### United States

Department of Agriculture Anim al and Plant Health Inspection Service January 201 3 **Final Regulatory Flexibility Analysis**

**Final Rule**  **APHIS -**  **2010 -**  **0048 RIN 0579**  **- AD29**  **Citrus Canker, Citrus Greening, and Asian Citrus**  **Psyllid; Interstate Movement of Regulated Nursery Stock** 

Policy & Program Development Policy Analysis & Developmenti



### Summary Citrus canker, citrus greening, and ACP are among some of the most damaging citrus pests and diseases that have plagued the U.S. citrus industry . If their spread were not restricted, they would threaten the long

- term profitability and vitality

of the industry . The movement of infected citrus nursery

stock is a primary

means by

which these citrus pests an d diseases are newly introduced into citrus

- producing areas. In recent years, State and Federal regulatory measures have been implemented to mitigate the spread of these citrus pests to commercial citrus

- producing areas where they are not known to exist. Prior to an interim rule that we published in the Federal Register on April 27, 2011, the citrus canker and citrus greening regulations generally prohibited the interstate movement of regulated nursery

stock from areas quarantined for those diseases, with certain limited exceptions. Restrictions were also placed on the interstate movement of nursery stock from areas quarantined for ACP because it is a vector of the bacterial pathogen that causes citrus greening. On April 27, 2011, we published an interim r ule in the Federal Register that amended the regulations governing the interstate movement of regulated articles from areas quarantined for citrus canker, citrus greening, and/or Asian citrus psy llid (ACP) to allow the movement of regulated nursery

stock u nder a certificate to an y area within the United States. In order to be eligible to move regulated nursery stock, a nursery

had to enter into a compliance agreement with APHI S that specified the conditions under which the nursery stock must be grown, main tained, and shipped. The interim rule also amended the regulations that allow the movement of regulated nursery stock from an area quarantined for ACP, but not for citrusii

greening, to amend the existing regulatory requirements for the issuance of limited permits for the interstate movement of the nursery stock. The interim rule provided citrus nurseries in quarantined areas with access to previous unavailable markets throughout the United States. The majority of the citrus nurseries in quarantined areas w ere small entities. They benefitted from the rule by acquiring access to nationwide markets, although compliance costs may have reduced their competitiveness in comparison to suppliers of citrus nursery stock from non

- quarantined areas. This rule finalize s that interim rule with several nonsubstantive changes. These changes have the effect of removing a prohibition on the movement of regulated articles from areas quarantined onl y for ACP to the Northern Mariana Islands, which we have also quarantined for ACP. Operationally , this prohibition was removed when we imposed a quarantine for ACP on the Northern Mariana Islands, and we are not aware of an y movement of regulated articles from such quarantined areas to the Northern Mariana Islands since then. Bec ause the Northern Mariana Is lands are geographically isolated from most of the United States, the producers most likely to benefit from market access to the Northern Mariana Islands are producers in Guam, the closest U.S. commercial citrus

- producing area t hat is quarantined onl y for ACP to the Northern Mariana Islands.iii



### Contents Summary
................................ ................................ ................................ .............................. i Introduction

................................ ................................ ................................ ......................... 1 Need for and Objectives of the Rule

................................ ................................ ................... 2 Significant Issues raised by Public Comment in response to the Initial Regulatory Flexibility

Anal ys is

................................ ................................ ................................ ............. 3 Comments filed by

the Small Business Administration in response to the Proposed Rule 3 Potentially

Affected Small Entities

................................ ................................ ..................... 3 Projected Reporting, Recordkeeping, and Other Compliance Requirements

..................... 9 Steps taken by

APHI S to minimize Significant Economic Impacts on Small Entities

...... 91



### Introduction The U.S. citrus industry has been plagued b y numerous pests and diseases that, left uncontrolled, would threaten the long

- term profitability and vitality of the industry . Citrus canker , c itrus g reening, and the A sian citrus ps yl lid (A CP ) are among some of the most damaging of citrus pests and diseases and can cause significant agricultural losses. Citrus canker is a bacterial disease that causes lesions on the fruit of infected plants , making the fruit unmarketable. Italso results in defoliation and other serious damage to the l eaves and twigs of susceptible plants; infected fruit may drop from the trees before reaching maturity

. Citrus greening , also a bacterial disease, greatly reduces production and can eventually kill infected tree s . In areas of the world where citrus greening is endemic, the trees decline and die within a few ye ars. ACP ’s principal threat is as a vector for the bacterium that causes citrus greening, but it also damages citrus in nurseries and groves b y direct feeding. The movement of citrus nursery stock is a primary means by

which these pests and diseases can be introduced to previously unaffected citrus

- producing areas. I n recent y ears, State and Federal regulatory

measures have been implemented to mitigate the spread of these citrus pests . Along with these regulatory measures, the devastating impacts of these pests and the citrus industry ’s demand for pest
- free nursery stock have predicated significant changes in the way the industry

produces, maintains, and ships citrus nursery stock. Prior t o publication of the interim rule, regulations prohibited the interstate movement of regulated nursery

stock from areas quarantined for citrus canker (other than products for immediate export and kumquat plants, which have a natural resistance to citrus ca nker). Similarly , the regulations prohibited the interstate movement of regulated nursery stock from areas quarantined for citrus greening, unless the nursery stock was destined for immediate2

export. I nterstate movement of regulated nursery stock from ar eas quarantined for ACP, but not also quarantined for citrus greening or citrus canker, was allowed, provided that measures had been taken to kill or sterilize any ACP that may

be present. The interim rule provide d a degree of relief to citrus nursery stoc k producers in quarantined areas by

allowing them access to all domestic markets, while continuing to prevent the spread of these quarantine pests by the movement of affected nursery products

. The Regulatory

Flexibility

Act requires agencies to evaluate th e potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. This final regulatory flexibility

analy sis describes expected impacts of this rule on small entities, as required by s ecti on 60 4 of the Act. 

### Need for and Objectives of the Rule Prior to publication of the interim rule, quarantines for citrus canker, citrus greening, and ACP prohibited nearly

all interstate movement of citrus nursery stock. The comprehensive restrictions were sanctioned to mitigate agricultural losses from the spread of these pests into other citrus

- producing areas. APHIS recognize d the economic cost of these measures for producers in quarantined areas , and, i n consultation with States and the citrus nursery industry , developed a s ys tems approach to allow citrus nursery producers and handlers in quarantined areas to have access to nationwide markets while still providing for pest mitigation measures that suffic iently

safeguard against the spread of these pests
.3



### Significant Issues **raised by**  **Public Comment in response to**  **the Initial Regulatory Flexibility Analysis**
APHI S solicited comments concerning the April 2011 interim rule for a period of 60 day s ending on June 27, 2011. We received seven comments by that date, from nursery

stock producers and a State department of agriculture

. However, none of the comments received were in response to the Initial Regulatory Flexibility

Analy sis. 

### Comments filed **by the Small Business Administration in**  **response to the Interim**  **Rule**
APHI S did not receive any comments from the Small Business Administration in response to the interim rule. 

### Potentially **Affected Small Entities**  Citrus nurseries are categorized within the North American Industry Classification Sy stem (NAI CS) code 111421, Nursery and Tree Production. The Small Business Administration small

- entity standard for this industry is annual receipts of not more than $750, 000. While we do not have comprehensive and proprietary data on revenue earned specificall y b y citrus nurseries contained within this industry category , the average annual market value of products sold by NAICS 111421 enterprises in 2007 was less than $26 0,000, which is well within the small

- entity standard. 1

1 USDA NASS. 2007 Census of Agriculture, Table 46. http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1_046_046.pdf4

By narrowing the scope to available data on nursery production, we found t he gross value of sales of fruit and nut nursery plants in 2006 was $276 million

. 2 These revenues comprised 6 percent of earn ings b y all nurseries, and represented an increase of 28 percent over sales in 2003. In 2006, average gross sales by fruit and nut nurseries earning more than $100,000 was about $248,000 in Florida, and about $118,000 in Texas, further evidence that most entities that may be affected b y the rule in those two States are likely to be small entities. In 2007, Arizona and Louisiana did not have nurseries reporting more than $100,000 in earnings according to NASS data. Onl y in California did the average gross sales by fruit and nut nurseries earning more than $100,000 exceed the small

- entity standard, at roughly

$1.3 million. Again, however, these data are not specific to citrus stock nurseries. Alabama APHI S does not have information on the size distribution of affected nursery operations in Alabama, but, according to the 2007 Census of Agriculture , nearl y 91 percent of greenhouse, nursery , and floriculture operations (NAI CS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 3 Arizona APHI S identified 5 citrus nursery stock producers in the State of Arizona. All of these had annual sales of less than $750,000 during each of the last three ye ars, and are classified as small entities in accordance with the SBA’s small

- entity threshold of $750,000. 4 We have

2 USDA NASS. Nursery Crops, 2006 Summary. September 2007. Most recent data available at: http://usda.mannlib.cornell.edu/usda/current/NursProd/NursProd

- 09

- 26

- 2007.pdf 3 NASS, United States Department of Agriculture (USDA), “Alabama: State and County Da ta, Volume 1, Geographic Area Series, Part 1” 2007 Census of Agriculture , issued February 2009 and updated December 2009. 4 Source: Reporting State Official.5

determined that the majority of citrus production/nurseries are located within Yuma County , where areas are quarantined for ACP. California APHI S identified 354 licensed citrus nurs er y stock producers at 404 locations in the State of California. 5 APHI S does not have information on the size distribution of affected nursery operations in California, but, according to the 2007 Census of Agriculture , more than 85 percent of greenhouse, nursery , and floriculture operations (NAICS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 6 Furthermore, according to the most recent data available from the California Citrus Nursery Program, at least 57 percent of the 28 citrus nurseries that pay assessments have annual gross sales of citrus trees of less than $750,000. 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

. Florida APHI S identified 62 citrus nursery stock producers in the State of Florida. APHI S does not have information on the size distribution of affected nursery operations in Florida, but, according to the 2007 Census of Agriculture , more than 90 percen t of greenhouse, nursery , and

5 Source: Reporting State Official. 6 NASS, United States Department of Agriculture (USDA), “Cali fornia: State and County Data, Volume 1, Geographic Area Series, Part 5” 2007 Census of Agriculture , issued February 2009 and updated December 2009.6

floriculture operations (NAI CS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 7 All registered citrus nurseries in Florida are already in compliance with the final rule’s protocol, due to their compliance with the Florida Department of Agriculture and Consumer Services’ Division of Plant I ndustry Rule Chapter 5B

- 2. 8 While information on cash receipts by size of operation is not readily availab le, it is reasonable to assume that the majority of the citrus nurseries qualify

as small entities. Georgia APHI S does not have information on the size distribution of affected nursery operations in Georgia, but according to the 2007 Census of Agriculture , nearl y 94 percent of greenhouse, nursery , and floriculture operations (NAI CS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 9 Guam APHI S does not have information on the size distribution of affected nursery operations in Guam, but, according to the 2007 Census of Agriculture , the total industry value of nursery crops in 2007 was $604,868, which is below the SBA’s small

- entity thresho ld of $750,000. 10 Editorial changes that we are making to the interim rule in this final rule may benefit producers in Guam. The changes will have the effect of removing a prohibition on the movement of regulated articles from areas quarantined only for A CP to the Northern Mariana Islands, which we have also quarantined for ACP. Operationall y, this prohibition was removed

7 NASS, United States Department of Agriculture (USDA), “Florida: State and County Data, Volume 1, Geographic Area Series, Part 9” 2007 Census of Agriculture , issued February 2009 and updated December 2009. 8 Source: State Reporting Official. 9 NASS, United States Department of Agriculture (USDA), “Georgia: State and County Data, Volume 1, Geographic Area Se ries, Part 10” 2007 Census of Agriculture , issued February 2009 and updated December 2009. 10 NASS, United States Department of Agriculture (USDA), “Guam: Island Data, Volume 1, Geographic Area Series, Part 53” 2007 Census of Agriculture , issued February 2 009.7

when we imposed a quarantine for ACP on the Northern Mariana Islands, and we are not aware of an y movement of regulated articles from s uch quarantined areas to the Northern Mariana Islands since then. However, because the Northern Mariana Islands are geographically isolated from most of the United States, the producers most likely to benefit from market access to the Northern Mariana Is lands are producers in Guam, the closest commercial citrus

- producing area to the Northern Mariana Is lands. Hawaii APHI S does not have information on the size distribution of affected nursery operations in Hawaii, but, according to the 2007 Census of Ag riculture , nearl y 98 percent of greenhouse, nursery , and floriculture operations (NAI CS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 11 Louisiana APHI S identified 20 citrus nursery stock producers in the State of Louisiana. APHI S does not have information on the size distribution of affected nursery operations in L ouisiana, but, according to the 2007 Census of Agriculture , more than 96 percent of greenhouse, nursery , and flor iculture operations (NAICS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 12 In 2008, the majority

of the State’s citrus nursery stock production was located within Plaquemin es Parish, an area quarantined for ACP. 13 There were approximately 10 nurseries in

11 NASS, United States Department of Agriculture (USDA), “Hawaii: State and County Data, Volume 1, Geographic Area Series, Part 11” 2007 Census of Agriculture , issued February 2009 and updated December 2009. 12 NASS, United States Department of Agricul ture (USDA), “Louisiana: State and Parish Data, Volume 1, Geographic Area Series, Part 18” 2007 Census of Agriculture , issued February 2009 and updated December 2009. 13 Source: Louisiana Department of Agriculture and Forestry. Correspondence w ith APHIS, September 2008.8

this parish that altogether produced roughl y 350,000 to 400,000 trees per year. While information on cash receipts by size of operation is not readily available, it is reas onable to assume that a majorit y qualify as small entities. Moreover, approximately 60 to 70 percent of Louisiana’s citrus nursery stock is currentl y shipped interstate. Thus, it is reasonable to assume that a majority

of the affected small entities with in the State are alread y bearing compliance costs comparable to those associated with this final rule. Mississippi APHI S identified 5 citrus nursery stock producers in the State of Mississippi. We do not have information on the size distribution of affect ed nursery operations in Mississippi, but, according to the 2007 Census of Agriculture , nearly 99 percent of greenhouse, nursery , and floriculture operations (NAI CS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’ s small

- entity threshold of $750,000. 14 Puerto Rico APHI S identified 2 operations producing citrus nursery stock in the Commonwealth of Puerto Rico. 15 APHI S does not have information on the size distribution of affected nursery operations in Puerto Rico, but, according to the 2007 Census of Agriculture , average annual sales of greenhouse, nursery , and floriculture operations (NAICS 1114) in Puerto Rico in 2007 were less than $100,000, which is below the SBA’s small

- entity threshold of $750,000. 16 South Carolina

14 NASS, United States Department of Agriculture (USDA), “Mississippi: State and County Data, Volume 1, Geographic Area Series, Part 24” 2007 Census of Agriculture , issued February 2009 and updated December 2009. 15 Source: Reporting State Official. 16 NASS, United States Department of Agriculture (USDA), “Puerto Rico: Island and Municipio Data, Volume 1, Geographic Area Series, Part 52” 2007 Census of Agriculture , issued February 2009 and updated December 2009.9

APHI S identified 2 citrus nursery stock producers in the State of South Carolina. 17 APHI S does not have information on the size distribution of affected nursery operations in South Carolina, but, according to the 2007 Census of Agriculture , nearl y 96 percent of greenhouse, nursery , and floriculture operations (NAI CS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 18 Texas APHI S identified 72 citrus nursery stock producers in the State of Texas. APHI S does not have information on the size distribution of affected nursery operations in Texas, but, according to the 2007 Census of Agriculture , more than 93 percent of greenhouse, nursery , and floriculture operations (NAI CS 1114) in that State had annual sales in 2007 of less than $500,000, which is below the SBA’s small

- entity threshold of $750,000. 19 

### Projected Reporting, **Recordkeeping, and Other**  **Compliance Requirement**  **s** The reporting and recordkeeping requirements associated with the final rule are identical to those of the interim rule. Those requirements were approved b y the Office of Management and Budget under control number 0579

- 0369. 

### Steps taken by APHIS to minimize Significant Economic **Impact s**  **on Small Entities**

17 Source: State Reporting Off icial. 18 NASS, United States Department of Agriculture (USDA), “South Carolina: State and County Data, Volume 1, Geographic Area Series, Part 40” 2007 Census of Agriculture , issued February 2009 and updated December 2009. 19 NASS, United States Department of Agriculture (USDA), “Texas: State and County Data, Volume 1, Geographic Area Series, Part 43A” 2007 Census of Agriculture , issued February 2009 and updated December 2009.10

Based on our review of available information, APH IS does not expect the rule to have a significant economic impact on small entities. In the absence of si gnificant economic impacts, we have not identified alternatives that would minimize such impacts.