rats, and breeders that will need to become 2.80, and 371.7. mice); and licensed as a result of this rule and the ■ 2. In § 1.1, the definitions of dealer (5) Any establishment exhibiting pet number that will then need to make and retail pet store are revised to read animals in a room that is separate from structural or operational changes. It as follows: or adjacent to the retail pet store, or in derives to a lesser degree from the an outside area, or anywhere off the ranges in costs that are assumed will be § 1.1 Definitions. retail pet store premises. incurred by the newly licensed facilities * * * * * * * * * * to remedy instances of noncompliance. Dealer means any person who, in PART 2—REGULATIONS Executive Order 12372 commerce, for compensation or profit, delivers for transportation, or transports, This program/activity is listed in the except as a carrier, buys, or sells, or ■ 3. The authority citation for part 2 Catalog of Federal Domestic Assistance negotiates the purchase or sale of: Any continues to read as follows: under No. 10.025 and is subject to dog or other animal whether alive or Authority: 7 U.S.C. 2131–2159; 7 CFR 2.22, Executive Order 12372, which requires dead (including unborn animals, organs, 2.80, and 371.7. intergovernmental consultation with limbs, blood, serum, or other parts) for ■ 4. Section 2.1 is amended as follows: State and local officials. (See 7 CFR part research, teaching, testing, ■ a. By revising paragraph (a)(3)(i); 3015, subpart V.) experimentation, exhibition, or for use ■ b. In paragraph (a)(3)(ii), by removing Executive Order 12988 as a pet; or any dog at the wholesale the words ‘‘to a research facility, an level for hunting, security, or breeding This final rule has been reviewed exhibitor, a dealer, or a pet store’’; purposes. This term does not include: A ■ c. By revising paragraphs (a)(3)(iii) under Executive Order 12988, Civil retail pet store, as defined in this Justice Reform. It is not intended to and (a)(3)(vii); and section; any retail outlet where dogs are ■ have retroactive effect. The Act does not d. In the OMB citation at the end of sold for hunting, breeding, or security the section, by removing the words provide administrative procedures purposes; or any person who does not which must be exhausted prior to a ‘‘number 0579–0254’’ and adding the sell or negotiate the purchase or sale of words ‘‘numbers 0579–0254 and 0579– judicial challenge to the provisions of any wild or exotic animal, dog, or cat this rule. 0392’’ in their place. and who derives no more than $500 The revisions read as follows: Paperwork Reduction Act gross income from the sale of animals other than wild or exotic animals, dogs, § 2.1 Requirements and application. In accordance with section 3507(d) of or cats during any calendar year. (a) * * * the Paperwork Reduction Act of 1995 (3) * * * (44 U.S.C. 3501 et seq.), the information * * * * * (i) Retail pet stores as defined in part collection or recordkeeping Retail pet store means a place of 1 of this subchapter; requirements included in this final rule, business or residence at which the which were filed under 0579–0392, seller, buyer, and the animal available * * * * * have been submitted for approval to the for sale are physically present so that (iii) Any person who maintains a total Office of Management and Budget every buyer may personally observe the of four or fewer breeding female dogs, (OMB). When OMB notifies us of its animal prior to purchasing and/or cats, and/or small exotic or wild decision, if approval is denied, we will taking custody of that animal after mammals, such as hedgehogs, degus, publish a document in the Federal purchase, and where only the following spiny mice, prairie dogs, flying Register providing notice of what action animals are sold or offered for sale, at squirrels, and jerboas, and who sells, at we plan to take. retail, for use as pets: Dogs, cats, rabbits, wholesale, only the offspring of these guinea pigs, hamsters, gerbils, rats, dogs, cats, and/or small exotic or wild E-Government Act Compliance mice, gophers, chinchillas, domestic mammals, which were born and raised The Animal and Plant Health ferrets, domestic farm animals, birds, on his or her premises, for pets or Inspection Service is committed to and coldblooded species. In addition to exhibition, and is not otherwise compliance with the E-Government Act persons that meet these criteria, retail required to obtain a license. This to promote the use of the Internet and pet store also includes any person who exemption does not extend to any other information technologies, to meets the criteria in § 2.1(a)(3)(vii) of person residing in a household that provide increased opportunities for this subchapter. Such definition collectively maintains a total of more citizen access to Government excludes— than four breeding female dogs, cats, information and services, and for other (1) Establishments or persons who and/or small exotic or wild mammals, purposes. For information pertinent to deal in dogs used for hunting, security, regardless of ownership, nor to any E-Government Act compliance related or breeding purposes; person maintaining breeding female to this rule, please contact Mrs. Celeste (2) Establishments or persons, except dogs, cats, and/or small exotic or wild Sickles, APHIS’ Information Collection those that meet the criteria in mammals on premises on which more Coordinator, at (301) 851–2908. § 2.1(a)(3)(vii), exhibiting, selling, or than four breeding female dogs, cats, offering to exhibit or sell any wild or and/or small exotic or wild mammals List of Subjects in 9 CFR Parts 1 and 2 exotic or other nonpet species of are maintained, nor to any person acting Animal welfare, Pets, Reporting and warmblooded animals (except birds), in concert with others where they recordkeeping requirements, Research. such as skunks, raccoons, nonhuman collectively maintain a total of more

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than four breeding female dogs, cats, DATES: This rule is effective November reviewed its fixed assets rule as part of and/or small exotic or wild mammals 18, 2013. this process. regardless of ownership; FOR FURTHER INFORMATION CONTACT: In March 2013, the Board proposed * * * * * Pamela Yu, Staff Attorney, Office of amendments to the fixed assets rule to (vii) Any person including, but not General Counsel, National Credit Union make it easier for FCUs to understand.7 limited to, purebred dog or cat fanciers, Administration, 1775 Duke Street, NCUA has continually received who maintains a total of four or fewer Alexandria, Virginia 22314–3428 or questions about the fixed assets rule, breeding female dogs, cats, and/or small telephone (703) 518–6593. indicating there is some confusion about exotic or wild mammals, such as SUPPLEMENTARY INFORMATION: its application. For example, FCUs have hedgehogs, degus, spiny mice, prairie asked for clarification regarding the I. Background and Proposal dogs, flying squirrels, and jerboas, and II. Final Rule waiver process, and the provision that who sells, at retail, only the offspring of III. Regulatory Procedures requires an FCU to partially occupy these dogs, cats, and/or small exotic or unimproved property acquired for wild mammals, which were born and I. Background and Proposal future expansion. Accordingly, the raised on his or her premises, for pets A. Background Board proposed amendments to the or exhibition, and is not otherwise fixed assets rule to clarify the waiver The Federal Credit Union Act (FCU required to obtain a license. This and partial occupation requirements Act) authorizes an FCU to purchase, exemption does not extend to any and to improve the rule overall. The hold, and dispose of property necessary person residing in a household that proposed amendments did not make or incidental to its operations.1 NCUA’s collectively maintains a total of more any substantive changes to the fixed assets rule interprets and than four breeding female dogs, cats, regulatory requirements. Rather, they implements this provision of the FCU and/or small exotic or wild mammals, only clarified the rule and improved its Act.2 In general, an FCU may only regardless of ownership, nor to any overall organization, structure, and invest in property it intends to use to person maintaining breeding female readability. dogs, cats, and/or small exotic or wild transact credit union business or in mammals on premises on which more property that supports its internal II. Final Rule operations or serves its members.3 than four breeding female dogs, cats, A. Summary of the Public Comments on NCUA’s fixed assets rule: (1) Limits and/or small exotic or wild mammals the March 2013 Proposal are maintained, nor to any person acting FCU investments in fixed assets; (2) NCUA received 9 comments on the in concert with others where they establishes occupancy, planning, and proposed rule: 2 from credit union trade collectively maintain a total of more disposal requirements for acquired and associations, 6 from state credit union than four breeding female dogs, cats, abandoned premises; and (3) prohibits 4 leagues, and 1 from an FCU. All of the and/or small exotic or wild mammals certain transactions. commenters supported the proposal and regardless of ownership. For purposes of the rule, fixed assets are premises, furniture, fixtures, and indicated the amendments make the * * * * * equipment, including any office, branch fixed assets rule easier to understand. Done in Washington, DC, this 11th day of office, suboffice, service center, parking Specifically, commenters noted that the September 2013. lot, facility, real estate where an FCU plain language revisions and structural Edward Avalos, transacts or will transact business, office reorganization improve the readability Under Secretary for Marketing and Regulatory furnishings, office machines, computer of the rule and the newly added Programs. hardware and software, automated definitions enhance clarity and [FR Doc. 2013–22616 Filed 9–17–13; 8:45 am] terminals, and heating and cooling flexibility. Commenters also expressed BILLING CODE 3410–34–P equipment.5 support for the revised waiver provisions, noting the revisions improve B. March 2013 Proposal consistency within the regulation and NATIONAL CREDIT UNION Executive Order 13579 provides that allow FCUs to better understand the ADMINISTRATION independent agencies, including NCUA, waiver process. Several commenters, should consider if they can modify, however, offered suggestions for 12 CFR Part 701 streamline, expand, or repeal existing substantive changes to the regulatory regulations to make their programs more requirements in the current rule. RIN 3133–AE05 effective and less burdensome. For example, a number of commenters Additionally, the Board has a policy of urged the Board to consider increasing Federal Credit Union Ownership of continually reviewing NCUA’s or eliminating the current 5 percent Fixed Assets regulations to ‘‘update, clarify and aggregate limit on fixed assets. One AGENCY: National Credit Union simplify existing regulations and commenter asserted that computers, Administration (NCUA). eliminate redundant and unnecessary automated terminals, and other provisions.’’ 6 To carry out this policy, ACTION: Final rule. equipment should no longer be treated NCUA identifies one-third of its existing as fixed assets subject to the 5 percent SUMMARY: The NCUA Board (Board) is regulations for review each year and cap. Several commenters suggested the amending its regulation governing provides notice of this review so the current requirement to fully occupy federal credit union (FCU) ownership of public may comment. In 2012, NCUA premises acquired for future expansion fixed assets to help FCUs better should be eliminated from the rule. understand and comply with its 1 12 U.S.C. 1757(4). Also, one commenter asked that the requirements. The final rule does not 2 12 CFR 701.36. Board revise and extend the time frames make any substantive changes to those 3 12 CFR 721.3(d). for partially occupying improved 4 regulatory requirements. Rather, the 12 CFR 701.36. premises and unimproved premises 5 12 CFR 701.36(c). amendments only clarify the regulation 6 NCUA Interpretive Ruling and Policy Statement acquired for future expansion, which by improving its organization, structure, (IRPS) 87–2, as amended by IRPS 03–2, Developing and ease of use. and Reviewing Government Regulations. 7 78 FR 17136 (Mar. 20, 2013).

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