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<h1 class="title"><a name="_Toc238895377"></a>Regulatory Impact Analysis and</h1>
<h1 class="title"><a name="_Toc238895378"></a>Initial Regulatory Flexibility Analysis</h1>
<h1 class="title"></h1>
<h1 class="title"><a name="_Toc238895379"></a>Interim Rule</h1>
<h1 class="title"></h1>
<h1 class="title"><a name="_Toc238895381"></a>Citrus Greening and Asian Citrus Psyllid; Quarantine and Interstate Movement Regulations</h1>
<h1 class="title"> APHIS-2008-0015</h1>
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<h2 class="subtitle"><a name="_Toc238895382"></a>U.S. Department of Agriculture</h2>
<h2 class="subtitle"><a name="_Toc238895383"></a>Animal and Plant Health Inspection Service</h2>
<h2 class="subtitle">May 2010</h2>
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<p><a name="_Toc238895385"></a><a name="_Toc238895452"></a></p>
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<h1><a name="_Toc262203754"></a>Summary</h1>
<p> This analysis accompanies an interim rule quarantining the States of Florida and Georgia, Puerto Rico, the U.S. Virgin Islands, two parishes in Louisiana, and two counties in South Carolina due to the presence of citrus greening and quarantining Alabama, Florida, Georgia, Guam, Hawaii, Louisiana, Mississippi, Puerto Rico, Texas, the U.S. Virgin Islands, three counties in South Carolina, portions of one county in Arizona, and all of three and portions of an additional three counties in California due to the presence of Asian citrus psyllid (ACP), a vector of the bacterial pathogen that causes citrus greening.  This regulatory action follows the discovery of these pests in the respective quarantined areas.  The rule also establishes restrictions on the interstate movement of regulated articles from the quarantined areas.</p>
<p>In terms of potential production losses, effects on trade, and marketing implications, the further spread of citrus greening and ACP poses a serious threat to the U.S. citrus industry.  This interim rule aims to prevent the artificial spread of the disease and its vector to currently unaffected areas of the United States.  Without such regulations, citrus greening is likely to spread to such areas, including several commercial citrus-producing areas, to the grave detriment of the citrus industry. </p>
<p>The cost of the interim rule to small entities within areas quarantined for ACP includes all costs of treatment prior to transport.  Small entities located within areas quarantined for citrus greening face the loss of domestic market access due to prohibitions on the interstate movement of regulated articles; however, entities located in Florida already by and large face such movement prohibitions under existing Federal and State citrus canker regulations and previous citrus greening Federal Orders.  Entities in such areas may also face costs associated with labeling nursery stock destined for commercial sale; we welcome public comment regarding those costs.  Small entities in areas quarantined only for ACP but not for citrus greening may incur costs associated with treatment prior to interstate movement of the articles, as well as the loss of market access to other commercial citrus-producing States not currently quarantined for ACP.  APHIS requests information regarding small entities located in Arizona, Alabama, Georgia, Hawaii, Mississippi, South Carolina, Guam, and the U.S. Virgin Islands who may be impacted by this rule.  APHIS particularly welcomes comments from such entities regarding treatment costs and costs associated with printing and affixing limited permit tags.  </p>
<p>Regulated nursery stock grown, produced, or maintained at a nursery or other facilities located in an area quarantined for citrus greening can be moved interstate for immediate export; regulated articles produced in an area quarantined only for ACP, but not for citrus greening, may be moved interstate under conditions designed to ensure that the articles do not present a pathway for the artificial spread of citrus greening or ACP to unaffected areas of the United States.    Implementing this interim rule is necessary to prevent the spread of citrus greening to areas in other commercial citrus-producing States from which the movement of regulated articles is not currently prohibited under the regulations, and to protect the markets currently available to those operations.</p>
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<p>Table of Contents
Summary	i
Introduction	1
Expected Costs Associated with this Rule	2
Expected Benefits of the Interim Rule............................................................11
Initial Regulatory Flexibility Analysis	12
Reasons Action is Being Considered	12
Objectives of and Legal Basis for the Rule	14
Affected Small Entities	14
Projected Reporting, Recordkeeping, and Other Compliance Requirements	21
Duplication, Overlap, or Conflict with Existing Rules and Regulations	21
Alternatives to minimize Significant Economic Impacts of the Rule	21
References	24
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<h1><a name="_Toc262203755"></a>Introduction</h1>
<p>Under section 412(a) of the PPA, the Secretary of Agriculture may prohibit or restrict the movement in interstate commerce of any plant or plant product, if the Secretary determines that the prohibition or restriction is necessary to prevent the dissemination of a plant disease within the United States.  Under the Act, the Secretary may also issue regulations requiring plants and products moved in interstate commerce to be subject to remedial measures the Secretary determines necessary to prevent the spread of the disease, or requiring the articles to be accompanied by a permit issued by the Secretary prior to movement. </p>
<p>Pursuant to that Act, the interim rule examined by this analysis quarantines the States of Florida and Georgia, Puerto Rico, the U.S. Virgin Islands, two parishes in Louisiana, and two counties in South Carolina due to the presence of citrus greening and quarantines Alabama, Florida, Georgia, Guam, Hawaii, Louisiana, Mississippi, Puerto Rico, Texas, the U.S. Virgin Islands, three counties in South Carolina, portions of one county in Arizona, and all of three and portions of an additional three counties in California due to the presence of ACP, a vector of the bacterial pathogen that causes citrus greening.  This action follows the discovery of these pests in the respective quarantined areas.  The rule also establishes restrictions on the interstate movement of regulated articles from the quarantined areas.  This action is necessary on an emergency basis in order to prevent the spread of the disease and its vector to noninfested areas of the United States. </p>
<p>Benefits and costs of the rule are examined in accordance with Executive Order 12866, and the benefits are expected to exceed the costs overall.  Possible impacts on small entities are considered in accordance with the Regulatory Flexibility Act.</p>
<h1><a name="_Toc238895387"></a><a name="_Toc238895454"></a><a name="_Toc262203756"></a>Expected Costs Associated with this Rule</h1>
<p>The interim rule will affect nursery operations and other production sites[footnoteRef:1] located within quarantined areas in Alabama, Arizona, California, Florida, Georgia, Guam, Mississippi, Louisiana, Puerto Rico, South Carolina, Texas, and U.S. Virgin Islands that produce citrus trees, orange jasmine, curry leaves, and other articles regulated by the interim rule. [footnoteRef:2]   The effects of this interim rule on nursery operations will depend on the type of nursery operation and the quarantine requirements imposed upon it.  For areas quarantined for citrus greening, affected entities will continue to suffer a complete loss of interstate market access.  We lack information regarding losses that have stemmed from this prohibition and therefore request specific public comment from producers and other entities in areas currently quarantined for citrus greening.  We also request public comment from such entities regarding the degree to which they have been able to mitigate these losses by redirecting sales of regulated articles to their own quarantined area or export markets.   [1:  Curryleaf is typically grown not in a nursery, but in a grove or backyard production site.  APHIS lacks information regarding the number and size of curryleaf producers potentially affected by this interim rule, and therefore welcomes public comment regarding this information.]  [2:  Certain producers of regulated plant parts may not incur costs associated with this interim rule, provided that the parts have been heated, frozen, dried, pickled, shredded, or otherwise processed such that an inspector determines they no longer present a risk of spreading ACP or citrus greening.  The inspector may exempt such parts from the regulations, and allow their unrestricted movement.
] 
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<p>In a related issue, this rule designates several species as potential hosts for citrus greening that were not considered hosts, and therefore not regulated as such, under the Federal Order.  These are <u>Aegle</u> <u>marmelos</u>, <u>Afraegle</u> <u>gabonensis</u>, <u>A</u>. <u>paniculata</u>, <u>Atalantia</u> spp. (including <u>Atalantia</u> <u>monophylla</u>), <u>Citropsis</u> <u>articulata</u>, <u>Citropsis</u> <u>gilletiana</u>, <u>Clausena</u> <u>anisum-olens</u>, <u>C</u>. <u>excavata</u>, <u>Eremocitrus</u> <u>glauca</u>, <u>Eremocitrus</u> hybrid, <u>Merrillia</u> <u>caloxylon, M</u>. <u>australis</u>, <u>M</u>. <u>papuana,</u> X <u>Microcitronella</u> spp., <u>Naringi</u> <u>crenulata, </u> <u>Tetradium</u> <u>ruticarpum</u>, <u>Toddalia</u> <u>asiatica</u>, and <u>Zanthoxylum</u> <u>fagara</u>.  Similarly, based on emerging evidence, this rule regulates four species that were not included as citrus greening or ACP hosts in the December 2009 Federal Order:  <u>Amyris</u> <u>madrensis</u>, <u>Choisya</u> <u>ternate</u>, <u>C</u>. <u>arizonica</u>, and <u>Esenbeckia</u> <u>berlandieri</u>.  Producers in areas quarantined for citrus greening will now be prohibited from moving regulated articles of these species interstate, unless the articles are destined for immediate export. </p>
<p>APHIS lacks information regarding the amount of regulated articles of these species producers in citrus greening quarantined areas have moved in interstate commerce prior to this interim rule, and the losses they expect to incur as a result of the rule; we request specific public comment on these matters.</p>
<p>For areas quarantined only for ACP but not for citrus greening, nursery operations will incur costs associated with treatment and limited permit labeling prior to interstate movement of the articles, as well as the loss of market access to other commercial citrus-producing States not currently affected with ACP.  We lack information regarding losses that have stemmed from this prohibition on the movement of regulated articles to commercial citrus-producing States and request specific public comment from producers and other entities in areas currently quarantined for ACP, but not for citrus greening.  We also request public comment from such entities regarding the degree to which they have been able to mitigate losses by redirecting sales to other markets.  In addition, we welcome comment regarding the total cost per item to meet treatment and labeling requirements. </p>
<p>Finally, in a related matter, we also request specific comment from producers of <u>Amyris</u> <u>madrensis</u>, <u>Choisya</u> <u>ternate</u>, <u>C</u>. <u>arizonica</u>, and <u>Esenbeckia</u> <u>berlandieri</u> who have relied on movement of these articles in interstate commerce prior to this rule’s issuance regarding the expected cost of complying with the rule’s provisions.</p>
<p>For those States that have elected to maintain equivalent quarantine regulations, nursery operations may incur costs associated with treatment prior to intrastate movement of the article.  The cost of soil drench and foliar spray treatments has been estimated to be approximately $0.24 per plant.[footnoteRef:3]  [3:   Texas Register, February 22, 2008, pg. 1475.
] 
</p>
<p>The interim rule would also include a new requirement not found in the Federal Order.  With limited exceptions, most regulated nursery stock offered for commercial sale within an area quarantined for citrus greening must have an APHIS-approved plastic or metal tag on which a statement alerting consumers to Federal prohibitions regarding the interstate movement of the article is prominently and legibly displayed.  Alternatively, if the article is destined for commercial sale in a box or container, the statement may be printed on a label permanently affixed to the box or container, provided that, in either case, the statement is prominently and legibly displayed.  Labeling costs are the responsibility of the operator of the site of propagation of the nursery stock and the person offering the plants for commercial sale, and do not add any perceived value to the nursery stock.  However, as we discuss below, additional costs per item are anticipated to be minimal such that the operator may pass the costs on to the consumer with very little loss of welfare.  Moreover, this requirement will not eliminate a current source of revenue for these entities, since, in effect, it merely reiterates an already existing prohibition on the interstate movement of regulated nursery stock from areas quarantined for citrus greening.  </p>
<p>Nurseries and commercial retailers of citrus nursery stock in Georgia, Puerto Rico, and the U.S. Virgin Islands, as well as those in areas within Louisiana and South Carolina that are quarantined for citrus greening, will be economically impacted by this labeling requirement.  Based on correspondence with authorities in Puerto Rico, we have determined that there are 10 nurseries in the Commonwealth that sell regulated articles to the general public, with a total aggregate inventory of roughly 36,000 nursery plants.  If all of these plants are destined for commercial sale, the total cost to the industry to affix the requisite label would be $720-1,080. [footnoteRef:4] [4:  Source:  Puerto Rico and the United States Virgin Islands State Plant Health Director.  Correspondence with APHIS, February 2010.] 
</p>
<p>We have determined that there are presently 475 host articles inventoried at wholesale nurseries and 166 host articles inventoried at retail centers in the three counties in South Carolina that are quarantined for ACP or for ACP and citrus greening.  If all of these plants are located in the two counties that are quarantined for citrus greening and each plant is destined for commercial sale, the total cost to the industry to affix the requisite label would be approximately $12-20. [footnoteRef:5]     [5:  Source:  South Carolina State Plant Health Director.  Correspondence with APHIS, February 2010.] 
</p>
<p>APHIS does not have information regarding such entities in Georgia or the U.S. Virgin Islands, and requests public comment regarding their number, and the costs that they anticipate in order to meet the requirement.  Specifically, we request information regarding the expected cost per tag, and the number of tags that entities expect to affix seasonally in order to meet this requirement.   </p>
<p>That said, the majority of entities that will need to adhere to the requirement will be in the State of Florida.  The Florida Department of Agriculture and Consumer Services (FDACS) currently requires that all plants produced in commercial nurseries within the State have a tag stating the species and variety of the nursery stock, as well as the identity of the producer.  We have determined that the statement we are requiring can be printed on the reverse side of these tags, and we further estimate that the cost of this additional printing would not be greater than two cents per tag.  This would result in a total cost to the Florida retail nursery industry of $158,000.  This cost is marginal given the size of the industry, and would likely be passed on to consumers.   </p>
<p>Additionally, nursery operations located within areas quarantined for ACP that wish to move articles under a limited permit must be labeled with a tag stating that the articles may not be moved to citrus-producing areas of the United States that are not quarantined for ACP.  We estimate the cost of such tags to be approximately three cents per tag.  We expect that this will result in a minimal cost to the citrus industry in States quarantined for ACP, even if the industry relies heavily on interstate commerce of regulated articles.  For example, in Plaquemines Parish, LA, where 60 to 70 percent of nursery propagations are destined for interstate movement, we anticipate the additional cost to the industry to be $3,000 to $9,000.  We invite public comment regarding such costs, specifically regarding costs per tag in other States that are quarantined for ACP, but not for citrus greening, and the total number of tags that entities in such States have applied or expect to apply seasonally to meet this labeling requirement for interstate movement of host articles.    </p>
<p>Quarantine costs arising from the presence of citrus greening or ACP in an area are considered to be small when compared to the potential costs if citrus greening were to spread and become established in citrus-producing areas throughout the United States.  The avoidance of such costs is therefore of significant benefit to operations in areas that are not quarantined for ACP or citrus greening.  This will be addressed at greater length below.  </p>
<p>APHIS welcomes additional information that the public may provide regarding the costs directly associated with the implementation of this interim rule.</p>
<p>Expected Benefits of the Interim Rule</p>
<p>The interim rule will protect the integrity of the U.S. citrus industry by reducing the risk of the spread of citrus greening and ACP to areas currently free from the disease and its vector.  Strengthening our safeguards against the spread of citrus greening and ACP is expected to result in extensive economic benefits.  Citrus greening reduces the volume and quality of citrus produced in areas in which it becomes endemic.  Citrus trees infected with citrus greening produce misshapen and bitter fruit that cannot be sold on either the fresh or processed markets.  Reduced marketable yield, fewer trees due to higher tree mortality and removal of infected trees, and fruit drop all contribute to production losses.  The regulations established by this interim rule will help minimize potential production losses by reducing the risk of disease and pest spread.</p>
<p>The primary benefit of the interim rule is protecting the U.S. citrus industry as a whole from further losses associated with citrus greening.  The citrus industry has struggled with significant fluctuations in production and a considerable decline in bearing acreage for more than a decade.  Attributable factors include more profitable land-use alternatives, inclement weather, and the introduction and spread of harmful plant pests and diseases.  Bearing citrus acreage totaled 856,200 acres during the 2006-2007 season, less than three-fourths of the peak U.S. bearing acreage during the 1996-1997 season.[footnoteRef:6]   [6:  NASS, “Citrus Fruits 2007 Summary,” 2007. ] 
</p>
<p>Florida continues to be the largest citrus producer in the United States, accounting for approximately 70 percent of U.S. production during the 2006-2007 season.  California produced approximately 25 percent of U.S. citrus during the same period, and production in Texas and Arizona comprised the remaining 5 percent.[footnoteRef:7]  Below, table 1 shows the production, value of production, and utilization of all citrus fruits by State for the 2002-2003 through 2006-2007 seasons.[footnoteRef:8]  Total utilized citrus production in the United States in the 2006-2007 season decreased 13 percent from the previous season, while bearing acreage declined by 2 percent.    Total utilized production in California and Arizona in the 2006-2007 season declined from the previous season by 27 and 35 percent, respectively, whereas utilized production in Texas increased 33 percent over the previous season. [7:  NASS, “Citrus Fruits 2007 Summary,” 2007.  Production and utilization data for the four largest citrus-producing States—Florida, California, Texas, and Arizona—are reported in the Citrus Fruits 2007 Summary.  Production and utilization data for the remaining States designated within 7 CFR part 301 as commercial citrus-producing areas—American Samoa, Guam, Hawaii, Louisiana, Northern Mariana Islands, Puerto Rico, and Virgin Islands of the United States—are not readily available.  It is estimated that citrus production in these remaining States is less than 1 percent of total U.S. citrus production.  However, according to the Louisiana Department of Agriculture and Forestry, the total value of the Louisiana citrus industry was $6.4 million in 2008. ]  [8:   Source:  NASS, “Citrus Fruits 2007 Summary,” 2007.  The data range reported in table 1 provides information on the most recent season, as well as information for the two seasons prior to the first detection of citrus greening in the United States, the 2005 detection in Florida, and the two seasons following the detection of citrus greening in the United States. ] 
</p>
<p>Higher prices for the season more than compensated for the overall decline in production to deliver a total value of production (packinghouse-door equivalent) for the industry nationwide of $2.95 billion, an 8 percent increase over the previous season.  The increase in total value derives, in particular, from increased values for processed utilization of most varieties of citrus in the United States, with the exception of grapefruit and lemons.  These two fruits declined in overall value from the previous year by 18 and 2 percent, respectively.</p>
<p>The total value of production in Florida in 2006-2007 increased by 24 percent over the previous season.  In contrast, the value of production in California fell by 13 percent, the first decline in the value of production for that State in several seasons, when price increases failed to fully compensate for a 27 percent decline in production.</p>
<p>Total value of production for Texas citrus fruits remained fairly stable, with a slight 2 percent decline for the 2006-2007 season; production value had tripled from $29.8 million in 2003-2004 to $88.7 million in 2004-2005.  The value of production for the 2006-2007 season in Arizona increased by 36 percent, despite a 35 percent decline in production.</p>
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<p>Table 1.-<u>Citrus fruits:  Production, value of production, and utilization by major citrus-producing States for seasons 2002-03 through 2006-07</u></p>
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<table><tbody><tr>	<td><p>State/season</p>
</td>	<td><p>Production (1,000 tons)</p>
</td>	<td><p></p>
<p>Value of production </p>
<p>(1,000 dollars)1</p>
</td>	<td><p>Utilization of production</p>
</td></tr>
<tr>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p>Fresh</p>
<p>(1,000 tons)</p>
</td>	<td><p>Processed</p>
<p>(1,000 tons)</p>
</td></tr>
<tr>	<td><p>Florida</p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td></tr>
<tr>	<td><p>2002-03</p>
</td>	<td><p>11,206</p>
</td>	<td><p>1,356,930</p>
</td>	<td><p>1,327</p>
</td>	<td><p>9,879</p>
</td></tr>
<tr>	<td><p>2003-04</p>
</td>	<td><p>13,045</p>
</td>	<td><p>1,520,503</p>
</td>	<td><p>1,404</p>
</td>	<td><p>11,641</p>
</td></tr>
<tr>	<td><p>2004-05</p>
</td>	<td><p>7,597</p>
</td>	<td><p>1,142,858</p>
</td>	<td><p>836</p>
</td>	<td><p>6,761</p>
</td></tr>
<tr>	<td><p>2005-06</p>
</td>	<td><p>7,823</p>
</td>	<td><p>1,471,614</p>
</td>	<td><p>829</p>
</td>	<td><p>6,994</p>
</td></tr>
<tr>	<td><p>2006-07</p>
</td>	<td><p>7,236</p>
</td>	<td><p>1,818,346</p>
</td>	<td><p>920</p>
</td>	<td><p>6,316</p>
</td></tr>
<tr>	<td><p>California</p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td></tr>
<tr>	<td><p>2002-03</p>
</td>	<td><p>3,530</p>
</td>	<td><p>836,550</p>
</td>	<td><p>2,622</p>
</td>	<td><p>908</p>
</td></tr>
<tr>	<td><p>2003-04</p>
</td>	<td><p>2,855</p>
</td>	<td><p>893,439</p>
</td>	<td><p>2,377</p>
</td>	<td><p>478</p>
</td></tr>
<tr>	<td><p>2004-05</p>
</td>	<td><p>3,511</p>
</td>	<td><p>1,033,749</p>
</td>	<td><p>2,568</p>
</td>	<td><p>943</p>
</td></tr>
<tr>	<td><p>2005-06</p>
</td>	<td><p>3,460</p>
</td>	<td><p>1,146,725</p>
</td>	<td><p>2,533</p>
</td>	<td><p>927</p>
</td></tr>
<tr>	<td><p>2006-07</p>
</td>	<td><p>2,539</p>
</td>	<td><p>997,268</p>
</td>	<td><p>1,563</p>
</td>	<td><p>976</p>
</td></tr>
<tr>	<td><p>Texas</p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td></tr>
<tr>	<td><p>2002-03</p>
</td>	<td><p>292</p>
</td>	<td><p>26,171</p>
</td>	<td><p>181</p>
</td>	<td><p>111</p>
</td></tr>
<tr>	<td><p>2003-04</p>
</td>	<td><p>298</p>
</td>	<td><p>29,795</p>
</td>	<td><p>186</p>
</td>	<td><p>112</p>
</td></tr>
<tr>	<td><p>2004-05</p>
</td>	<td><p>339</p>
</td>	<td><p>88,684</p>
</td>	<td><p>177</p>
</td>	<td><p>162</p>
</td></tr>
<tr>	<td><p>2005-06</p>
</td>	<td><p>277</p>
</td>	<td><p>73,890</p>
</td>	<td><p>183</p>
</td>	<td><p>94</p>
</td></tr>
<tr>	<td><p>2006-07</p>
</td>	<td><p>368</p>
</td>	<td><p>72,598</p>
</td>	<td><p>200</p>
</td>	<td><p>168</p>
</td></tr>
<tr>	<td><p>Arizona</p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td></tr>
<tr>	<td><p>2002-03</p>
</td>	<td><p>152</p>
</td>	<td><p>40, 325</p>
</td>	<td><p>92</p>
</td>	<td><p>60</p>
</td></tr>
<tr>	<td><p>2003-04</p>
</td>	<td><p>162</p>
</td>	<td><p>41,315</p>
</td>	<td><p>112</p>
</td>	<td><p>50</p>
</td></tr>
<tr>	<td><p>2004-05</p>
</td>	<td><p>127</p>
</td>	<td><p>38,134</p>
</td>	<td><p>79</p>
</td>	<td><p>48</p>
</td></tr>
<tr>	<td><p>2005-06</p>
</td>	<td><p>185</p>
</td>	<td><p>46,132</p>
</td>	<td><p>108</p>
</td>	<td><p>77</p>
</td></tr>
<tr>	<td><p>2006-07</p>
</td>	<td><p>121</p>
</td>	<td><p>62,916</p>
</td>	<td><p>90</p>
</td>	<td><p>31</p>
</td></tr>
</tbody></table>
<p>
</p>
<table><tbody><tr>	<td><p>United States</p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td>	<td><p></p>
</td></tr>
<tr>	<td><p>2002-03</p>
</td>	<td><p>15,180</p>
</td>	<td><p>2,259,976</p>
</td>	<td><p>4,222</p>
</td>	<td><p>10,958</p>
</td></tr>
<tr>	<td><p>2003-04</p>
</td>	<td><p>16,360</p>
</td>	<td><p>2,500,539</p>
</td>	<td><p>4,079</p>
</td>	<td><p>12,281</p>
</td></tr>
<tr>	<td><p>2004-05</p>
</td>	<td><p>11,574</p>
</td>	<td><p>2,303,425</p>
</td>	<td><p>3,660</p>
</td>	<td><p>7,914</p>
</td></tr>
<tr>	<td><p>2005-06</p>
</td>	<td><p>11,745</p>
</td>	<td><p>2,738,361</p>
</td>	<td><p>3,653</p>
</td>	<td><p>8,092</p>
</td></tr>
<tr>	<td><p>2006-07</p>
</td>	<td><p>10,264</p>
</td>	<td><p>2,951,128</p>
</td>	<td><p>2,773</p>
</td>	<td><p>7,491</p>
</td></tr>
</tbody></table>
<p>1 Packinghouse-door equivalents.</p>
<p>Source:  NASS, “Citrus Fruits 2007 Summary,” September 2007.</p>
<p></p>
<p>Fluctuations in production, utilization, and value of citrus notwithstanding, as is evident from table 1, commercial citrus production within the United States is both substantial and valuable.  In the absence of the provisions codified in this interim rule, the eventual introduction of citrus greening to every commercial citrus-producing area within the United States would be likely.  Because the symptoms associated with citrus greening may remain latent for several years, a plant that was infected but asymptomatic could serve as a pathway to infection of many surrounding host plants for an extended period of time.  Moreover, because, in many instances of infection, citrus greening leads to the eventual death of the host tree, this would likely lead to a steep reduction in the amount of bearing acreage nationwide.  This could, in turn, have a lasting and profoundly deleterious effect on the industry as a whole, should the disease spread through commercial citrus-producing areas in the United States.</p>
<p></p>
<p></p>
<p>APHIS welcomes comments on the benefits associated with the issuance of this interim rule, especially the benefits associated with the exportation of citrus products and the maintenance of trade that commercial citrus-producing areas may expect to experience because of the issuance of this rule.      </p>
<h1><a name="_Toc262203757"></a>Initial Regulatory Flexibility Analysis</h1>
<p>The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations, and small governmental jurisdictions.  Section 603 of the Act requires agencies to prepare and make available to the public an initial regulatory flexibility analysis (IRFA) describing the expected impact of the rule on small entities, unless the head of the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.  Section 603(b) of the Act specifies the content of an IRFA.  In this section, we address these IRFA requirements.</p>
<h2><a name="_Toc238895388"></a><a name="_Toc238895455"></a><a name="_Toc262203758"></a>Reasons Action is Being Considered</h2>
<p>Citrus greening, also known as Huanglongbing disease of citrus, is considered to be one of the most serious citrus diseases in the world.  Citrus greening greatly reduces production, destroys the economic value of the fruit, and can kill trees.  Once infected, there is no cure for a tree with citrus greening disease.  In areas of the world where the disease is endemic, citrus trees decline and die within a few years and may never produce usable fruit.</p>
<p>The bacterial pathogen causing citrus greening can be transmitted by grafting, and, under laboratory conditions, by dodder.  There is also emerging evidence that seed transmission may occur.  The bacterial pathogen can also be transmitted by two insect vectors in the family <u>Psyllidae</u>:  <u>Diaphorina</u> <u>citri</u> Kuwayama, or ACP, and <u>Trioza</u> <u>erytreae</u> (del Guercio), the African citrus psyllid.  ACP is currently present in the United States, in the States and areas listed earlier in this document.  </p>
<p>The spread of citrus greening has unfavorable production, trade, and marketing implications.  Production losses due to the spread of citrus greening derive from control costs, reduced yields, and, in many instances, the eventual death of the infected citrus tree.  Widespread production losses over time could lead to an industry-wide decline in domestically grown fruit.  Also, affected commercial citrus-producing States may face barriers to trade for fresh citrus exported to other citrus-producing countries.</p>
<p>The total value of the U.S. citrus crop, including oranges, grapefruit, and specialty varieties intended for both the fresh and processed market, was estimated to be $2.95 billion for the 2006-2007 season.[footnoteRef:9]  However, the nation’s fruit-bearing acreage has declined by 26 percent since 1996, in part because of the introduction and spread of harmful pests and diseases.[footnoteRef:10]  Nonetheless, the spread of citrus greening and ACP, its vector, could lead to exponentially greater losses within the citrus industry. [9:   NASS, “Citrus Fruits 2007 Summary,” September 2007. ]  [10:  For 2006 statistics, see NASS, “Commercial Citrus Inventory 2006,” updated February 2007. ] 
</p>
<p>Therefore, this interim rule is needed to prevent the spread of citrus greening and ACP to unaffected areas of the United States, and to mitigate the costs associated with this disease and pest.  The rule accomplishes these objectives by quarantining affected areas, by prohibiting the interstate movement of regulated articles from areas quarantined for citrus greening, by establishing treatment requirements for regulated articles destined for interstate movement from an area quarantined only for ACP but not for citrus greening, and by prohibiting the interstate movement of such regulated articles to commercial citrus-producing States, if they are not treated with irradiation or methyl bromide.</p>
<p></p>
<h2><a name="_Toc238895389"></a><a name="_Toc238895456"></a><a name="_Toc262203759"></a>Objectives of and Legal Basis for the Rule</h2>
<p><a name="_Toc238895390"></a><a name="_Toc238895457"></a>The objective of this interim rule is to prevent the spread of citrus greening and ACP to other commercial citrus-producing areas by prohibiting or restricting the movement of host material outside of areas quarantined for the pest or the disease.  The legal basis for this action is outlined in section 412(a) of the PPA, which allows the Secretary of Agriculture to prohibit or restrict the movement in interstate commerce of any plant or plant product, if the Secretary determines that the prohibition or restriction is necessary to prevent the dissemination of a plant disease within the United States.</p>
<h2><a name="_Toc262203760"></a>Affected Small Entities</h2>
<p>This interim rule will affect nursery operations and other production sites in Alabama, Arizona, California, Florida, Georgia, Guam, Hawaii, Louisiana, Mississippi, Puerto Rico, South Carolina, Texas, and the U.S. Virgin Islands that produce citrus trees, orange jasmine, curryleaf, and other articles regulated by the interim rule.  The effects of this interim rule on nursery operations will depend on the type of quarantine imposed.  For areas quarantined for citrus greening, nursery operations will suffer a complete loss of domestic market access.  For areas quarantined only for ACP but not for citrus greening, nursery operations will incur costs associated with treatment prior to interstate movement of the articles, as well as the loss of market access to other citrus-producing States not currently affected with ACP.  For those States that have elected to maintain parallel quarantine regulations, nursery operations may incur costs associated with treatment prior to intrastate movement of the article. </p>
<p>As an example of ACP quarantine costs, the Texas State entomologist has estimated the cost of treatments with soil drenches and foliar sprays due to the quarantine in Texas to be approximately $0.24 per plant.  The entomologist has estimated that the total cost of treatments for the industry within Texas could be as much as $40,320 ($0.24 X 164,000, the number of plants in the State that the entomologist considers to be destined for interstate movement at some point).[footnoteRef:11]   [11:  Texas Register, February 22, 2008, pg. 1475.] 
</p>
<p>The small business standard for nurseries identified by the Small Business Administration (SBA), based upon the North American Industry Classification System (NAICS) code 111422 (“nursery and tree production,” a subset of NAICS 1114, “greenhouse, nursery, and floriculture production”) is $750,000 or less in annual receipts.[footnoteRef:12]  We will now examine the possible impact of this rule on nurseries by State.   [12:  Source:  2002 Census of Agriculture-State Data and the “Small Business Size Standards by NAICS Industry,” 13 CFR Chapter 1.] 
</p>
<p><u>Arizona</u></p>
<p>APHIS does not have information on the size distribution of affected nursery operations in Arizona, but, according to the <u>2007 Census of Agriculture</u>, there were 258 greenhouse, nursery, and floriculture operations (NAICS 1114).[footnoteRef:13]  Of these, at least 73 percent had annual sales in 2007 of less than $500,000, which is well below the SBA’s small-entity threshold of $750,000.[footnoteRef:14]  We have determined that the majority of citrus production/nurseries are located within Yuma County, the county in which areas are quarantined for ACP.  While information on cash receipts by size of operation is not readily available, it is reasonable to assume that the majority of citrus operations in these counties qualify as small entities.   [13:  NASS, United States Department of Agriculture (USDA), “United States:  Summary and State Data, Volume 1,” 2007 Census of Agriculture, issued February 2009.]  [14:  Source:  SBA and 2002 Census of Agriculture.] 
</p>
<p><u>California</u></p>
<p>APHIS does not have information on the size distribution of affected nursery operations in California, but, according to the <u>2007 Census of Agriculture</u>, there were 3,549 greenhouse, nursery, and floriculture operations (NAICS 1114).[footnoteRef:15]  Of these, more than 78 percent had annual sales in 2007 of less than $500,000, which is below the SBA’s small-entity threshold of $750,000.[footnoteRef:16]  We have ascertained that the majority of citrus nurseries are located within San Diego and Imperial Counties—that is, within counties containing areas quarantined for ACP.  While information on cash receipts by size of operation is not readily available, it is reasonable to assume that the majority of citrus operations in these counties qualify as small entities.   [15:  NASS, United States Department of Agriculture (USDA), “United States:  Summary and State Data, Volume 1,” 2007 Census of Agriculture, issued February 2009.]  [16:  Source:  SBA and 2002 Census of Agriculture.] 
</p>
<p><u>Florida</u></p>
<p>Most nursery operators in the State of Florida are small entities, according to SBA standards.  In an interim rule effective and published in the <u>Federal</u> <u>Register</u> on August 1, 2006 </p>
<p>(71 FR 43345-43352, Docket No. APHIS-2006-0114), APHIS amended the domestic quarantine regulations by designating the entire State of Florida as a quarantined area for citrus canker.  This change had the effect of explicitly forbidding the movement of fruit into States designated as commercial citrus-producing areas and the movement of other citrus articles into any State.[footnoteRef:17]  The amended regulations reflected a change in policy earlier that year, when USDA announced on January 10, 2006, that the eradication-based program pursued by USDA and the State of Florida up to that point was no longer a scientifically feasible option to address citrus canker.   [17:  To view this rule, go to http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2006-0114.] 
</p>
<p>In an interim rule[footnoteRef:18] effective and published in the <u>Federal</u> <u>Register</u> on March 22, 2007   (72 FR 13423-13428, Docket No. APHIS-2007-0032), APHIS clarified the citrus canker regulations in order to explicitly forbid, with two, limited exceptions, the interstate movement of regulated nursery stock from areas quarantined for citrus canker and to address the risk associated with such movement.  As one of these exceptions, we allowed calamondin and kumquat nursery stock to move interstate in accordance with a protocol designed to ensure their freedom from citrus canker prior to movement.  The other exception allowed nursery stock to be moved interstate for immediate export.   [18:  To view this rule, go to http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2007-0032.] 
</p>
<p>When we issued our January 11, 2008 Federal Order to designate the entire State as a quarantined area for citrus greening, this had the effect of prohibiting the interstate movement of all citrus nursery stock, including calamondins and kumquats, from Florida, unless the articles were treated for ACP and moved for immediate export; this interim rule codifies that prohibition.</p>
<p> Accordingly, the entities in Florida that faced a loss of market access as a direct result of the January 11, 2008 Federal Order were calamondin and kumquat producers.  </p>
<p>Although APHIS has not yet been able to confirm the number of citrus nursery</p>
<p>stock producers in the State of Florida currently engaged in calamondin nursery stock production, correspondence with State officials has suggested that there are nine such</p>
<p>producers.  According to these same officials, there are, moreover, at least five nurseries in the State that engage exclusively in calamondin propagation.[footnoteRef:19]  [19:  Source:  Florida’s Department of Agriculture and Consumer Services/Bureau of Plant and Apiary Inspection.  Correspondence with APHIS, November 2007.] 
</p>
<p>Although APHIS has not been able to confirm the number of citrus nursery stock producers in the State of Florida currently engaged in kumquat nursery stock production, correspondence with State officials has suggested that there are no more than four such producers.[footnoteRef:20]   [20:  Ibid.] 
</p>
<p>APHIS welcomes comment from calamondin and kumquat producers in Florida regarding losses that they have incurred as a result of the January 11, 2008 Federal Order.  </p>
<p><u>Hawaii</u></p>
<p>APHIS does not have information on the size distribution of affected nursery operations in Hawaii, but, according to the <u>2007 Census of Agriculture</u>, there were 1,393 greenhouse, nursery, and floriculture operations within the State (NAICS 1114).[footnoteRef:21]  Of these, nearly 96 percent had annual sales in 2007 of less than $500,000, which is well below the SBA’s small-entity threshold of $750,000. [21:  Source: NASS, “United States:  Summary and State Data, Volume 1,” 2007 Census of Agriculture, issued February 2009.] 
</p>
<p><u>Louisiana</u></p>
<p>APHIS does not have information regarding the size distribution of the total affected nursery operations in Louisiana, but, according to the <u>2007 Census of Agriculture,</u> there were a total of 661 greenhouse, nursery, and floriculture operations (NAICS 1114).[footnoteRef:22]  Of this number, more than 93 percent had annuals sales in 2002 of less than $500,000, which is well below the SBA’s small-entity threshold of $750,000.[footnoteRef:23] [22:  NASS, “United States:  Summary and State Data, Volume 1,” 2007 Census of Agriculture, issued February 2009.]  [23:  Source:  SBA and 2002 Census of Agriculture.] 
</p>
<p>We have ascertained that the majority, if not all, of the State’s citrus operations are located within Plaquemines Parish.[footnoteRef:24]  There are approximately 10 nurseries in this parish; these operations produce roughly 350,000 to 400,000 trees per year.  While information on cash receipts by size of operation is not readily available, it is reasonable to assume that a majority qualify as small entities.  Moreover, approximately 60 to 70 percent of Louisiana’s citrus nursery stock is currently shipped interstate.  Thus, it is reasonable to assume that this rule will impose costs, in the form of treatment requirements and movement restrictions, on several small entities within the State. [24:  Source:  Louisiana Department of Agriculture and Forestry.  Correspondence with APHIS, September 2008.] 
</p>
<p><u>Puerto Rico</u></p>
<p>APHIS has limited information on the size distribution of affected nursery operations in Puerto Rico, but, according to the <u>2007 Census of Agriculture</u>, there were 524 greenhouse, nursery, and floriculture operations within Puerto Rico (NAICS 1114).[footnoteRef:25]  Of these, nearly 65 percent had annual sales in 2007 of less than $60,000, which is well below the SBA’s  [25:  Source: NASS, “Puerto Rico: Island and Municipio Data, Volume 1, Geographical Area Series, Part 52” 2007 Census of Agriculture, issued February 2009.] 
</p>
<p>small-entity threshold of $750,000.  APHIS does not have information on the size distribution of the 182 greenhouse, nursery, and floriculture operations within Puerto Rico (NAICS 1114) whose operations exceed $60,000. </p>
<p><u>South Carolina</u></p>
<p>In South Carolina, Colleton County is quarantined for ACP, while Beaufort and Charleston Counties are quarantined for both ACP and citrus greening.  APHIS has limited information on the size distribution of affected nursery operations in these counties, but, according to the <u>2007 Census of Agriculture</u>, there were 846 greenhouse, nursery, and floriculture operations within South Carolina (NAICS 1114).[footnoteRef:26]  Of these, 92 percent had annual sales in 2007 of less than $500,000, which is well below the SBA’s small-entity threshold of $750,000.  APHIS does not have information on the size distribution of the greenhouse, nursery, and floriculture operations located within the restricted counties (NAICS 1114).   [26:  Source: NASS, United States Department of Agriculture (USDA), “United States:  Summary and State Data, Volume 1,” 2007 Census of Agriculture, issued February 2009.] 
</p>
<p></p>
<p><u>Texas</u></p>
<p>Eighteen commercial citrus operations accounted for 95 percent of the citrus nursery plants produced in Texas in 2008.  Ten of these 18 operations meet the criteria set forth in the Texas Government Code § 2006.001(2) to be considered small businesses, i.e., they had less than 100 employees or $1 million in gross annual sales.  Additionally, there were another 17 nursery operations in Texas in 2008 producing citrus plants, along with non-citrus nursery plants, that would account for the remaining 5 percent of the State’s nursery stock.[footnoteRef:27]  Because the majority of the operations that account for 95 percent of Texas’ nursery stock production either meet or, at most, slightly exceed the SBA standards for small entities, it is therefore reasonable to assume that these nurseries, which account for a much smaller percentage of Texas’ nursery stock production, meet the small business size standard for nurseries identified by the SBA.  However, because APHIS lacks information regarding the total annual receipts of these nurseries or the percentage of those receipts that nursery stock sales constituted, we welcome any public comment regarding the impact of this rule on these entities. [27:  Source:  Texas Department of Agriculture.  Correspondence with APHIS, February 2009.] 
</p>
<p><u>Alabama, Georgia, Mississippi, Guam, and the U.S. Virgin Islands </u></p>
<p>APHIS lacks information and therefore welcomes additional public comment regarding the number and size of nursery operations that will be affected by this rule, including those entities possibly affected in Alabama, Georgia, Mississippi, the Territory of Guam, or the U.S. Virgin Islands.</p>
<p><u>Impact of Nursery Stock Labeling Requirements on Small Entities</u></p>
<p>Section 301.76-4 of this rule establishes labeling requirements for all regulated nursery stock offered for commercial sale within an area quarantined for citrus greening and makes the operator of the site of propagation of the nursery stock and the person offering the plants for commercial sale jointly responsible for all such labeling.  We have estimated this labeling to cost no more than two cents per tag for nurseries in Florida, which comprise the vast majority of entities that must adhere to this requirement.  We have also obtained preliminary outside estimates on the aggregate cost to the industry in Puerto Rico and South Carolina to affix the requisite label.  That said, we lack sufficient data regarding the cost of the requirement for nurseries in other areas that are quarantined for citrus greening, as well as the nature, number, and size of all potentially impacted entities, the percentage of total sales regulated articles represent out of total annual receipts for these businesses, and the number of tags they expect to apply seasonally as a result of this requirement.  We therefore request additional comment regarding such information, especially from “big box” stores (“Warehouse Clubs and Superstores,” NAICS 452910) that qualify as small entities under SBA standards (i.e., have less than $6.5 million in yearly annual receipts).</p>
<h2><a name="_Toc238895391"></a><a name="_Toc238895458"></a><a name="_Toc262203761"></a>Projected Reporting, Recordkeeping, and Other Compliance Requirements</h2>
<p>Reporting and recordkeeping requirements associated with the interim rule are discussed in the rule under the heading "Paperwork Reduction Act."</p>
<h2><a name="_Toc238895392"></a><a name="_Toc238895459"></a><a name="_Toc262203762"></a>Duplication, Overlap, or Conflict with Existing Rules and Regulations</h2>
<p>APHIS has not identified any duplication, overlap, or conflict of the interim rule with other Federal rules.</p>
<h2><a name="_Toc238895393"></a><a name="_Toc238895460"></a><a name="_Toc262203763"></a>Alternatives to minimize Significant Economic Impacts of the Rule</h2>
<p>We considered four alternatives to this interim rule.  One alternative to this interim rule was to leave the regulations unchanged.  However, failing to establish quarantined areas for citrus greening and ACP within the regulations would be an unsatisfactory decision.  Under the current regulations in 7 CFR part 301, the movement of regulated articles from areas in which citrus greening has been detected to unaffected areas is not prohibited.  Additionally, the current regulations do not restrict the movement of regulated articles from areas quarantined for ACP.  Leaving the regulations unchanged would likely lead to the spread of citrus greening from affected areas to other citrus-producing areas.  This would prove costly to commercial citrus production in those areas; indeed, because citrus greening leads, in many instances, to the death of the affected plant, its unrestricted spread could lead to the end of commercial citrus production within the United States.  Failing to implement mitigations on regulated articles shipped from areas in which ACP has been detected would likely allow ACP to be introduced to other commercial-citrus producing areas, and would increase the risk of citrus greening being introduced to these areas, as well.</p>
<p>Another alternative we evaluated was to allow the restricted movement of regulated articles from an area quarantined for citrus greening, following treatment for both ACP and citrus greening.  However, to date, while we have discovered efficacious treatment options for ACP, we have yet to discover an effective treatment for citrus greening.  Accordingly, in this interim rule, we are allowing the movement of regulated articles from an area that is quarantined only for ACP, but do not yet have a sufficient scientific basis for allowing the movement of regulated articles from an area quarantined for citrus greening.  If, however, we determine at some future point that measures exist that adequately mitigate the risk associated with such interstate movement, we will reevaluate this prohibition against interstate movement.    </p>
<p>The remaining two alternatives that we considered concern the implementation of our labeling requirement for regulated nursery stock offered for commercial sale within an area quarantined for citrus greening.  In the first of these alternatives, rather than make the labeling requirement effective 90 days after publication, we would have delayed the effective date indefinitely, pending public comment regarding compliance costs and overall feasibility.  If the labeling requirement were entirely the result of lack of consumer awareness regarding Federal prohibitions on the interstate movement of nursery stock from areas quarantined for citrus greening, if we could presume that businesses in quarantined areas were not actively marketing nursery stock to out-of-State consumers, and if the interstate movement of regulated nursery stock were not a high-risk pathway for the introduction of citrus greening into previously unaffected areas of the United States, such a delay would be appropriate.  However, marketing of nursery stock to tourists remains pervasive in Florida, and the interstate movement of regulated nursery stock is such a pathway.  Accordingly, after deliberation, we rejected this alternative.  We will, however, respond to all comments we receive on the labeling requirement in a follow-up regulatory action published in the <u>Federal Register</u>.</p>
<p>In the other alternative, we would have added a clause to the regulations stating that, in the event that all areas of the continental United States that are listed in § 301.75-5(a) as commercial citrus-producing areas (currently, Arizona, California, Florida, Louisiana, and Texas) become quarantined for citrus greening, the requirement would no longer remain in effect.  The primary goal of the requirement is to prohibit the introduction of citrus greening into such areas, hence the need for the requirement would appear to diminish greatly if citrus greening were already introduced into the areas.  However, as we allude to earlier in this document, there are several States, such as Alabama, Georgia, and Mississippi, that are not listed as commercial citrus-producing areas, but that maintain a sufficient number of groves to allow for the possibility of wide-spread commercial citrus production within the State at some future point.  In order to safeguard the fledgling citrus industry in such States, we rejected this alternative.  	</p>
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