### United States

Department of Agriculture Anim al and Plant Health Inspection Service Septem ber 201 1 Analysis in Support of Certification that the

Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities
Final Rule APHIS - 2010 - 0075 Expansion of Gypsy Moth Quarantined Areas in Indiana, Maine, Ohio, Virginia, West Virginia, and Wisconsin

Policy and Program Development Policy Analysis & Development

### Summary

This rule amends the gy

psy moth regulations by

expanding the quarantine boundary to include 1 count y in Indiana, parts of 3 counties and certain townships in Maine, 4 counties in Ohio, 4 counties in Virginia, 1 county in West Virginia, and parts of 3 counties in Wisconsin. USDA survey s conducted in these areas have detected all life stages of the gy ps y moth and reproducing populations at significant levels. This action is needed to prevent the introduction of gy ps y moth into non

- infested areas. This action will affect the interstate movement of regulated articles, including logs, Christmas trees, and nursery stock, and outdoor household articles, from and through the newl y regulated areas to non
- regulated areas. Compliance agreements facilitate certification and movement of regulated articles. Documents self

- issued under compliance agreement s help in avoiding delay s, but the quarantine can still result in minor costs associated with the time and record keeping required for the self

- inspections. There are between 196 and 246 loggers/shippers, 39 Christmas tree farms, 39 nurseries, and 47 garden centers in the newl y quarantined areas. All of these entities are considered small, according to Small Business Administration standards. The quarantine requirements may cause a slight increase in costs for some of these businesses, depending on the proportion of their sales made to buy ers in non

- quarantined areas. However, any negative impacts that may be incurred because of the rule will be small, espec iall y when compared to the harm to the forest industry and the U.S. econom y from further spread of the gyps y moth. T he Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic imp act on a substantial number of small entities.

### Introduction

This analy sis provides the basis, as required by the Regulatory

Flexibility

Act, for certification by

the APHIS Administrator that th is expansion of the gy ps y moth quarantine will not have a si gnificant economic impact on a substantial number of small entities. The gy ps y moth, Lymantria dispar , is a destructive pest of over 500 species of forest trees. Oak and alder are the gy ps y moth’s preferred broad

- leaf trees, and Douglas fir and western he mlock are the preferred needle

- bearing trees. More than 300 million acres of land in the United States have trees susceptible to damage from this pest. When defoliated b y gy ps y moths, the trees weaken and may die. The results are economic loss, harm to ecosy stems and wildlife habitat, disturbed wate r flow and water quality , and landscape spoiled for recreational
use. The rule amends the gy psy moth regulations at 7 CFR 301.45

- 3, by expanding the quarantine boundary

to include 1 count y in Indiana, parts of 3 counties and certain townships in Maine, 4 counties in Ohio, 4 counties in Virginia, 1 county in West Virginia, and parts of 3 counties in Wisconsin. This action is being taken because USDA surveys conducted in these areas have detected all life stages of the gy ps y moth and reproducing population s at significant levels. Eradication is not considered feasible because these areas are adjacent to areas currentl y recognized as generall y i nfested and therefore are subject to reinfestation. This action is needed to prevent the introduction of gy ps y mo th into non

- infested areas. When an agency

promulgates a final rule, it is required by the Regulatory

Flexibility

Act (RFA) to prepare a final regulatory flexibility

analy sis, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Theanal ys is that follows provides a factual basis for certification, as required in Section 605(b) of the

RFA. 

### Gypsy Moth Restrictions and Affected Entities This action will affect the interstate movement of regulated articles, including logs, Christmas trees, and nursery stock, and outdoor household articles (OHA), from and through the newly regulated areas to non
- regulated areas. Compliance agreements facilitate certification and movement of regulated articles. Documents self

- issued under compliance agreement s help in avoiding delay s, but can still result in costs associated with the time and record keeping required for the self

- inspections. Most shipments of regulated nursery stock and Christmas tr ees from gy ps y moth quarantined areas take place under compliance agreements that usuall y require treatment of the articles in the field. For example, evergreens that will be shipped are normally treated preventativel y each ye ar. Individual and commerc ial movers of OHA are required to attach to the articles either a certificate issued b y an inspector, or an OHA inspection document issued by the owner of the articles, ensuring absence of gy ps y moths. There is no charge for the certification or inspectio n document. Inspection takes a few minutes for each item and involves no monetary cost unless treatment is necessary . Most individual homeowners moving their own articles choose to self

inspect, to avoid delay s waiting for an inspector. Effects of the rule for entities in the newly regulated areas will depend on whether their sales occur largel y within or outside areas under quarantine. Most shipments of Christmas trees and nursery

products are within infested areas, while the majority of log shipment s are shipped to receiving mills in non

- infested areas. Entities moving logs that have compliance agreements areallowed to self

- certify directly on the way

bill that the articles have been inspected, helping to minimize quarantine costs with regard to the se items. When inspection reveals the presence of gy ps y moth, infested articles are returned to their origin, treated, or destroyed. Fumigation of infested Christmas trees or nursery stock can cost between $30 and $50 per shipment. Spraying for caterp illars and scraping of egg masses is the least costly

treatment for OHA ’ s and logs. The average cost of inspecting and removing an y life stages of gy

ps y moth is between $8 and $10 per shipment. The economic impact for affected entities in the newly quarantined areas will depend on the ty pe, number and size of entities regulated, levels of infestation, and the proportion of shipments to non

- regulated areas. Sales of nursery stock and Christmas trees in the newl y quarantined counties in 2007 were valued at $ 15.5 million, and represented about 3. 6 percent of the total value of such sales in the five States, and about 0.2 percent of national sales. 1 We provide here information on entities that may be affected in the newl y quarantined areas, b y State, and the quarantine

- related actions the entities have taken while under Federal Order. 2 Indiana There are 13 establishments engaged in the production and shipment of regulated articles in the newly

quarantined area (LaPorte Count y) in Indiana

. Of these, 10 are nurseries and 3 are Christmas tree growers. All shipments were under compliance agreement. About 300 acres of Christmas trees were treated at a cost of $6,000 (300 acres * $20 per acre)

.

1 Total sales of nursery stock and Christmas trees in the affected counties ($15.5 million) divided by the total for the five States ($465 million) and by the national total ($6,953 million). Source: USDA/NASS, 2007 Census of Agriculture, http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_2_County_Level/Ohio/st39_2_0 02_002.pdf

; http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_2_County_Level/Virginia/st51_ 2_002_002.pdf

). 2 The data were p rovided by respective State Plant Health Directors through Julie S. Spaulding, APHIS personal communication, November 2010.Maine There are between 65 and 115 loggers/shippers in affected areas of the newly quarantined counties (Penobscot, Piscataquis, and Somerset) and townships. 3 Some of the townships are located within State parks. These entities shipped 5,370 truckloads of logs in 2009. The logs do not need to be treated because they move either south within the generall y infested area or north to facilities that are under compliance agreement. There are no Christmas tree operators or commercial nurseries in the affected areas. Ohio In newl y quarantined Athens, Crawford, Marion and V inton counties in Ohio , there are 50 establishments that move regulated materials: 7 Christmas tree growers, 11 nurseries, and 32 loggers. These entities moved 15 truckloads of Christmas trees, 3,130 logs, and 55 shipments of nursery stock in 2009. Appro ximately 77 percent of logs and 20 percent of Christmas trees and nurseries were moved to non

- regulated areas. All of the logs were moved to facilities under compliance agreement and did not require treatment. Three shipments of Christmas trees and 8 shi pments of nurseries were sent to non

- regulated areas. Treatment costs ranged between $330 (11 shipments * $30 per shipment) and $550 (11 shipments * $50 per shipment). Additionally , 65 acres of Christmas trees were treated at a cost of $1,690 (65 acres * $26 per acre). Virginia There are 141 establishments engaged in the production and shipment of regulated articles in the newl y quarantined areas in Virginia. Of these, 28 are nurseries, 32 are Christmas tree growers and 81 are loggers/sawmills. There were 260 shipments of Christmas trees, 620 shipments of nursery

stock, and 1,100 shipments of logs in 2009. About 23 percent of the

3 The wide range in the reported number of entities is due to some of them not operating the entire year.shipments or 460 truckloads were to non

- regulated areas. All of the shipments were under

compliance agreement. West Virginia Regulated articles are not shipped from the affected areas of Fayette County to non
regulated areas. There were 8 Christmas tree farms with a total shipment of 5 truckloads in 2009. The count y includes a saw mill that is no longer operating an d a receiver mill from which logs are not shipped. Both of these enterprises were operating under compliance agreements. Wisconsin In Monroe and Iron counties, the Madeline Island area of Ashland Count y, and the Apostle I slands National Lakeshore (island units only) of the National Park Service, there are 20 Christmas tree growers and 3 nurseries. They shipped 13 truckloads of Christmas tree s and 39 truckloads of nursery

stock in 2009. All of the Christmas tree shipments were within the generall y infested areas. There are no nurseries or loggers in the affected areas. 

### Potential Impact on Small Entities The Small Business Administration (SBA) has established size standards based on the North American Industry Classification Sy stem (NAI CS) to determine which economic entities can be considered small entities. Potentially affected entities include sawmills, pulp mills, nursery and tree pr oduction farms, and nurseries and garden centers that move Christmas trees, nursery products, household products, and bark and bark products interstate from the newl y quarantined areas to non

- quarantined areas. The following information is from 2009. The SBA classifies nursery and tree production farms (floriculture, nursery , Christmas trees, etc.) categorized within NAI CS 111421 as small if their annual receipts are not more than$750,000. 4 There were a total of 42 Christmas tree farms and 49 nurseries in the affected areas

that are small entities, based on the SBA standard. Lo gging companies (NAICS 113310) are regarded as small if they employ 500 or fewer employees. There were between 196 and 246 loggers/shippers in the newly quarantined areas. 5 They shipped a total of 9,601 truckloads of logs of wood valued at $9.7 million. 6 All of these entities are considered small. Sawmills (NAI CS 321113) are regarded as small if they employ 500 or fewer employees, and pulp mills (NAICS 322110) are considered s mall if they employ 750 or fewer employees. There are no sawmills in the affected areas. 7 Nursery and garden centers (NAI CS 444220) are considered small if their annual sales are not more than $10 million. Numbers of garden centers in the newl y quarant ined areas are as follows, by

State: Indiana, 12; Maine, 8; Ohio, 11; Virginia, 19, and Wisconsin, 9. 8 For the United States overall, approximately 97 percent of nurseries and garden centers are considered to be small entities under the SBA’s standard. 9 T he requirements of this rule may cause a slight increase in costs for some of the affected entities, depending on the proportion of their sales made to buy ers in non

- quarantined areas. However, an y negative impacts that may be incurred because of the rule will be small, especially when compared to the harm to the forest industry and the U.S. econom y from further spread of

4 SBA, Small business Size Standards matched to North American Industry Classification System 2007, Effective August 22, 2008 (http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.html). 5 The wide range in the reported number of entities is due to some of them not operating the entire year. 6 Average sales ranged betw een $39,500 (9,601 * $1,020/196) and $49,570 (9,601 * $1,020/246). Mississippi State University Extension Service, http://msucares.com/forestry/economics/webster.html 7 http://www.census. gov/prod/ec02/ec0231awit.pdf

. 8 http://www.census.gov/econ/census02/guide/EC02_44.HTM . No garden centers in Fayette, West Virginia. 9 U.S. Census Bureau, 2007 Economic Census, Sector 44: EC0744SSSZ1: Retail Trade: Subject Series

- Estab & Firm Size : Summary Statistics by Sales Size of Establishments for the United States: 2007

.the gy

ps y moth. Regulated articles that meet quarantine requirements can continue to be sold in
non - quarantined areas. Impacts on pric es and competitiveness will be insignificant. Although the majorit y of affected establishments in the newl y quarantined areas are small entities, the effects of this rule on these businesses will be minor. The Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.