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improvements to the land.7 In addition, petitioners spent
$261,348 on equipment used to maintain the property.
The USDA conducted two annual inspections of ERE’s
facilities. The USDA requires that exotic animal breeding
facilities be constructed and maintained according to USDA
regulations.8 To comply with USDA’s requirements, petitioners
incurred large expenses installing infrastructure on the
property. For example, petitioners constructed metal and
concrete buildings, maintained heat inside the buildings, and
built walkways throughout the property. During the years at
issue, ERE was in compliance with or received variances from all
USDA requirements.9
In 2000, petitioners started building a home on the
property. Petitioners decided to live on the property because
Mrs. Knudsen often drove to the property alone at night to feed
the animals, and petitioners wanted to keep better watch over
7The improvements to the land consisted of $1,119,478 for
buildings and $412,774 for landscaping.
8The USDA regulates the following: Housing, ventilation,
lighting, interior surfaces, primary enclosures, sanitation, pest
control, feeding and watering, outdoor shelter, compatibility of
animals housed together, record keeping, adequate veterinary
care, handling, and transportation.
9In 2001, the USDA informed petitioners that they were not
in compliance with a new USDA regulation. The new regulation
required an 8-foot perimeter fence for potentially dangerous
animals. Mrs. Knudsen applied for a variance from the new
regulation, and the USDA granted Mrs. Knudsen’s request because
the existing structures were sufficient.
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Last modified: March 27, 2008