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COST-BENEFIT ANALYSIS In performing a cost-benefit analysis, each rulemaking entity must provide the information requested for the costbenefit analysis to be considered a good faith effort. The cost-benefit analysis must be submitted to the Office of Policy, Research and Regulatory Reform at least five (5) days before the administrative hearing on the proposed rule. For all questions, please attach all underlying data that supports the statements or figures stated in this costbenefit analysis. DEPARTMENT: CCR: 1201-11 Agriculture AGENCY: DATE: Animal Industry 8/10/10 RULE TITLE OR SUBJECT: PACFA-12.00 DOG BREEDING FACILITY, 18.00 ANIMAL SHELTER Benefits of the Proposed Rule(s)/Amendment(s) 1. Please provide the statutory authority, and detailed statements indicating the need for the proposed changes. (This statement should include specific issues such as specific changes in statutes or the subject matter area, market failure, a compelling public need, risks to the health, safety or welfare of Coloradans, lack of efficient and effective performance of an important government function, or other specific problem(s) that are being addressed by the proposed rule(s).) Please include the number of complaints you received (if any) that spurred you to take regulatory action. The Pet Animal Care Facilities Act was established by the legislature in 1995 to protect the health and well being of those animals in pet care facilities, and gives the Commissioner of Agriculture the authority to promulgate rules. It has become a model program for states across the country and continues to be the most comprehensive regulatory program for pet care facilities in the US. The wide variety and scope of the facilities licensed within this program make it unique in many ways. It is this range of operational types that make estimating cost difficult, and for this reason the following analysis will make the best effort to provide cost information. Benefits to the health and well being of animals is a subjective measure that lacks definitive units but instead is measured by observation of behavior and other general health indicators. Considerations made when proposing rule change were the health and welfare of animals, correcting or clarifying existing language, and changes in industry standards or practices that need to be reflected in the rule. The statutory authority for this rule change comes from title 35-80-109(2)(a) and (b). Proposed change to 12.00 B. 1. B. Coated wire is less likely to rust and is easier to clean and sanitize than bare wire surfaces. The surface of coated wire is also thought to be less abrasive to the animal as it stands or lays on the surface. This change will increase the minimum standard for facilities of this type and should make these businesses more competitive in the national market since the consumer demand in the pet trade is moving toward enhanced animal care standards with better protections for the animals. The department received more than 3000 requests from members of the public for a change to the rule that would eliminate wire flooring in pet animal enclosures. Since regulation of these facilities began in 1995 there have been cases of animals being injured due to the wire flooring used in the enclosure, and a failure of cleaning and sanitation due to the corrosion of bare wire surfaces. Since wire flooring itself does facilitate sanitation in the enclosures by allowing waste and fluids to fall away from the animal’s resting area, the rule change is attempting to protect the animals while maintaining sanitation standards. Proposed change to 12.00 B. 1. d. 1. The proposed changes to language regarding indoor temperatures were intended to remove confusion and the possibility of misinterpretation, and do not make substantive changes to the existing need to cool or heat an indoor facility. Through the use of mechanical air movement and natural ventilation most facilities are currently able to maintain indoor temperatures below 90˚F and as such do not have a requirement to provide additional cooling systems or HVAC. The rule applies only to indoor facilities because these types of facilities are not required to provide any sort of protection from heat or cold within the animal’s enclosure. The enclosure itself simply must hold the animal in an appropriate sized space and be easily cleaned and sanitized. It may be true that some dogs can tolerate temperatures below 50˚F for periods of time; however, there are no published guidelines and even within breeds there are exceptions. A determination of acclimation is difficult to establish and enforce. Even if acclimated, most dogs are more comfortable and experience less stress if their climate can be regulated especially in an indoor facility. Abuses to the existing rule include un-insulated, unheated, naturally ventilated buildings housing small breed or short haired dogs year round in areas where interior temperatures can reach below freezing for many hours. Heat should be provided for the dogs within the building since the enclosures themselves are not required to be adequate to enable the dog to retain body heat. Proposed change to 12.00 B. 1. d. 5. An isolation area as defined by the existing rule needs only to be a portion of an existing facility that can be made separate to control modes of disease transmission. Occasionally, even in closed breeding kennels, infectious or contagious disease will become a problem. Requiring a kennel to make provisions for such an event protects the animals residing at the facility. There is no requirement to provide additional area with the exception of the ability to separate a space when an occurrence of disease is ongoing. Members of the industry are in support of this requirement as they can see the benefit to their business and their animals. Several incidents of canine brucellosis outbreaks in breeding kennels could have been limited in spread if such an area were provided. Proposed change to 12.00 B. 1. e. 1. The change is meant to clarify the existing policy and regulation used to require shade covers in outdoor facilities. The experience in the program has shown that while the interior of a shelter in an outdoor facility may provide shade, the temperature inside soon becomes too hot for comfort and the animals do not spend time using the shelter. Facilities that house dogs outdoors should provide shelter and shade areas that are separate. If dogs have free access from their outdoor enclosure to an indoor enclosure then shade covers are not required. This change is consistent with current USDA requirements for shade covers in outdoor facilities. Proposed change to 12.00 B. 1. f. 2. The primary enclosures referred to are those enclosures in which a breeding dog is allowed to spend their entire life, with the exception of whelping, and not receive additional exercise. Rarely do these enclosures contain only one dog, some house up to five with only one half the total space for each additional dog. The existing size requirements do not take into account pre-manufactured products readily available and in many cases one would need to order custom made products to achieve the current size. The new requirement increases the size of the enclosure by 2 to 4 square feet but does so in a way that allows for the use of ready- made products. The department has received more than 3000 requests from the public for change and complaints regarding this particular rule. Proposed change to 18.00 C. 2. f. (3) This enclosure size for cats residing in animal shelters comprises the space required for the entire length of the animal’s stay at the facility. In some cases this is the life of the animal. Cats are not required to be provided exercise outside of their enclosure in any part of the existing rule, thus in the best interest of those cats held in facilities for extended periods, larger cage sizes can allow for some increased ability to move about, can reduce stress and provide multiple areas for the cat to rest. After discussion with sheltering agencies, it was agreed to consider larger sized enclosures and more size categories to account for the trend toward greater numbers of large adult cats entering shelters and staying in the shelter for extended periods of time. Problems encountered during inspections include overall cage sizes not meeting the minimum for the size of the cat, cage accoutrements decreasing the available floor space for cats to move and exercise, and overcrowding with multiple cats. The appearance of overcrowding or overcrowded facilities represents one of the most frequent complaints received within the program for all facility types. Proposed change to 12.00 B. 1. f. 3. and 4. Solid surface requirements are proposed for whelping and nursery enclosures to protect the small feet and legs of newborn pups as well as weaned pups. Whelping and nursery enclosures typically have wire or mesh flooring to allow waste to fall away; however, currently a wire or mesh surface that is efficient at removing waste has holes that are large enough to allow small feet and legs to be trapped. Problems encountered during inspections include wire mesh flooring that is adequate for the size of the dam does not protect the limbs of neonatal pups and can affect their ability to thermo regulate due to increased air flow around their body. Proposed change to 12.00 C. 2. i. The requirement to identify each dog in a kennel follows the previous addition of maintenance records for each permanent resident of a kennel, and although it was requested by the industry as a change in the previous round, it was overlooked at that time. The basis for this change is to enable more consistent enforcement of existing veterinary care and daily treatment and observation requirements. This requirement is consistent with national requirements and allows for a variety of methods at the discretion of the facility owner. Proposed change to 12.00 B. 1. c. 2. Waivers for special allowances or variances from the minimum standards of care and housing should only be available to those demonstrating an ability to reasonably comply with all other requirements. Those facilities with disciplinary actions due to non-compliant issues should not expect waivers to avoid compliance with minimum standards. A disciplinary action would only follow the failure of the facility to comply with regulations after repeated warnings and inspections. The percentage of facilities with one or more noncompliant issues upon inspection is 70-80%, those with repeated violations leading to disciplinary actions is 510%. Only those facilities with ongoing disciplinary action would not be considered for a waiver, this change would not currently affect any facility which has a waiver. The current regulation has a requirement for a maintenance record to be kept for each permanent resident of a kennel, such record includes a description of the animal, veterinary care and illness and injury information. The addition of an exercise log can be incorporated here with a small amount of additional time required. The purpose of the written plan and the documentation of exercise of the dogs will help gain a better understanding of the type of work these dogs perform and enforce the existing rule which states that only arctic type dogs used for the purpose of pulling sleds can be considered for a waiver to the enclosure standard. Documentation of this type of information will assist in the fair and consistent enforcement of the regulations. Proposed change to 18.00 C. 2. b. 1 The proposal to remove the ability to use wire or mesh flooring in animal shelters was made by the statewide association representing licensees in this category. Humane groups and animal welfare organizations are opposed to the use of wire or mesh in any animal enclosure and wished to set the standard for their industry. 2. Please list the top three benefits of the proposed regulation; explain how the proposed regulation results in the expected benefits; and if the proposed regulation reduces or eliminates the problem(s) listed above. Proposed change to 12.00 B. 1. B. Since this change will increase the minimum standard for facilities of this type it should make these businesses more competitive in the national market since the consumer demand in the pet trade is moving toward enhanced animal care standards with better protections for the animals. Open mesh cage floors do allow waste material to fall away from the animal contact surface and thus in some cases reduce the frequency of cleaning necessary. The coated wire will enhance sanitation and further protect the feet of animals that live continuously on this surface. These requirements exceed those of USDA and have been recommended to decrease injury and chronic lameness which can be related to continuous exposure to wire flooring. Proposed change to 12.00 B. 1. d. 1. Even if acclimated, most dogs are more comfortable and experience less stress if their climate can be regulated especially in an indoor facility. This proposal is consistent with the current USDA requirements for indoor facilities which are recognized as climate controlled. The proposal should represent no additional costs over and above what a facility owner is already required to provide which is “sufficient heating or cooling to protect animals from cold or heat to provide for their health”. The goal of the change is to make it clear to facility owners that an indoor building needs to have provisions for heating and cooling to protect the health of the animals. This new language should help clarify the differences in requirements between indoor and outdoor facilities, without putting into place unverifiable restrictions or exceptions. Proposed change to 12.00 B. 1. d. 5. Occasionally, even in closed breeding kennels, infectious or contagious disease will become a problem. Requiring a kennel to make provisions for such an event protects the animals residing at the facility. This will decrease the infection rate, which will lower treatment costs and will use less staff time caring for animals. The savings and benefit to the facility owner will be great due to the ability to control the spread of disease through the kennel. Proposed change to 12.00 B. 1. e. 1. The change is meant to clarify the existing policy used to require shade covers in outdoor facilities. Facilities are currently being required to provide shade cover separate from the shelter structure so no additional costs to the owner should be incurred. This change is consistent with current USDA requirements for shade covers in outdoor facilities. The proposed amendment clarifies the difference between shelter and shade requirements in outdoor facilities. Proposed change to 12.00 B. 1. f. 2. Benefits for the animals include increased space to move and exercise thus reducing stress and unwanted behavior. The proposed sizes more closely parallel the USDA standard for enclosures in which dogs can reside without receiving additional exercise. This amendment will increase the sizes for enclosures in which dogs can reside and bring the requirement into greater consistency with existing building material sizes. Proposed change to 18.00 C. 2. f. (3) Cats are not required to be provided exercise outside of their enclosure in any part of the existing rule, thus in the best interest of those cats held in facilities for extended periods, larger cage sizes can allow for some increased ability to move about, can reduce stress and provide multiple areas for the cat to rest. This amendment is proposed by the industry that will be affected by the change and is seen as being in the best interest of the animals. Proposed change to 12.00 B. 1. f. 3. and 4. Solid surface requirements are proposed for whelping and nursery enclosures to protect the small feet and legs of newborn pups as well as weaned pups. A solid surface in the nursery will help accustom pups to a variety of surface substrates thus preparing them for life outside of the kennel environment as well as providing a surface on which they can rest and retain body heat. This requirement exceeds the current national standard to afford better protections to the young animals, thus increasing the competitiveness of Colorado’s breeders in the national industry. Proposed change to 12.00 C. 2. i. The basis for both of these changes is to enable more consistent enforcement of existing veterinary care and daily treatment and observation requirements. Inspectors and veterinarians can more easily track the care of individual dogs that are permanently identified. This requirement is consistent with national requirements and allows for a variety of methods at the discretion of the facility owner. The purpose of the written plan and the documentation of exercise of the dogs kept on tethers will help gain a better understanding of the type of work these dogs perform and enforce the existing rule which states that only arctic type dogs used for the purpose of pulling sleds can be considered for a waiver to the enclosure standard. Without training plans and documentation the inspectors are unable to determine which dogs at a facility are being used and which are simply being housed in the same manner as convenience. Proposed change to 12.00 B. 1. c. 2. Only those facilities with ongoing disciplinary action would not be considered for a waiver, this change would not currently affect any facility which has a waiver. Violations noted on an inspection report are expected to be corrected in a timely manner. Those facilities that comply would be considered for waiver to the requirements. There would be no additional economic impact on a facility than that which is already present for all facilities that wish to participate in the program. All are required to comply with the minimum standards regardless of the cost. Proposed change to 18.00 C. 2. b. 1. Benefits to the animals when a solid surface is provided for resting and standing include decreased opportunity for injury to feet or legs, and the ability to use the paws and pads in a normal weight bearing manner. The reason for the recommendation includes the benefit to the animal as well as the industry’s wish to maintain a high standard. 3. What, in your estimation, would be the consequence of taking no action, thereby maintaining the status quo? Proposed change to 12.00 B. 1. B. All surfaces within the pet animal enclosure require cleaning and sanitation as often as necessary to reduce disease hazards and odors and maintain sanitary conditions. Open mesh cage floors do allow waste material to fall away from the animal contact surface and thus in some cases reduce the frequency of cleaning necessary. Continued use of wire or mesh flooring leaves in place the possibility of injury to feet or legs and the maintenance required to clean or replace soiled and rusty wire. Proposed change to 12.00 B. 1. d. 1. This would and has resulted in misunderstandings and lack of clarity in the language causing facility owners to be out of compliance and require additional time to meet with inspectors and administrators to interpret the rule as written. The goal of the change is to make it clear to facility owners that an indoor building needs to have provisions for heating and cooling to protect the health of the animals. Proposed change to 12.00 B. 1. d. 5. Failure to amend the rule would remove all benefit to the animals and the facility owner who may then suffer the effects of infectious disease moving through an entire kennel and costing fees for veterinary care and staff time to provide treatments to sick animals. The current rule with no provision for isolation of ill animals fails to protect all the animals residing in a facility from the possibility of infection. Proposed change to 12.00 B. 1. e. 1. The alternative to this amendment would be leaving language as is which would then require clarification to new and existing facility owners causing staff to lose time and in some instances additional cost to facility owners who do not understand the requirement as written. Proposed change to 12.00 B. 1. f. 2. Leaving the regulation unchanged would take away all benefit to the animals of increased living space as well as cause some facilities to incur the cost of custom made products to build their enclosures. Proposed change to 18.00 C. 2. f. (3) Leaving this rule unchanged will allow shelters to house cats in enclosures of no more than 7 square feet for the life of the cat. There are no other provisions to provide exercise or time outside of the enclosure for cats and thus they are not given any additional space in which to live. Proposed change to 12.00 B. 1. f. 3. and 4. The alternative to leave the rule as it is will eliminate construction and labor costs to the facilities but will fail to protect those very young and newborn animals to the best extent possible. Proposed change to 12.00 C. 2. i. The alternative of allowing adult dogs to be housed for a lifetime within a kennel with no permanent identification will result in a decreased ability to enforce the care and handling requirements in the rule since no individual can be positively identified. Proposed change to 12.00 B. 1. c. 2. Alternatives to these requirements would be to leave the regulation as is, thus allowing licensees to apply for waivers to the minimum standards of housing and use tethers for any number of animals. Without training plans and documentation the inspectors are unable to determine which dogs at a facility are being used and which are simply being housed in the same manner as convenience, limiting our ability to enforce the current regulation. Proposed change to 18.00 C. 2. b. 1. The first alternative would be to leave the requirement as is and allow wire or mesh flooring in animal shelter facilities. This would result in no additional cost or changes to existing facilities. As stated above there would be no benefit gained for the animals residing in the facilities. 4. Please describe market-based alternatives or voluntary standards that you considered in place of the proposed regulation and state the reason(s) for not selecting those alternatives. How many small businesses did you talk to about the proposed regulation? The PACFA statute and rules were developed and approved by groups of industry representatives who gathered and wrote this set of minimum standards. The consideration of voluntary standards in this situation would be to consider no change in the regulation at this time. The reasons for choosing to alter the current standards are to benefit the health and welfare of animals, correcting or clarifying existing language, and changes in industry standards or practices that need to be reflected in the rule. Individuals and small business owners or operators involved in the discussions surrounding these proposed changes numbered 10 to 25 at any one of 5 meetings held by the department. Impact of Proposed Rule(s)/Amendment(s) 5. Please describe the government costs to be incurred because of the proposed regulation (Examples include collection; paperwork; filing; recordkeeping; audit, inspection and training costs, etc.), and state your estimates (in dollars) of the costs that will be incurred. Government costs will be minimal since this industry is currently being regulated and the bulk of the proposed amendments can be handled in the normal course of regulation. The purpose of several of the changes is to clarify language to assist the regulatory process and make the rules easier to understand and eliminate questions. There will be no additional costs to the program because of the proposed regulation. 6. Please provide the number and types of entities or small businesses that will be required to comply with the proposed rule(s). Please provide the source of data used (i.e., program data, NAICS code statistics, etc.). The program licenses more than 1800 facilities that breed, sell, adopt, board, train, or groom pet animals each year. The types of facilities licensed and inspected range from non-profit animal shelters and rescues to retail pet shops and commercial dog breeders. This proposed rule change and the amendments would affect facilities in the Animal Shelter and Dog Breeder category which represents approximately 20% of the total licensees. This information available from the program database. 7. Does the proposed regulation create barriers to entry (i.e., licensing, permit or educational requirements)? If so, please describe those barriers and why those barriers are necessary. The proposed regulation does not create barriers to entry into the program that were not already established as rule. All those wishing to become licensed must submit a complete application, pay the appropriate fees, and comply with the minimum standards set forth for their industry. 8. Explain the additional requirements with which small business owners will have to comply (i.e., will they need to purchase new equipment or software to meet the requirement(s); are there training costs; are there new disclosure/filing requirements they will have to provide to the state; are there transactional costs, paperwork costs, recordkeeping, etc.). Please state your estimates (in dollars) of the compliance costs by types listed. Proposed change to 12.00 B. 1. B. Replacing bare wire with coated wire will represent a cost to the business owner, and in the larger kennels this may be significant. Costs for materials will be variable depending on the size and quality of the product and may start at $2.00/ square foot and go up from there. The average size kennel required to comply is 5070 dogs, as determined anecdotally. This size facility could represent anywhere from 70 enclosures, one for each dog, to 14 enclosures that hold 5 dogs each. At $2.00 per square foot and a minimum of 4 square feet that would need to be replaced a cost of $8.00 per cage for material would be realized not including the labor costs involved. Proposed change to 12.00 B. 1. d. 1. The proposal should represent no additional costs over and above what a facility owner is already required to provide which is sufficient heating or cooling to protect animals from cold or heat to provide for their health. Proposed change to 12.00 B. 1. d. 5. The cost to establish an isolation area should be minimal since the facility already has the capacity to house its residents, therefore the facility exists and the only requirement would be that the area be used when dogs are ill with contagious or infectious disease. Proposed change to 12.00 B. 1. e. 1. Facilities are currently being required to provide shade cover separate from the shelter structure so no additional costs to the owner should be incurred. A shade cover can be achieved by simply placing a piece of plywood over a corner of the cage of adequate size to accommodate all the dogs in the enclosure. Proposed change to 12.00 B. 1. f. 2. The cost to add 2 to 4 square feet to enclosures could range up to $10/sq ft depending on the material used. As above the average size facility houses 50-70 dogs in anywhere from 14 to 70 enclosures which represents $20-$40 in additional material per enclosure at maximum for materials. Labor costs would be variable depending on the type of material and configuration of the kennel. Proposed change to 18.00 C. 2. f. (3) Replacing cages will cost anywhere from $300 for a single manufactured cage to $3000 for a bank of several manufactured cages, but less expensive alternatives do exist. This amendment is proposed by the industry that will be affected by the change and is seen as being in the best interest of the animals. Proposed change to 12.00 B. 1. f. 3. and 4. Costs to comply with a solid surface in whelping and nursery cages could be $2.00 per cage for a simple plastic box or pan. The vast majority of enclosures that would need to be modified are built to house small breed dogs and as such compliance could involve simple materials and little labor. Proposed change to 12.00 C. 2. i. Cost could be from 25 cents to $20 per animal and kennel sizes range from approximately 5 adult dogs to more than 200. An average kennel size of 50-70 dogs could comply with this requirement for less than $100 if simple collars and tags are used. Many alternatives are allowed and the facility owner can request additional variations to the requirement. Proposed change to 12.00 B. 1. c. 2. The current regulation has a requirement for a maintenance record to be kept for each permanent resident of a kennel, such record includes a description of the animal, veterinary care and illness and injury information. The addition of an exercise log can be incorporated here with a small amount of additional time required. The written plan could require 4-6 hours of preparation and may include some cost to have a veterinary review performed, but once completed would only need to be updated when the training and conditioning situation changed. Proposed change to 18.00 C. 2. b. 1. There are very few facilities operating as an animal shelter that employ this type of flooring but the cost to replace cage banks or other enclosure systems completely will have a high cost. As above a shelter that houses 50-70 dogs might represent an average size. Replacement of wire flooring with solid flooring could range from $2.00/sq foot and up depending on the material chosen. Labor costs would represent a significant part of the overall cost to retrofit the enclosures. The economic impact may be magnified by the fact that many of these facilities are non-profit and must rely on donations to make changes to the facility. 9. Please state whether the proposed regulation contains different requirements for different sized entities or different geographic regions, and explain why this is, or is not, necessary. (For example, an audit fee (as a percentage of assets) for a bank examination is lower based upon a higher level of assets due to marginal cost savings and water usage is more restricted in geographic regions with less water storage or supplies because demand far outpaces supply.) The proposed regulation does not contain different requirements for different sized entities. This regulation represents a minimum standard of care for animals residing in facilities and as such should not be dependent on facility size. 10. Please describe your understanding of the ability of small business owners to implement changes required by the proposed regulation, and state the average estimated cost of implementation. (For example, if a proposed rule required all business in a particular sector to utilize a specific software application, a small business owner may have a difficult time implementing the software if the software is expensive to purchase or if their existing computers are not able to run the software.) The majority of the proposed regulations should not pose undue hardship on the facility owner to implement. Certainly when non-profit organizations are required to make capital improvements there may not be an ability to comply due to lack of funds. Costs to implement some of the changes have been estimated to the best of our ability in question 8 above. Individual differences in facilities will lead to great variability in the methods and manner in which they are able to comply. The costs of material have enough variability that there should be some level that will meet the requirement and be possible for the facility owner to use. 11. Please state if the proposed regulation will force the cessation of business by any existing businesses, and the impact the cessation will have on the economy including but not limited to the number of employees losing their jobs, the economic losses by the businesses and the estimated economic ripple the cessation will have on suppliers, consumers or buyers. There is anecdotal information that indicates some facilities currently licensed may have difficulty complying with the proposed regulation. There is no way to know whether this will occur given the time line for compliance may vary from facility to facility. In those areas where facilities need to make significant capital improvements they may make a decision to close. In our experience these facilities may operate with no paid employees to up to 4 or 5. If facilities close then jobs could be lost in a worst-case situation. Closed facilities will have an effect on feed suppliers, and other industries that support these businesses such as veterinarians. 12. Does the proposed regulation restrict consumer choice (i.e., availability of goods or services; price increases; etc.)? If so, please describe those restrictions. The proposed regulatory changes reflect changing consumer demand for increased standards of animal care and welfare, requests from the industry to modify operating procedures, and the need to clarify the requirements to facilitate compliance. Consumer choice should not be restricted by any of the proposed changes, and in many ways, facilities that comply with the increased standards will be more competitive in the market. 13. Please state the estimated impact (in dollars) the proposed regulation will have on sales, employment or tax revenue. There is no information available regarding the impact of these changes on sales, employment or tax revenue. 14. Please identify all other small business sector(s) that the proposed regulation(s) may impact, and state the estimated financial impact the proposed regulation will have on each small business sector. There is no information regarding the impact on other small businesses of these proposed regulations. Thank you for your time and effort.