WSR 15-18-115
PROPOSED RULES
DEPARTMENT OF AGRICULTURE
[Filed September 2, 2015, 8:52 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 15-13-128.
Title of Rule and Other Identifying Information: Chapter 16-610 WAC, Livestock brand inspection.
Hearing Location(s): Washington state Department of Agriculture (WSDA), Conference Room 238, 21 North First Avenue, Yakima, WA 98902, on October 8, 2015, at 11:00 a.m.; and at the Washington State Dairy Products Commission, 4201 198th Street S.W., Lynnwood, WA 98036, on October 13, 2015, at 11:00 a.m.
Date of Intended Adoption: November 16, 2015.
Submit Written Comments to: Teresa Norman, P.O. Box 42560, Olympia, WA 98504-2560, e-mail WSDARulesComments@agr.wa.gov, fax (360) 902-2092, by 5:00 p.m., October 13, 2015.
Assistance for Persons with Disabilities: Contact WSDA receptionist by October 2, 2015, TTY (800) 833-6388 or 711.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department proposes to amend chapter 16-610 WAC to develop an electronic cattle transaction reporting system for milk producers licensed under chapter 15.36 RCW by establishing (1) criteria for utilizing the system, (2) fees to support the system, and (3) conditions of licensure.
Reasons Supporting Proposal: Animal disease traceability (ADT) in Washington relies on data collected mainly from two existing WSDA programs – our livestock inspection and animal health programs. While the livestock inspection program was historically created to verify ownership and protect assets, the information gathered by the program has become crucial for tracking in-state animal movement, something that is key for traceability. The ability to develop an electronic cattle transaction reporting system for dairy producers increases data collection necessary for ADT, while complimenting industry practices.
Statute Being Implemented: Chapter 16.57 RCW.
Rule is not necessitated by federal law, federal or state court decision. Title 9 Code of Federal Regulations.
Name of Proponent: WSDA, governmental.
Name of Agency Personnel Responsible for Drafting and Implementation: Lynn Briscoe, Olympia, (360) 902-1804; and Enforcement: David Bangart, Olympia, (360) 902-1946.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
Small Business Economic Impact Statement
SUMMARY OF PROPOSED RULES: WSDA's livestock inspection program is proposing to amend chapter 16-610 WAC.
The livestock inspection program is dedicated to providing asset protection for the livestock industry by recording brands, licensing feedlots and public livestock markets, and by conducting surveillance and inspection of livestock at time of sale and upon out-of-state movement. The purpose of this chapter is to regulate and govern the livestock inspection program and livestock industry.
The proposed amendments to this chapter include: Add language for the electronic cattle transaction reporting (ECTR) system.
SMALL BUSINESS ECONOMIC IMPACT STATEMENT (SBEIS): Chapter 19.85 RCW, the Regulatory Fairness Act, requires an analysis of the economic impact proposed rules will have on regulated businesses. Preparation of an SBEIS is required when proposed rules have the potential to impose more than minor costs on businesses.
"Minor cost" means a cost that is less than one percent of annual payroll or the greater of either .3 percent of annual revenue or $100.
"Small business" means any business entity that is owned and operated independently from all other businesses and has fifty or fewer employees.
INDUSTRY ANALYSIS: The proposed rule impacts businesses that fall under the North American Industry Classification System codes corresponding to the regulated industry: 112120, Dairy cattle and milk production; 112130, Dual–purpose cattle ranching and farming; 424520, Cattle merchant wholesalers.
INVOLVEMENT OF SMALL BUSINESSES: Small businesses have been involved in writing the proposed rules and in providing the department with the expected costs associated with the changes. The department has been working with industry members, discussing ADT since 2007 and specifically discussing an alternative reporting system for dairy cattle since early 2014. There have been a number of work sessions with industry members and presentations at industry meetings. Along with existing efforts, a small business economic impact assessment survey was mailed to four hundred thirty-three dairy producers to analyze the economic impact of proposed rules on small businesses. WSDA analyzed how the fee associated with the ECTR system would impact the dairy industry in the state.
COST OF COMPLIANCE: RCW 19.85.040 directs agencies to analyze the costs of compliance for businesses required to comply with the proposed rule.
The program has analyzed the cost of compliance anticipated by regulated small businesses. Twenty-one small businesses and one large business returned the small business economic impact survey. Ninety percent of small businesses and one hundred percent of the large businesses surveyed indicated that the $1.30 per head fee assessed with the electronic cattle reporting system would have an impact. Fifty percent of small businesses and zero percent of large businesses indicated that they would need additional resources; and twenty percent of small businesses and zero percent of large businesses thought they may lose sales or revenue to comply with the laws.
The cost of a brand inspection on the class of cattle covered is $1.60 per head. The cost to report transactions on the class of cattle covered utilizing the electronic cattle transaction reporting system is $1.30 per head.
JOBS CREATED OR LOST: Under RCW 19.85.040, agencies must provide an estimate of the number of jobs that will be created or lost as the result of compliance with the proposed rules.
In collecting information from representative small businesses through the survey the program estimates that zero percent of small businesses and zero percent of large businesses indicated that they would need to increase staff. Ten percent of small businesses and zero percent of large businesses indicated that they will need to decrease their current staff by at least one employee to comply with the proposed changes.
DISPROPORTIONATE IMPACT TO SMALL BUSINESSES: RCW 19.85.040 directs agencies to determine whether the proposed rule will have a disproportionate cost impact on small businesses by comparing the cost of compliance for small business with the cost of compliance for the ten percent of the largest businesses required to comply with the proposed rules. Use one or more of the following as a basis for comparing costs:
• | Cost per employee; |
• | Cost per hour of labor; or |
• | Cost per one hundred dollars of sales. |
The program has opted to look at cost per one hundred dollars of sales as a basis for comparing costs. The program has analyzed the cost of compliance anticipated by regulated small businesses.
The following questions were asked and then charted for businesses that may experience impact from the $1.30 per head fee assessed with the electronic cattle reporting system per language from chapter 16-610 WAC:
• | How much does your business expect to pay to comply with the rule? |
• | What kinds of resources will the business likely need i.e., equipment, supplies, labor increased administrative costs or professional services? |
• | Will the business lose sales or revenue? If yes, how much revenue will be lost? |
• | Will the estimated cost of compliance be more than "minor" (defined as more than 3/10 of one percent of annual revenue; or more than $100; or more than one percent of annual payroll)? |
Question: How much does your business expect to pay to comply with the rule?
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Question: What kinds of resources will the business likely need i.e., equipment, supplies, labor increased administrative costs or professional services?
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Question: Will the business lose sales or revenue?
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Question: Will the estimated cost of compliance be more than "minor" (defined as more than 3/10 of one percent of annual revenue; or more than $100; or more than one percent of annual payroll)?
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CONCLUSION: To comply with chapter 19.85 RCW, the Regulatory Fairness Act, the livestock inspection program has analyzed the economic impact of the proposed rules on small businesses and has concluded that, depending upon the number of cattle sold per year, the costs may be more than minor (greater than $100.00), but there is no disproportionate impact between small and large businesses. The department will work with affected businesses for potential ways to mitigate costs for small businesses.
Please contact Dawn Grummer if you have any questions at (360) 902-1987 or e-mail dgrummer@agr.wa.gov.
A copy of the statement may be obtained by contacting Dawn Grummer, P.O. Box 42560, Olympia, WA 98504-2560, phone (360) 902-1987, fax (360) 902-2087, e-mail dgrummer@agr.wa.gov.
A cost-benefit analysis is not required under RCW 34.05.328. WSDA is not a listed agency in RCW 34.05.328 (5)(a)(i).
September 2, 2015
Lynn N. Briscoe
Assistant Director
AMENDATORY SECTION (Amending WSR 15-02-026, filed 12/30/14, effective 7/1/15)
WAC 16-610-020 Cattle inspections for brands or other proof of ownership.
(1) All cattle must be inspected for brands or other proof of ownership:
(a) Before being moved out of Washington state, unless the provisions of WAC 16-610-035(2) apply.
(b) When offered for sale at any public livestock market or special sale approved by the director.
(c) Upon delivery to any cattle processing plant where the United States Department of Agriculture maintains a meat inspection program, unless the cattle:
(i) Originate from a certified feedlot; or
(ii) Are accompanied by an inspection certificate issued by the director, or a veterinarian certified by the director, or an agency in another state or Canadian province authorized by law to issue such a certificate.
(2) All cattle entering or reentering any certified feedlot licensed under chapter 16.58 RCW must be inspected for brands or other proof of ownership before commingling with other cattle unless the cattle are accompanied by an inspection certificate issued by the director, or a veterinarian certified by the director, or an agency in another state or Canadian province authorized by law to issue such a certificate.
(3) All cattle must be inspected for brands or other proof of ownership at any point of private sale, trade, gifting, barter, or any other action that constitutes a change of ownership. For transactions involving cattle not being moved or transported out of Washington state:
(a) Cattle must be presented for an inspection within fifteen days from the date of the initial transaction and accompanied by a certificate of permit. It shall be the responsibility of the seller to notify the department immediately that a sale has occurred. It shall be the responsibility of the buyer to present the animals for inspection.
(b) Cattle sold for 4-H and FFA youth projects are exempt from the fifteen day inspection requirement and can be inspected, if not prior, when consigned to a terminal show.
(c) Until the earlier of January 1, 2016, or the date of notice that an electronic livestock movement reporting system is available for use, individual private sales of unbranded female dairy breed cattle involving fifteen head or less are exempt from the inspection requirement.
(4) Individual private sales, trades, gifting, barter, or any other action that constitutes a change of ownership of unbranded dairy cattle are required to obtain inspections under this section except when the seller holds an electronic cattle transaction reporting license under chapter 16.57 RCW and reports transactions through that system.
(a) Transactions involving dispersal or liquidation sales, or covered by subsection (1) and (2) of this section, or cattle being moved or transported out of Washington state, may not be reported electronically and inspection is required.
(b) For purposes of this section, "dairy cattle" means all cattle, regardless of age or sex, that are in use to produce milk or other dairy products for human consumption including, but not limited to, breeds such as Ayrshire, Brown Swiss, Holstein, Jersey, Guernsey, and Milking Shorthorn.
(c) License:
(i) Holders of a valid milk producers license under chapter 15.36 RCW may apply for an electronic cattle transaction reporting license. Applications shall be made upon a form provided by the department to include:
(A) Milk producers license number;
(B) First and last name of the holder of the milk producer license;
(C) Active e-mail address, phone number, and mailing address for the licensed milk producer; and
(D) Business name, physical address, mailing address, and phone number.
(ii) Upon approval of the application, the director will provide the licensee with system authorization to begin utilizing the electronic cattle transaction reporting system.
(iii) As a condition of licensure, the electronic cattle transaction reporting licensee consents to up to two site visits per year. The purpose of a site visit is to conduct examinations and inspections of cattle and any associated records for movement verification. Records must be kept for three years and include information such as, but not limited to, cattle origin and destination, official individual identification tag number of each cattle sold, breed and sex of cattle sold, and date the transaction occurred. Site visits will be conducted during normal business hours and scheduled in advance. Time and mileage fees as described in WAC 16-610-065 will be assessed at the time of each site visit and will be collected from the licensee.
(iv) The director may deny, suspend, or revoke an electronic cattle transaction reporting license for failure to comply with any condition of licensure under this section or any requirement of this chapter or chapter 16.57 RCW.
(d) Reporting:
(i) All transactions reported to the department through the electronic cattle transaction reporting system must be reported within twenty-four hours of the transaction and include the following information:
(A) Buyer's name, phone number, and physical address of destination;
(B) Buyer's e-mail address if available;
(C) Number of cattle sold;
(D) Official individual identification tag number of each cattle sold;
(E) Breed and sex of cattle sold; and
(F) Date the transaction occurred;
(ii) Only dairy cattle that are officially identified with a green tag per RCW 16.57.160(3), an animal identification number radio frequency tag, a brucellosis vaccination metal tag, or a brucellosis vaccination radio frequency tag may be reported electronically.
(iii) A fee of one dollar and thirty cents per head will be assessed for electronically reported transactions, along with any other applicable fees including, but not limited to, the fees listed in subsection (5) of this section. The fees are due and collected at the time of reporting through the electronic cattle transaction reporting system.