in-20250604-IR-345250279RAA: 317-460-0960

TITLE 345 INDIANA STATE BOARD OF ANIMAL HEALTH Regulatory Analysis LSA Document #25-279

I. Description of Rule 

a. History and Background of the Rule – On May 9, 2024 the United States Department of Agriculture – Animal and Plant Health Inspection Service (USDA-APHIS) published a final rule that makes changes to federal animal disease traceability regulations. 9 CFR Parts 71, 77, 78, and 86. The most significant change is to require that eartags applied to cattle and bison be both visually and electronically readable to be recognized as official eartags for interstate movement. The final rule also amends several definitions, adds recordkeeping requirements for individuals distributing official eartags, and clarifies how cattle and bison may be moved from a slaughter establishment in a manner that remains within slaughter channels. The last major update to the rule occurred in 2014, which similarly occurred to keep Indiana’s requirements consistent with federal law (LSA #14-57). b. Scope of the Rule – The proposed rule will amend the BOAH Official Forms rule to align the requirements for a certificate of veterinary inspection (CVI) with the federal regulations at 9 CFR 86.1. It amends the BOAH Animal Identification rule to require official eartags for cattle and bison to be readable both visually and electronically. It also requires a person who distributes official identification devices to enter the records into an approved database. It requires that records of official identification applied to animals by accredited veterinarians, licensed livestock markets, or licensed livestock dealers be kept in a readily accessible record system and sets forth standards for the board to access the records. It amends the BOAH Animal Movement rule to align certain definitions with the recent changes to the federal regulations at 9 CFR 86.1. It also amends requirements for cattle to move into the state, or intrastate, from a slaughter establishment in a manner that is considered within slaughter channels in the federal regulations at 9 CFR 86.4 and 9 CFR 86.5. It amends the BOAH Reportable Disease rule to require a laboratory to report a positive diagnosis of highly pathogenic avian influenza (HPAI) for all species. The rule amends the BOAH Chronic Wasting Disease (CWD) rule to allow an 840 microchip as official ID for reindeer in the USDA chronic wasting diseases herd certification program. An 840 microchip is a 15-digit microchip that begins with the prefix 8-4-0, which is the county code for the US. Only USDA approved companies are granted permission to produce these microchips. It amends the BOAH Johne’s Disease rule to align the individuals authorized to collect samples for Johne’s disease in cattle with the applicable USDA standards. The rule repeals 345 IAC 2.5-5-3 within the Tuberculosis Control in Cervidae rule to remove the tuberculosis testing requirement for intrastate movement of cervids. It amends the National Poultry Improvement plan (NPIP) rule to update the incorporation by reference of the USDA NPIP regulations. It amends the Scrapie rule to clarify that the identification requirement for wethers moving to an exhibition also applies to animals moving into the state. The rule also makes changes to the Commercial Dog Breeder and Broker (CBB) rule to align with changes to state law in the 2024 legislative session,1 c. Statement of Need – If the BOAH does not proceed with this proposed rule, it will have negative consequences for the regulated community. The proposed rule is necessary to implement a federal mandate. The state must ensure that its identification and documentation requirements for movement of livestock and poultry into the state align with the federal rule at 9 CFR Part 86.  Indiana's livestock and poultry producers rely on the BOAH to ensure that all identification and documentation requirements align with federal standards. If the requirements are inconsistent with these standards, it may jeopardize their ability to move their animals in commerce interstate or internationally. The BOAH's traceability program is subject to periodic tests by USDA-APHIS to ensure that the staff can quickly trace an animal's movements to demonstrate the state's ability to contain a disease of concern to animal or human health. If the appropriate intrastate identification and documentation requirements are not in place, it compromises the ability to successfully complete a trace investigation in accordance with federal standards. The requirement for cattle to bear electronic tags is critical to the national effort to ensure a speed of data retrieval that allows states to efficiently complete a trace investigation. The BOAH and their counterparts in other impacted states can better identify animals that may have come in contact with an affected animal, implement mitigation strategies, and thereby minimize the economic impact of outbreaks to the industry. The rapid tracing afforded by electronic identification (EID) helps states demonstrate  freedom from a high consequence disease and disposition of all infected and exposed animals, which is critical to keep Indiana animals and animal products entering commerce. The rule makes a series of changes to align Indiana’s animal health requirements with federal law. It changes the reportable disease rule at 345 IAC 1-6 to make HPAI a reportable disease for all species as required by a recent federal order issued by USDA-APHIS. The addition of a microchip as official ID for reindeer will align Indiana the federal regulations at 9 CFR 81.2. The change to the sample collection standards for the Johne’s disease program will align with the federal regulations at 9 CFR 80. The rule will repeal the intrastate tuberculosis testing requirement for cervids which is a state requirement that is not required by federal law. Finally, the rule will update the poultry article to incorporate the most recent version of the NPIP regulations at 9 CFR 145 through 9 CFR 147. d. Statutory Authority for the Proposed Rule –  The BOAH is responsible under state law to control the movement of animals into or within the state and develop programs for the  identification of animals to facilitate the prevention of disease. The board may implement programs for designating disease-free animals, herds, or flocks. The BOAH may cooperate with the USDA to prevent, detect, control, and eradicate diseases and pests of animals and adopt, in whole or in part, federal regulations that are necessary in fulfilling the board's duties under IC 15-17. To carry out these duties, it is critical that the board periodically update its rules to ensure that they align with federal standards and incorporate the latest technologies. The board has specific authority to adopt rules that are reasonable and necessary to discharge the duties imposed on the board by law and to implement the Animal Health and Animal Products article. IC 15-17-3-13. IC 15-17-3-21. e. Fees, Fines, and Civil Penalties – The rule does not add or increases any fees, fines, or civil penalties that would require the additional steps in IC 4-22-2-19.6.

II. Fiscal Impact Analysis

a. Anticipated Effective Date of the Rule –The public hearing is anticipated to occur at the BOAH’s July 2025 board meeting. If the board approves the final rule on this date, the anticipated effective date would be October 1, 2025. b. Estimated Fiscal Impact on State and Local Government – This rule makes amendments to the types of identification that are considered official for cattle and bison. It adds recordkeeping requirements for individuals that are distributing or using official ear tags. It also aligns Indiana’s movement requirements for cattle and bison leaving a slaughter establishment with federal law. These are minor amendments to Indiana's longstanding requirement for animals to be officially identified and accompanied by a CVI or alternate documentation for purposes of movement into the state or within the state. The agency already receives and processes this information to facilitate disease control. Therefore, although these changes may entail additional costs for certain producers, they will not create a fiscal impact to the state beyond the current costs of administering traceability programs. Many producers are already using electronic identification for cattle and bison, so the BOAH does not anticipate a significant reduction in costs to the state related to processing this information. c. Sources of Expenditures or Revenues Affected by the Rule – The proposed rule requires cattle to have electronic identification to move into or within the state that were not required to bear such identification under the BOAH's current rule. However, the cost of purchasing electronic eartags for animals is not paid by the state. It is the responsibility of the animal owner to pay the cost of obtaining official ear tags. The rule does not impose additional permitting and documentation requirements beyond what Indiana currently requires. Even if the rule did impose such requirements, the BOAH does not have fees associated with issuance of permits and processing of movement documentation. Additionally, because the BOAH currently enforces identification and documentation requirements for interstate and intrastate movement of animals, the agency does not anticipate any increase in costs related to enforcement of this rule.

III. Impacted Parties

The BOAH has 71,670 registered premises in the premises identification program. 30,584 of these premises have designated that they maintain cattle and bison. For the calendar year 2023, the BOAH has 2,719 export CVIs on file for a total of 131,715 head of US cattle and bison. Also for the calendar year 2023, the BOAH has 1,990 import CVIs on file for a total of 78,903 head of US cattle and bison. The BOAH has 3 cattle herds enrolled in the Johne’s disease program. There are 14,844 premises in Indiana with a designation that they maintain poultry. The NPIP program provides eligibility for both commercial and hobby flocks, so all poultry premises are considered impacted parties. The BOAH has 45 registered cervid herds and 196 CWD certified herds that would be impacted by the tuberculosis rule changes. The BOAH’s records indicate that 11 premises maintain reindeer. The BOAH has 50 licensed market facilities that are approved tagging sites and therefore authorized to apply official identification to animals. However, these parties are already in compliance because they are required to maintain identification records under the livestock dealer law, so they are excluded from the cost-benefit analysis. 345 IAC 7-3.5-9.1. There were 419 sheep imported into Indiana for 2023 with 26 known wethers. There were 864 goats imported into Indiana in 2023 with 8 known wethers. This is an approximate number because several of the CVIs did not indicate the sex of the animal. There are 1,094 type II federally accredited veterinarians with an active status. There are 187 commercial dog breeders and 7 dog brokers in the state CBB program.

IV. Changes in Proposed Rule

The proposed rule will align Indiana’s requirements for a Certificate of Veterinary Inspection (CVI) with federal law. In the 2nd Quarter of 2024, the BOAH processed 17,482 CVI movement documents. The vast majority of these are electronic CVIs on several approved platforms. This includes both “import CVIs” being sent to Indiana from the states of origin, and “export CVIs” which are being written by an Indiana veterinarian and sent by BOAH to the state of destination. The definition is being updated to better reflect the shift towards electronic movement documents. It is important for Indiana’s definition to align with the federal standards to avoid any concerns about an Indiana CVI being considered an acceptable official form across the US and internationally. The proposed rule will align Indiana’s official identification requirements for cattle and bison with federal law. Therefore, USDA requires cattle moving into the state to have electronically readable eartags, but the BOAH is also proposing to require electronic eartags for cattle and bison that are moving within Indiana. It is difficult for the BOAH to estimate how many cattle owners will be impacted by the change to the intrastate official identification requirement. BOAH’s movement rule currently requires the seller, lessor, or owner and the purchaser, lessee, or recipient of cattle and bison that are sold, leased, bartered, or exchanged to maintain a record of the transaction for five (5) years. Because these records are maintained by the individual and only provided to BOAH upon request, the BOAH does not have an estimate to provide regarding the number of cattle being moved within the state annually. The proposed rule will require a person who distributes official animal identification to enter the records into a database approved by the USDA. The BOAH currently enters this information for tag distributors in Indiana that contact the agency, and this is a compliance option under the federal regulations. However, the proposed rule aligns with the federal law and establishes that the duty is on the individual to ensure that the records are entered into a USDA-approved database. The proposed rule requires federally accredited veterinarians to keep records of official identification applied to animals in a readily accessible record system. Because this is a federal mandate and most veterinary clinics are already maintaining these records for other purposes, this is excluded from the cost-benefit analysis. The proposed rule states the BOAH must be provided with prompt access to traceability records, but this is stated to clarify this duty of impacted parties and is expressly authorized in state statute. IC 15-17-3-15. The proposed rule amends the definition of “dairy cattle” to include dairy cross bred cattle. This is a federal change that incorporates current USDA-APHIS guidance. The rationale for this change is that these animals are reared under the same management practices as purebred dairy cattle, which puts these animals at an increased risk of disease transmission. The proposed rule aligns Indiana’s interstate, intrastate, and slaughter channel requirements with federal law. This change will clarify under what conditions cattle and bison may leave a slaughter establishment. Specifically, it states that they may only be moved to another approved slaughter establishment or feedlot and must be accompanied by an owner shipper statement that contains certain information about the animals and movement. The purpose of this additional language is to ensure that there is enough information about the movement for the BOAH to confirm that the animals have remained in slaughter channels, which is a critical to protecting the state from high consequence diseases of animals. Federal law currently requires the official identification number of sexually intact dairy cattle of any age to be recorded on a CVI. The proposed rule will require the official identification number for all dairy cattle of any age to be recorded on a CVI. This change, combined with the amended definition of “dairy cattle”, will impact producers shipping and receiving dairy steers and spayed heifers, including offspring of dairy cattle that are defined as beef/dairy cross calves. The BOAH does not estimate an increase in compliance costs for the change to the federal requirement. These animals must already bear official ID regardless of whether it is recorded on the CVI. In addition, a BOAH rule currently requires Indiana sellers and buyers to keep records of all animal IDs for cattle they sell or buy. IC 15-17-15-2; 345 IAC 1-3-7.6. It amends the BOAH Reportable Disease rule to require a laboratory to report a positive diagnosis of highly pathogenic avian influenza (HPAI) for all species. Because this is required by the Federal Order Requiring Testing for and Reporting of HPAI in Livestock (April 24, 2024), this is excluded from the cost-benefit analysis. Because the state and USDA work collaboratively with the National Animal Health Laboratory Network (NAHLN) this does not impose additional requirements on animal owners, laboratories, or veterinary practitioners. However, it is important that the state’s reporting rule aligns with USDA-APHIS for domestic and international trade purposes. The rule amends the BOAH Chronic Wasting Disease (CWD) rule to allow an 840 microchip as official ID for reindeer in the United States Department of Agriculture (USDA) chronic wasting disease herd certification program. This is adding a compliance option for reindeer owners that exists under federal law and is a preferred means of officially identifying these animals. It amends the BOAH Johne’s Disease rule to align the individuals authorized to collect samples for Johne’s disease in cattle with the applicable USDA standards. This change expands the options for who can collect official tests, which will ease the burden for those cattle owners who choose to participate in this voluntary program. The proposed rule repeals 345 IAC 2.5-5-3 within the Tuberculosis Control in Cervidae rule to remove the tuberculosis testing requirement for intrastate movement of cervids. The testing requirement was put into place in November 2009 in response to incidences of tuberculosis in captive deer. The BOAH is making this change in response to the reduced prevalence of this disease in captive cervids. The proposed rule amends the National Poultry Improvement plan (NPIP) rule to update the incorporation by reference of the USDA NPIP regulations. It is important that the BOAH incorporate the most recent version of the NPIP for hobby flock owners to move poultry to exhibitions. It is also critical for Indiana poultry companies to have NPIP as a compliance option to move poultry and poultry products in domestic and international commerce. Because these are federal program requirements, they are excluded from the cost-benefit analysis. Federal law does not require any form identification for wethers under eighteen (18) months of age moving interstate. However, Indiana has an existing requirement that wethers under eighteen (18) months of age moving within the state to an exhibition to have a unique form of identification. BOAH is proposing also require out-of-state individuals moving wethers into the state to an exhibition to have those animals uniquely identified. The proposed rule changes the definition of “commercial dog breeder” from more than 20 to more than 19 unaltered female dogs that are at least 12 months of age. It changes the definition of “commercial dog broker” to an entity that is either a (1) USDA Class B licensee; or (2) sells 500 dogs in a calendar year. Both changes will align these definitions with recent changes to the CBB statute. IC 15-21-1.

V. Benefit Analysis

a. Estimate of Primary and Direct Benefits of the Rule – The proposed rule directly benefits animal health and public health. As stated above, the rule improves traceability of cattle and bison movements in the state by updating the rule to allow only electronically readable eartags. This change benefits animal health because it enhances the ability to quickly locate and quarantine animals that may carry a disease and prevent other animals from being exposed. The rule benefits public health because often a trace involves a zoonotic disease; therefore, the ability to quickly locate and quarantine exposed animals enhances food safety by ensuring that these animals do not enter slaughter channels. The ability of the state to quickly and effectively trace exposed animals directly benefits business competitiveness. Indiana's livestock industry depends on the ability of the BOAH to quickly isolate exposed animals to contain a disease. If the state is not able to perform this function, it jeopardizes the health of their animals and the ability to market their products both domestically and internationally. In an animal health emergency, domestic and international buyers will expect assurances that the animals and products they are purchasing have not been exposed to a disease of concern. If the state is not able to quickly trace and quarantine exposed animals, it is not possible for Indiana businesses to provide these assurances. According to the USDA-APHIS Regulatory Impact Analysis, benefits of the traceability system rest on largely unknown probabilities of disease occurrence and reactions by domestic and foreign markets. Given the large number of diseases that could affect cattle and bison populations, and uncertainty about the economic impacts of outbreaks of these diseases, it is difficult to quantify the benefits of transitioning from visual to EID eartags. However, use of EID eartags significantly reduces the amount of time it takes animal health officials to complete a trace investigation, which involves knowing where diseased and potentially exposed animals are, and where they have been. Animals that may have come in contact with an affected animal can number in the thousands or tens of thousands. Transitioning from visual to electronic identification devices may significantly reduce the time it takes animal health officials conducting a trace to scan animals in a herd during a disease response. Interviews conducted by APHIS Veterinary Services suggests that transitioning from visual to electronic identification devices can cut the time it takes to scan animals in a herd by approximately 50%.2 The USDA estimates that, if there is a one in a hundred chance of a $6 billion outbreak occurring each year, and if the transition from visual only to EID tags decreased the damages associated with outbreaks by 50%, the marginal benefit of the proposed rule would be approximately $30 million dollars per year.  Their study assumes that the benefits associated with the federal rule are proportional to 1) the cost of the disease, 2) the disease incidence (i.e. the probability that a disease occurs in any given year), and 3) the percent reduction in damages associated with the shift from visual eartags to EID. When outbreaks of a high consequence disease occur, the use of EID eartags can help limit their size and scope, thus reducing the number of animals that are depopulated, the impact to producers and communities, and the probability that trade restrictions are imposed. b. Estimate of Any Cost Savings to Regulated Industries – The BOAH anticipates that the repeal of the TB test requirement for intrastate movement of cervids will provide cost savings to regulated entities. The BOAH has 241 premises registered with the agency that maintain captive cervids. 188 of these herds maintain a TB-accredited status, which includes 7,910 animals. Animals in these herds can move interstate or intrastate without an individual test. Therefore, it is difficult to quantify an exact number of animals moving intrastate between accredited herds. It is also unknown how many of these herds maintain their status exclusively for purposes of intrastate movement, but it is unlikely that the number of TB-accredited herds will decline because of the repeal of the intrastate requirements. The total cost to maintain this status depends on the number of head. If there is an animal that is being moved from a non-accredited herd, the owner will not have to pay for an individual TB test. The average cost to TB test deer is $45-$60 per head. This includes the lab fee, vet hourly fee, vet paperwork fee, and vet farm visit. It is also important to note that deer must be sedated to be tested, which presents a safety risk to the animal. If there are 53 herds that are not TB-accredited and estimate that each of those herds move 3 cervids intrastate per year, the total annual cost saving is $8,347.50 (159 animals x $52.50 average testing cost).

VI. Cost Analysis

a. Estimate of Compliance Costs for Regulated Entities – There are two components of this rule that are not federally mandated. The first change is the requirement that cattle moving within the state bear electronically readable eartags. As mentioned above, the BOAH has 30,584 cattle and bison premises registered in Indiana. The USDA has estimated that 11 million head of US cattle are tagged with non-EID tags each year. This represents approximately 11-12% of the cattle and bison in the US. The USDA has calculated an average cost of $30.45 per cattle or bison operation each year to transition for non-EID tags to exclusively EID. Using this figure, the BOAH estimates the total cost for Indiana cattle producers to comply to be $111,753 [(30,584 x 0.12) x $30.45]. It is important to note that small cattle producers may be able to work through an association to capitalize on bulk discounts for EID tags, such as cooperative buying. The EID tags are also printed with a visual number. Therefore, a producer does not have to have a wand reader to use an EID tag. The second component of the proposed rule that is not federally mandated is the requirement that wethers under eighteen (18) months of age moving to an exhibition be uniquely identified. As mentioned above, this is already required for Indiana sheep producers. This change merely requires out-of-state producers to similarly uniquely identify these animals when moving into the state for exhibition. Based on known numbers, this would impact a small number of producers annually (26 sheep wethers and approximately 8 goat wethers entered the state for exhibition in 2023). With an average price of $12/tag, the total annual cost of compliance is $408 (24 animals x $12.00). b. Estimate of Administrative Expenses Imposed by the Rules – The proposed rule requires a person that distributes official animal identification devices to enter the records of whom the devices were distributed into a USDA-approved database. The proposed rule also requires a federally accredited veterinarian, licensed livestock  market, or licensed livestock dealer to keep records of tags applied to animals in a readily accessible record system. These are federally mandated requirements. In addition, accredited veterinarians are already collecting this information in their medical records, and most are maintained within a system where they are readily accessible in a disease outbreak. As discussed above, licensed livestock markets and dealers are already required to maintain traceability records under the state livestock dealer law. IC 15-17-14. If a paper CVI is being used, the requirement that all dairy cattle of any age must have official ID recorded on the CVI may increase administrative costs. Specifically, it could entail time for the producer to transmit handwritten IDs to the veterinarian so that the veterinarian can record those IDs on the CVI. However, when the IDs are electronic, there are options to reduce the administrative costs by using electronic means of reading, transmitting, and recording the CVIs. For example, a wand reader can scan animal IDs, export that data from the wand into an Excel spreadsheet that the veterinary clinic can upload into a free electronic CVI platform to add those animal IDs to the CVI in only a few minutes. The cost of a wand reader ranges from $75.00 to $1,500 depending on the features of the device. c. The fees, fines, and civil penalties analysis required by IC 4-22-2-19.6 – The proposed rule does not add or increases a fee, fine, or civil penalty.

VII. Sources of Information

United States Department of Agriculture – Animal and Plant Health Inspection Service (USDA-APHIS), 89 FR 39540, Use of Electronic Identification Eartags as Official Identification in Cattle and Bison, May 9, 2024:  https://www.federalregister.gov/documents/2024/05/09/2024-09717/use-of-electronic-identification-eartags-as-official-identification-in-cattle-and-bison Federal Order Requiring Testing for and Reporting of Highly Pathogenic Avian Influenza (HPAI) in Livestock , April 24, 2024; https://www.aphis.usda.gov/livestock-poultry-disease/avian/avian-influenza/hpai-detections/livestock/federal-order BOAH Premises Identification Program 345 IAC 1-2.5 https://www.in.gov/boah/traceability-and-premise-id/

VIII. Regulatory Analysis

There are two requirements in the proposed rule that are not required by federal law and therefore a part of the cost benefit analysis: a. Electronic ID for intrastate movement of cattle - The BOAH has made a determination that the benefits that enhanced animal traceability provides are likely to exceed the compliance costs for impacted parties ($111,752 annually). b. Official ID for movement of wethers into the state for exhibition – The use of EID eartags in out of state sheep coming to Indiana exhibition will ensure that a trace of a diseased animal can occur quickly and accurately, thus reducing the economic impact to Indiana sheep producers. The BOAH has made a determination that the benefits that enhanced animal traceability provides are likely to exceed the compliance costs for impacted parties ($408 annually). There is a repeal of one requirement that is not required by federal law: a. Repeal of intrastate TB testing over cervids - The repeal of the intrastate tuberculosis (TB) testing requirement will provide a total estimated annual cost saving of $8,347.50. The BOAH has made a determination that the cost saving to cervid owners outweigh the agency’s need for the test requirement given the reduced prevalence of the disease in farmed cervids.

IX. Contact Information of Staff to Answer Substantive Questions

Sarah A. Simpson, JD General Counsel sasimpson@boah.in.gov 317-460-0960 _________________________