### United States Department of Agriculture Animal and Plant Health Inspection Service May 2012 Regulatory Impact Analysis and Final Regulatory Fl exibility Analysis

Final Rule APHIS 2009-0018 RIN 0579-AD11 Lacey Act Implementation, Definitions for Exempt and Regulated Articles

Policy & Program Development Policy Analysis & Developmenti 

### Summary
Recent amendments to the Lacey Act expanded it s protections to a broader range of plant species, extended its reach to en compass products, including timber, that derive from illegally harvested plants, and require that importers s ubmit a declaration at the time of importation for plants and plant products. Co mmon cultivars and common food cr ops are among the categorical exclusions to the provisions of the Act. The Act does not define the terms “common cultivar” or “common food crop,” but instead gives authority to the U.S. Department of Agriculture and the U.S. Department of the Interior to define th ese terms by regulation. This rule provides these definitions. “Common cultivar” and “common food crop” are defined in this rule to ensure that the exclusions do not place at risk pl ants of conservation concern. Th e definitions are also consistent with the terms’ existing and commonly understood definitions. Since the terms have not previously been defined, there should be no instances in which an importer will be required because of this rule to make declarations for commodities that are not now being declared. In other words, the definitions presented in this ru le and the related exclusions will not result in additional costs for importers based on their curre nt activities. On the other hand, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service has estimated that about 5 percent of declarations being made under the current stage of phased-in enforcement of the declaration requirement of the Act are eith er for common cultivar s or common food crops that will be excluded under the definitions in this rule. The costs incurred in making these declarations are a measure of the expected benefits of the rule. We estimate the total annual cost savings associated with these declarations alone will be between $1 million and $3 million. Implementation of the declaration requirement for all plants, includi ng common food crops andii common cultivars, will cover far more product ca tegories than those that currently require a declaration.
To the extent that the rule defines which pr oducts are excluded from the provisions of the Act, it will benefit U.S. importers, large and sm all. By defining the terms “common cultivar” and “common food crop,” the rule will facilitate importer understanding of and compliance with the Act’s requirements.iii 

### Table of Contents Summary ....................................................................................................................... ....... i Introduction .................................................................................................................. ....... 1 Overview of the Action and affected Entities ..................................................................... 2 Expected Benefits and Costs of the Rule ............................................................................ 3 Final Regulatory Flexibility Analysis ................................................................................. 5 Need for and Objectives of the Rule ............................................................................... 6 Significant Issues raised by Public Commen t in response to the Initial Regulatory Flexibility Analysis ........................................................................................................ 6 Comments filed by the Small Business Admi nistration in response to the Proposed Rule .......................................................................................................................... ...... 7 Potentially Affected Small Entities ................................................................................. 7 Projected Reporting, Recordkeeping, a nd Other Compliance Requirements ................. 9 Steps taken by APHIS to minimize Signifi cant Economic Impacts on Small Entities 101 

### Introduction
The Lacey Act, as amended, makes it unlawful to import, export, transport, sell, receive, acquire, or purchase in intersta te or foreign commerce any plant, with some limited exceptions, taken in violation of any Federal, State, tribal, or foreign law that protect s plants. The Lacey Act also requires import decl arations for plants and plant products and makes it unlawful to make or submit any false record, account, or label for, or any false identification of, any plant covered by the Act. 1 Common cultivars and common food crops are among the categorical exclusions to the provisions of the Act, but are no t defined within the Act. The Department of Agriculture’s Animal a nd Plant Health Inspect ion Service (APHIS) and the Department of the Interior’s Fish and W ildlife Service are establishing definitions for the terms “common cultivar” and “common food crop.” 2 These definitions will specify which plants and plant products are subj ect to the provisions of the Act, including the declaration requirement.

1 The declaration must contain, among other things, the scientific name of the plant, value of the importation, quantity of the plant, and name of the country where the plant was harvested. For paper and paperboard products containing recycled cont ent, the declaration also must include the average percent of r ecycled content without regard for species or country of harvest.
2 The definitions are as follows: Common cultivar. A plant (except a tree) that: (a) Has been developed through artificial selection for spec ific morphological or physio logical characteristics; and (b) Is a species or hybrid, or a selection thereof, that is produced on a commercial scale; and(c) Is not listed: (1) In an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (27 UST 1087; TIAS 8249); (2) As an endangered or threatened species under the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); or (3) Pursuant to any State la w that provides for the cons ervation of species that are indigenous to the State and ar e threatened with extinction.. Common food crop. A plant that: (a) Is raised, grown, or cultivated for human or animal consumption; and (b) Is a species or hybrid, or a selection thereof, that is produced on a commercial scale; and (c) Is not listed: (1) In an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (27 UST 1087; TIAS 8249); (2) As an endangered or threatened species under the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); or (3) Pursuant to any State law that provides for the conserva tion of species that are indi genous to the State and are threatened with extinction.2 This economic analysis provides a cost-benef it analysis, as required by Executive Orders 12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulator y approaches that maximize net benefits (including potential economic, environmen tal, public health and safety effects, and equity). Executive Order 13563 emphasizes th e importance of quantifying both costs and benefits, of reducing costs, of harmonizing rule s, and of promoting fl exibility. The economic analysis also examines the potential economic effe cts of this rule on small entities, as required by the Regulatory Flexibility Act. 

### Overview of the Action and affected Entities
Recent amendments to the Lacey Act expanded it s protections to a broader range of plant species, extended its reach to en compass products, including timber, that derive from illegally harvested plants, and require that importers s ubmit a declaration at the time of importation for plants and plant products. Co mmon cultivars and common food cr ops are among the categorical exclusions to the provisions of the Act. The Act does not define the terms “common cultivar” or “common food crop,” but instead gives authority to the U.S. Department of Agriculture and the U.S. Department of the Interior to define th ese terms by regulation. This rule provides these definitions. Plants and plant products are imported into this country for commercial purposes, for research, for education, and by hobbyists and collect ors, and are covered under the Act. In addition, many less obvious products, such as pha rmaceuticals, contain plant products and are also covered under the Act. Without the exclusions for common food crops and common cultivars, commodities such as fruits, vegetables , nursery stock, and cotton clothing would all be covered under the Act. Therefore, the importers potentially affected by the rule represent a3 broad cross-section of U.S. businesses, govern ment and university research institutions, nonprofit operations, and individuals. 

### Expected Benefits and Costs of the Rule
The recent amendments to the Act impose th e declaration requirement on imports of plants and plant products and cr eate three categories of plants that are excluded from the provisions of the Act: (1) Common cultivars, except trees, and common food crops (including roots, seeds, parts, or produc ts thereof); (2) Scientific specimens of plant genetic material (including roots, seeds, germplasm, parts, or pr oducts thereof) that ar e to be used only for laboratory or field research; and (3) Plants that are to remain planted or to be planted or replanted. 3 Since the declaration requirement and the ex clusions were established directly in the 2008 Farm Bill, their existence, per se , is not a matter for consideration in the rule or in this analysis. 4 Our analysis is of the e xpected benefits and costs of the definitions of “common cultivar” and “common food cr op” in this rule. To the extent that the rule defines which pr oducts are excluded from the provisions of the Act, it will benefit U.S. importers. By defi ning “common cultivar” and “common food crop,” the rule will facilitate importe r understanding of and compliance w ith the Act’s requirements. Enforcement of the declaration requirements is being phased in utilizing categories from the Harmonized Tariff Schedule of the United Stat es (HTS). The phase-in schedule is largely based on the degree of processing and complexity of composition of the affected products. The

3 Exclusions 2 and 3 do not apply if the plant is listed: in an appendix to the Convention on International Trade in Endangered Species of Wild Fauna an d Flora (CITES); or as an endanger ed or threatened species under the Endangered Species Act of 1973; or pursuant to any State law that provides for the cons ervation of species that are indigenous to the State and ar e threatened with extinction. 4 The public comments received in response to APHIS’ published notices of Oct ober 8, 2008 and February 3, 2009 in Docket No. 2008-0119 contain little in the way of substantive data on the cost of complying with the declaration requirement. However, those comments indicate that, for some importers, the requirement could be burdensome.4 declaration requirements for products in part s of HTS Chapters 44, 66, 82, 92, 93, 94, 95 and 97, are the only requirements currently being enforced. 5 Therefore, some products that are not exempted under the Act can currently enter th e United States without a declaration. Importers of a small number of products that will be excluded based on the definitions in this rule may currently be filing declarations upon entry of their pr oducts into the United States. Importers of those products will benefit from this rule. Under the current stage of en forcement of the Lacey Act, 10,000 declarations per week are filed on average. It is estimated that about 5 percent of these decl arations are filed for commodities that are either common cultivars or common food crops under the definitions in this rule. The cost incurred in making these declarations is one measur e of the expected benefits of the rule. The costs to those filing these declarati ons include the labor cost to collect and maintain the necessary data and to complete and review the paperwork, the cost of postage for paper declaration submissions, and the cost of the fees charged by for electronic declaration submissions. In addition, there are government costs for processing those declarations. We estimate the total annual cost savings will be between $1 million and $3 million. These estimated cost savings are based on 26,000 6 annual declarations that would not need to be filed, 1.5 hours of management time per declaration for da ta collection, completion and review of each

5 Enforcement of the declaration requirement began on April 1, 2009, for goods in 4401-fuel wood; 4403-wood in the rough; 4404-hoopwood; poles, piles, stakes; 4406-railway or tramway sleepers; 4407 wood sawn or chipped lengthwise; 4408 sheets for veneering; 4409-wood continuously shaped; 4417-tools, tool handles, broom handles; and 4418-builders’ joinery and carpentry of wood. Enforcement began on Oct. 1, 2009, for 4402-wood charcoal; 4412 plywood, veneered panels except 44129906 and 44129957; 4414-wooden frames; 4419-tableware & kitchenware of wood; and 4420 wood marquetry, caskets, statuettes. Enforcement began on April 1, 2010, for 4421- other articles of wood; 6602 walking sticks, whips, crops; 8201-hand tools; 9201-pianos; 9202-other stringed instruments; 9302-revolvers and pist ols; 93051020-parts and accessories for revolvers and pistols; 940169-seats with wood frames; 950420-articles and accesso ries for billiards; and 9703-sculptures. 6 Five percent of 10,000 total declarations per week over an entire year.5 declaration, 7 postage costs of $0.45 per paper declara tion, broker fees of between $10 and $30 per electronic declaration, 8 and hourly salary and benefits co sts associated with the government processing of the declarations. 9 Implementation of the declaration requir ement for all plants, including common food crops and common cultivars, would cover far more product categories than those that currently require a declaration. Since the terms “common cultivar” and “co mmon food crop,” while not yet defined by regulation, were previously incl uded in the statute, there shoul d be no instances in which an importer will be required because of this rule to make declarations for commodities that are not now being declared. In other words, the defini tions presented in this rule and the related exclusions should not result in a dditional costs for importers based on their current activities. 

### Final Regulatory Fl exibility Analysis
The Regulatory Flexibility Act requires agencies to evaluate the poten tial effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. This final regulatory flexibility anal ysis describes expected impacts of this rule on small entities, as required by section 604 of the Act.

7 The cost of this management time is based on the range in median hourly compensation for various management occupations, not including chief executives, of between $21.07 and $58.75. Bureau of Labor Statistics, May 2011 National Occupational Employment and Wage Estimates. 8 Based on various industry sources for brokerage service fees. 9 Based on GS-4 step 1 salary and benefits. It takes an average of 12 minutes to ente r a declaration received through the mail into the database and check for errors. It takes about 5 minutes to merge the approximately 8000 weekly electronic declarations into the database. This does not include any analysis or compliance checks that would occur at a higher grade.6 Need for and Objectives of the Rule Recent amendments to the Lacey Act expanded it s protections to a broader range of plant species, extended its reach to en compass products, including timber, that derive from illegally harvested plants, and require that importers s ubmit a declaration at the time of importation for plants and plant products. Co mmon cultivars and common food cr ops are among the categorical exclusions to the provisions of the Act. Th e Act does not define the terms “common cultivar” and “common food crop” but instead gives authority to the U.S. Department of Agriculture (USDA) and the U.S. Department of the Interior (DOI) to define these terms by regulation. This rule is intended to provide these definitions. The definitions are designed to ensure that the exclusions do not place at risk plants of conservation concern, while excluding plants th at are grown on a commercial scale. The definition for “common cultivar” is consistent wi th the definition of “cultivar” contained in the CITES regulations promulgated by the DOI’s Fish and Wildlife Service, with additional phrasing added in order to limit the definitions to “co mmon” exemplars. The definition for “common food crop” was developed with consideration of common dictionary definitions and terms in commercial use. In both definitions, the exceptio ns for endangered and threatened species are consistent with the provisions of the Act. Significant Issues raised by Public Comment in response to the Initial Regulatory Flexi bility Analysis No significant issues were raised concerni ng the Initial Regulatory Flexibility Analysis during the public comment pe riod for the proposed rule.7 Comments filed by the Small Business Administration in response to the Proposed Rule There were no comments filed by the Small Business Administration in response to the proposed rule. Potentially Affected Small Entities The Small Business Administration (SBA) has established guidelines for determining which entities are to be considered small. Plan ts and plant products, such as fruits, vegetables, and nursery stock are imported into this count ry for commercial purposes, for research, for education, and by hobbyists and coll ectors, and are covered under the Act. In addition, many less obvious products, such as pharmaceuticals, c ontain plant products and are also covered under the Act. Therefore, the im porters potentially affected by the rule represent a broad crosssection of U.S. businesses, government a nd university research institutions, non-profit operations, and individuals. Importers of plants and plant products are primarily identified w ithin the wholesaling sector of the U.S. economy. Importers either sell goods on their own acc ount (import merchants) or arrange for the sale of goods owned by others (import agents and brokers). Importers fall into the North American Industry Classification System (NAICS) sector 42. In particular, fruit and vegetable importers are in sect or 424480, fresh fruit and vegetabl e wholesale. Importers of frozen fruits and vegetables ar e part of NAICS sector 424420, pack aged frozen food wholesale. Importers of flowers and nursery stock are part of NAICS 424930, flower, nursery stock & florists’ supplies wholesale. Importers of seeds are part of NAICS 424910, farm supplies wholesale. In 2007, the average wholesaling establishmen t had revenues of $15 million. Fresh fruit and vegetable wholesalers had average reve nues of $12.4 million; packaged frozen fruit8 wholesalers had average revenues of $25.1 million; flower, nursery stock and florist supplies wholesalers had average revenues of $2.8 million; and farm supply wholesalers had average revenues of $9.5 million. 10 A firm primarily engaged in wholesaling comm odities is considered small if it employs not more than 100 persons. In 2002, more than 98 percent of all wholesaling establishments were considered small. 11 About 95 percent of fruit and ve getable wholesalers and packaged frozen food wholesalers were considered small. More than 97 percent of flower, nursery stock & florists’ supplies wholesalers were considered small and nearly 98 percent of farm supply (seed) wholesalers were considered small. Entities conducting research and experimental development on plants and plant products may also be affected by the rule and are part of NAICS sector 541712, research and development in the physical, engineeri ng, and life sciences. In 2002, entities in this sector had an average of $6 million in revenues. 12 A business concern primarily engage d in research is considered small by the SBA if it employs no more than 500 pe rsons. Firms involved in research and development in the life sciences comprise NAI CS sector 5417102. About98 percent of these firms were considered small in 2002. Research and experimental development also occurs at educational institutions and they may also be affected by the definitions. Elem entary and secondary schools, junior colleges, colleges and universities are cons idered small if they have an nual revenues of $6.5 million or less. We do not have enough information to de termine the number of elementary and secondary

10 U.S Department of Co mmerce, U.S. Census Bu reau, 2007 Economic Census. 11 Data on the employment size of establishments is not yet avai lable in the 2007 Economic Census. 12 Data from the 2007 Economic Census is not yet available for some categories.9 schools that would be considered small. According to data from the Department of Education, about 20 percent of colleges and univers ities were considered small in 1996. Zoos and museums also import plants and plan t products. Zoos and botanical gardens are classified in NAICS sector 712130. In 2002, zoos and botanical gardens exempt from Federal income tax had average revenues of $4.7 million, while those institutions subject to Federal income tax had average revenues of $1.6 million. Museums are classified in NAICS sector 712110. In 2002, museums exempt from Federal income tax had average revenues of $1.5 million, while those museums subject to Federal income tax had average revenues of $1.2
million. Museums and zoos are considered small if they have annual revenues of $6.5 million or less. Between 94 and 97 percent of museums and between 83 and 90 percent of zoos and botanical gardens were considered small in 2002. 13 From the above it is clear that the majority of potentially affect ed entities would be considered small. To the extent that the ru le defines which products are excluded from the provisions of the Act, it will benefit U.S. importers, large and small. 14 By defining the terms “common food crop” and “common cult ivar,” the rule facilitates importer compliance with the Act’s requirements. Projected Reporting, Recor dkeeping, and Other Compliance Requirements This rule contains no new information co llection or recordkeep ing requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

13 Ibid. 14 Enforcement of the declaration requirements is being ph ased in utilizing categories from the Harmonized Tariff Schedule of the United States. Only some product categories are currently being enforced. Therefore, some products that are not exempted under the Act can curr ently enter the United States without a declaration. Conversely, a small number of declarations are curren tly being filed for commodities that are either common cultivars or common food crops under the definitions in this rule.10 Steps taken by APHIS to minimize Significant Economic Impacts on Small Entities Based on our review of available information, APHIS does not expect the rule to have a significant economic impact on small entities. In the absence of significant economic impacts, we have not identified alternatives that would minimize such impacts.