As noted previously, a DMP allows the introduction of breeder deer into a DMP facility for purposes of propagation. Except for fawns born in a DMP facility during the permit year, no DMP facility may contain more than 1 buck deer and 20 doe deer. Also, deer may be introduced to DMP facility beginning on September 1 and no later than the breeding chronology for the ecoregion in which the DMP facility is located, which ranges from October 21 (Gulf Prairies and Marshes) to December 14 (South Texas Plains). A person seeking to engage in DMP activities, must obtain a new DMP permit each year. Deer held in a DMP facility must be allowed to leave the DMP facility by no later than 45 days prior to the trapping deadline of the subsequent DMP trapping season for the ecoregion in which the DMP facility is located, which ranges from September 6 (Gulf Prairies and Marshes) to October 30 (South Texas Plains), or a date specified in the permit.

Upon conclusion of DMP activities, a buck introduced into the DMP pen from a deer breeding facility may be returned to the originating deer breeding facility, moved to another deer breeding facility, or released. All other deer held in the DMP facility must be released to the adjoining high-fenced acreage.

The proposed new rule imposes no new testing requirements in addition to those imposed on deer breeding facilities and release sites by §§65.90 - 65.93 of this subchapter. While there are no testing requirements directly imposed on DMP permittees during the temporary detention of deer pursuant to a DMP permit, the release of breeder deer obtained from a TC 2 or TC 3 deer breeding facility or deer from a Class II release site (via Triple T permit) could result in additional testing requirements for the DMP acreage (the high-fenced acreage in which the DMP facility is located) to which the DMP deer are released. There also could be testing requirements for a deer breeder who acquires or re-acquires a breeder buck from a DMP facility of lower status than the receiving deer breeding facility since the receiving facility assumes the status, if lower, of the originating facility. There would be no additional testing requirements as a result of DMP activities if the DMP facility receives no breeder deer and no deer via Triple T permit from a Class II release site, or if the DMP facility only receives breeder deer and deer via Triple T permit from deer breeding facilities and release sites that have a status that is equal to or higher than the DMP facility. However, if a release site or deer breeding facility receives deer from a DMP facility that has lower status than the receiving deer breeding facility or release site, the deer breeding facility or release site could incur additional costs associated with CWD testing.

With regard to testing, if a release site becomes a Class II release site as a result of the introduction of deer onto the release site following DMP activities, under the provisions of §65.90 - 65.93 of this subchapter the following number of deer would have to be tested for CWD in the following year: 50 percent of the number of breeder deer released at the site between the last day of lawful deer hunting at the site in the previous year and the last day of lawful deer hunting at the site in the current year, or 50 percent of all hunter-harvested deer, as well as 50 percent of any hunter-harvested deer that were released breeder deer, which may be counted to satisfy the total testing requirement.

If a release site becomes a Class III release site as a result of the introduction of deer onto the release site following DMP activities, under the provisions of §65.90 - 65.93 of this subchapter the following number of deer would have to be tested for CWD in the following year: 100 percent of all hunter-harvested deer or one hunter-harvested deer per breeder deer released between the last day of lawful deer hunting at the site in the previous year and the last day of lawful deer hunting. The exact number of deer that must be tested at Class II and Class III release sites would depend on the number of hunter-harvested deer and the number of breeder deer released on the property.

The estimated cost for each test and the cost of compliance for deer breeders is as specified in the discussion of the proposed rule's impact on small and micro-business later in this preamble.

There could be adverse economic impact on small businesses and microbusinesses required to comply with the rule as proposed.

Under the provisions of Government Code, Chapter 2006, a state agency must prepare an economic impact statement and a regulatory flexibility analysis for a rule that may have an adverse economic effect on small businesses and micro-businesses. As required by Government Code, §2006.002(g), in April 2008, the Office of the Attorney General issued guidelines to assist state agencies in determining a proposed rule's potential adverse economic impact on small businesses. These guidelines state that "[g]enerally, there is no need to examine the indirect effects of a proposed rule on entities outside of an agency's regulatory jurisdiction." The guidelines state that an agency need only consider a proposed rule's "direct adverse economic impacts" to small businesses and micro-businesses to determine if any further analysis is required. The guidelines also list examples of the types of costs that may result in a "direct economic impact." Such costs may include costs associated with additional recordkeeping or reporting requirements; new taxes or fees; lost sales or profits; changes in market competition; or the need to purchase or modify equipment or services.

Although many DMP permittees engage in the for-profit sale of the opportunity to hunt deer that have been held under a DMP and subsequently liberated, Parks and Wildlife Code, §62.021, prohibits the sale, offer for sale, purchase, offer to purchase, or possession after purchase of a live game animal, but makes an exception for activities conducted under a deer breeder permit which allows the purchase and sale of deer. Therefore, the department has determined that the since activities pursuant to a DMP permit are statutorily not for profit, the proposed rulemaking does not impose any adverse economic impacts from the perspective of any DMP permittee's status as a for-profit enterprise, be it a small business or microbusiness or not.

Parks and Wildlife Code, §43.357(a), authorizes a person to whom a breeder permit has been issued to "engage in the business of breeding breeder deer in the immediate locality for which the permit was issued" and to "sell, transfer to another person, or hold in captivity live breeder deer for the purpose of propagation." As a result, deer breeders are authorized to engage in business activities; namely, the purchase and sale of breeder deer.

Since the rule as proposed could impact the ability of a deer breeder to engage in certain activities undertaken to generate a profit, the proposed rule may have an adverse impact on deer breeders. However, those impacts would result from a deer breeder's receipt of deer from a DMP facility of lower status than the breeder facility. It should be emphasized that it is unlikely that a deer breeder would seek to introduce a deer of lower status into a deer breeding facility.

It should also be noted that the variety of business models utilized by deer breeders makes meaningful estimates of potential adverse economic impacts difficult. Although a deer breeder has the permit privilege to buy and sell breeder deer and many deer breeders participate in a market for breeder deer, other deer breeders are interested only in breeding and liberating deer on their own property for hunting opportunity. Once a breeder deer is liberated, it cannot be returned to a breeding facility and assumes the same status as all other free ranging deer. Thus, if the deer breeder is engaged primarily in buying and selling deer, the potential adverse economic impact is greater than that for a deer breeder who engages in deer breeding activities primarily for purposes of release onto that person's property. The department does not require deer breeders to report the buying or selling prices of deer. However, publicly available and anecdotal information indicates that sale prices, especially for buck deer, may be significant. The sale price for a single deer may range from hundreds of dollars to many thousands of dollars.

It should also be noted that some aspects of this analysis are based on anticipated marketplace behavior which cannot be accurately predicted. In addition, to the extent that any marketplace analysis can be conducted, it is difficult, if not impossible, to accurately separate and distinguish marketplace behavior that is the result of the proposed rules from marketplace behavior that is the result of the discovery of CWD. For reasons unrelated to the regulations, it is possible, perhaps even likely, that breeders and release site owners would be reluctant to acquire a breeder deer from a facility with a close relationship (as indicated by the facility's status) to a facility at which CWD has been detected.

For deer breeders, the department has determined that for TC 1 facilities there will likely be no adverse economic impact on sales as a result of the proposed new rule, so long as the TC 1 facility does not receive a breeder buck deer from a DMP facility of a lower status. Under §§65.90 - 65.93 of this subchapter, only those breeding facilities that are not Tier I facilities and have obtained a "fifth-year" or "certified" status from TAHC, are considered TC 1 facilities. In order to maintain "fifth year" or "certified" from TAHC, such facilities may receive deer only from other "fifth-year" or "certified" breeding facilities. As a result, transfers of breeder deer from TC 1 facilities are subject to the fewest restrictions under §§65.90-65.93 of this subchapter. Therefore, breeder deer from a TC 1 facility can more easily be sold to other breeders or to landowners for purposes of liberation on a release site. In addition, TC 1 facilities are already subject to monitoring and testing at a higher level. Department records indicate that there are currently 63 TC 1 facilities in the state.

If a TC 1 deer breeding facility becomes a TC 2 facility as a result of receipt of a breeder buck deer from a DMP facility, the adverse economic impact of the proposed new rule would consist of the cost of the additional testing requirements (described in more detail later in this preamble) and possible loss of sales to TC 1 facilities and Class I release sites. The change in status would not prohibit the transfer of breeder deer by an affected facility, but because of the change (lowering) in status resulting from the proposed new rules, it can be assumed that TC 1 facilities will be less likely destinations for breeder deer coming from DMP facilities of lower status.

Department records indicate that there are currently 759 TC 2 facilities in the state, and that in the last year, 528 of them transferred breeder deer to facilities that are now TC 1 or Class I release sites. The most breeder deer transferred from any single breeding facility was 175, but the overwhelming majority of transfers involved 10 or fewer deer. If a TC 1 deer breeding facility's status is lowered to TC 2 as a result of the receipt of a breeder buck deer from a Level II DMP facility, the impact to the deer breeder could include the loss of sales and any attendant profit from the sale of deer due to the deer breeder's lower status. However, as noted above, a TC 1 facility is not a likely destination for a deer from a DMP facility of lower status.

For facilities that become TC 3 facilities as a result of acquiring breeder deer from a Level 3 DMP facility, the adverse economic impact of the proposed new rules would consist of the cost of the additional testing requirements and possible loss of sales to TC 1 and TC 2 facilities and Class I and Class II release sites. Because the proposed new rule would cause any deer breeding facility that accepts deer from a DMP facility of lower status to assume the status (and regulatory obligations, such as testing) of that originating facility, it can be assumed that higher status facilities and release sites will be less likely destinations for breeder deer coming from facilities of lower status.

Because the issuance period for DMPs had not concluded as of the submission of the proposed new rule, the department cannot provide a definitive value for the number of DMPs issued for the 2015-2016 permit year; however, in the 2014-2015 permit year, 168 DMPs were issued and the final value for the current year is expected to be similar. Of the permits issued thus far for this year, 111 did not involve breeder deer. Four DMP facilities have received breeder deer only from a TC 1 deer breeding facility. Forty-three DMP facilities have received breeder deer from a TC 2 deer breeding facility. One DMP facility has received deer from a TC 3 breeding facility.

With regard to the degree of impact due to possible loss of sales, the department does not require holders of deer breeder permits to disclose the dollar values of sales and purchases of breeder deer; therefore, an exact quantification of the possible impact of the proposed new rule on deer breeding facilities due to lost sales cannot be calculated. However, based on public and anecdotal information, such impact could be from few hundred dollars or less per deer or to thousands of dollars per deer.

Testing Costs

In all cases, the costs to persons required to comply, as well as to any small or microbusiness affected by the proposed new rule, would consist of the cost of CWD testing. The cost of a CWD test administered by the Texas Veterinary Medicine Diagnostic Lab (TVMDL) on a sample collected and submitted by a DMP permittee is a minimum of $46, to which is added a $6 submission fee (which may cover multiple samples submitted at the same time). If a whole head is submitted to TVDML there is an additional $20 sample collection fee, plus a $20 disposal fee. Thus, the fee for submitting an obex or obex/medial retropharyngeal lymph node pair would be $52, plus any veterinary cost (which the department cannot quantify) and the fee for submitting an entire head for testing would be $92. Therefore, the department estimates that the direct economic impact of the proposed new rule on persons required to comply would be between $52 and $92 per deer per year for each permittee. If the sample is collected, fixed, and submitted by a private veterinarian, the cost could be higher. The cost to any person, small business or microbusiness would be the cost of a CWD test multiplied by the number of deer required to be tested.

Alternatives Considered

The department considered several alternatives to achieve the goals of the proposed new rule while reducing potential adverse impacts on small and micro-businesses and persons required to comply. The department considered proposing no rule. This alternative was rejected because the presence of CWD in the state is not hypothetical, but has been confirmed and presents an actual, direct threat to free-ranging and farmed cervid populations and the economies that depend upon them. A regulation that clearly sets out prudent and sensible restrictions on the regulated community is more likely to achieve the desired result of stemming the spread of CWD than having no regulations. The department concluded that the need to protect the wildlife resources that sustain the state's annual multi-billion-dollar hunting industry outweighs the temporary adverse impacts to small and micro-businesses and persons required to comply.

The department also considered, in lieu of a regulatory response, the alternative of prohibiting the transfer of breeder deer to DMP facilities except from TC 1 facilities. This alternative was rejected because it would result in disruption of the bulk of interactions between deer breeders and DMP holders, which, with proper monitoring, would not be unnecessary.

The department has not drafted a local employment impact statement under the Administrative Procedure Act, §2001.022, as the agency has determined that the rules as proposed will not result in direct impacts to local economies.

The department has determined that there will not be a taking of private real property, as defined by Government Code, Chapter 2007, as a result of the proposed new rules. Any impacts resulting from the discovery of CWD in or near private real property would be the result of the discovery of CWD and not the proposed rules.

Comments on the proposed rule may be submitted to Mitch Lockwood, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas 78744; (830) 792-9677 (e-mail: mitch.lockwood@tpwd.texas.gov); or via the department's website at www.tpwd.texas.gov.

The new rule is proposed under the authority of Parks and Wildlife Code, Chapter 43, Subchapter R, which authorizes the commission to establish the conditions of a deer management permit, including the number, type, and length of time that white-tailed deer may be temporarily detained in an enclosure, and Subchapter R-1, which authorizes the commission to establish the conditions of a deer management permit, including the number, type, and length of time that mule deer may be temporarily detained in an enclosure (although the department has not yet established a DMP program for mule deer authorized by Subchapter R-1), and §61.021, which provides that no person may possess a game animal at any time or in any place except as permitted under a proclamation of the commission.

The proposed new rule affects Parks and Wildlife Code, Chapter 43, Subchapters C, R and R-1, and Chapter 61.