E6-8809. Citrus Canker; Compensation for Certified Citrus Nursery Stock

AGENCY:

Animal and Plant Health Inspection Service, USDA.

ACTION:

Interim rule and request for comments.

SUMMARY:

We are amending the citrus canker regulations to establish provisions under which eligible commercial citrus nurseries may, subject to the availability of appropriated funds, receive payments for certified citrus nursery stock destroyed to eradicate or control citrus canker. The payment of these funds will reduce the economic effects on commercial citrus nurseries that have had certified citrus nursery stock destroyed to control citrus canker.

DATES:

This interim rule is effective June 8, 2006. We will consider all comments that we receive on or before August 7, 2006.

ADDRESSES:

You may submit comments by either of the following methods:

Federal eRulemaking Portal: Go to http://www.regulations.gov and, in the lower “Search Regulations and Federal Actions” box, select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click on “Submit.” In the Docket ID column, select APHIS-2006-0033 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link.

Postal Mail/Commercial Delivery: Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0033, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0033.

Reading Room: You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call [phone] before coming.

Other Information: Additional information about APHIS and its programs is available on the Internet at http://www.aphis.usda.gov.

FOR FURTHER INFORMATION CONTACT:

Mr. Stephen R. Poe, Operations Officer, Program Support Staff, PPQ, APHIS, 4700 River Road Unit 36, Riverdale, MD 20737-1231; [phone].

SUPPLEMENTARY INFORMATION:

Background

Citrus canker is a plant disease that affects plants and plant parts, including fresh fruit, of citrus and citrus relatives (Family Rutaceae). Citrus canker can cause defoliation and other serious damage to the leaves and twigs of susceptible plants. It can also cause lesions on the fruit of infected plants, which render the fruit unmarketable, and cause infected fruit to drop from the trees before reaching maturity. The aggressive A (Asiatic) strain of citrus canker can infect susceptible plants rapidly and lead to extensive economic losses in commercial citrus-producing areas.

The regulations to prevent the interstate spread of citrus canker are contained in §§ 301.75-1 through 301.75-14 of “Subpart-Citrus Canker” in Title 7 of the Code of Federal Regulations. These regulations restrict the interstate movement of regulated articles from and through areas quarantined because of citrus canker and provide conditions under which regulated fruit may be moved into, through, and from quarantined areas for packing. These regulations were promulgated pursuant to the Plant Protection Act (7 U.S.C. 7701-7772).

The regulations in §§ 301.75-15 and 301.75-16 (referred to below as the regulations) of “Subpart-Citrus Canker” provide for compensation to owners of commercial citrus groves for losses due to citrus canker eradication activities under certain conditions. Section 301.75-15 addresses compensation for commercial citrus trees and § 301.75-16 focuses on compensation for the recovery of lost production income. These regulations were promulgated to implement the appropriations statutes enacted in 2000.

In February 2003, Congress appropriated funds “* * * to compensate commercial citrus and lime growers in the State of Florida for lost production with respect to trees removed to control citrus canker, and with respect to certified citrus nursery stocks within the citrus canker quarantine areas, as determined by the Secretary.” This appropriation and similar appropriations in 2004 and 2005 cover losses due to tree destruction occurring after September 30, 2001. The regulations currently cover compensation for losses of commercial citrus groves but do not address payments to commercial nurseries, since no appropriations acts prior to 2003 included these entities as eligible for payment. Therefore, we are amending the regulations to provide for the payment of compensation to commercial nurseries for losses of certified citrus nursery stock as described in the 2003, 2004, and 2005 appropriations statutes (Pub. L. 108-7, Pub. L. 108-199, and Pub. L. 108-447). The provisions for the nursery stock compensation program are contained in a new section, § 301.75-17, which is explained in detail below.

Definitions (§ 301.75-1)

We are amending § 301.75-1, which provides definitions for the terms used in the regulations, by adding new definitions for commercial citrus nursery and certified citrus nursery stock. We have also added new definitions for the various growth stages of plants covered by this rule, including definitions for seedlings, liner or rootstock, budded citrus nursery stock, budded field grown citrus plants, and budded container/greenhouse grown citrus plants. Each of these terms is used in the new § 301.75-17.

We have defined commercial citrus nursery as “an establishment engaged in, but not limited to, the production of certified citrus nursery stock, including plants for planting or replanting in commercial groves or for wholesale or retail sales.” We have defined certified citrus nursery stock as “citrus nursery stock, such as trees or plants, grown at a nursery that is in compliance with State certification requirements and approved for producing citrus nursery stock for commercial sale.” These definitions do not cover nurseries that were not registered with the State of Florida or for losses of citrus nursery stock that was not certified at the time of the State ordered destruction because of citrus canker.

Budded citrus nursery stock is defined as “liners or rootstock citrus plants that have been grafted with a portion of a stem or branch with a vegetative bud (also known as budwood) that are maintained 1 month after grafting or until the plant reaches marketability.”

The term budded container/greenhouse grown citrus plants is defined as “individual, budded citrus nursery stock maintained in climate-controlled green houses in 4-or 6-inch diameter pots until it is sold for commercial use.” The term budded field grown citrus plants is defined as “individual, budded citrus nursery stock maintained in the fields until it is sold for commercial use.”

We have defined liner or rootstock as “culled seedlings in the growing stage prior to the budding process.” Finally, the term seedlings is defined as “certified citrus seeds densely planted in seed beds and allowed to germinate and grow until their viability as liners or rootstock can be assessed.”

Funds for the Replacement of Certified Citrus Nursery Stock

The introductory text of § 301.75-17 provides that the payment of funds for certified citrus nursery stock compensation is contingent upon the availability of funds appropriated by Congress for that purpose. The funding for the certified nursery stock replacement payments provided for by this rule comes from the consolidated appropriations acts from 2003 to 2005. Each of these acts direct the Secretary of Agriculture to use a specified amount of money, $18.2 million in 2003, $10 million in 2004, and $30 million in 2005, from the Commodity Credit Corporation (CCC) funds to pay for tree replacement and lost production with respect to trees removed to control citrus canker and for certified citrus nursery stock destroyed after September 30, 2001, with the distribution of funding to be determined by the Secretary.

Under the existing compensation program for tree replacement and lost production, applications have been considered and payments made in “IFO order,” i.e., based on the date the immediate final order (IFO) was issued directing the destruction of trees in a claimant's grove. Because there have been no provisions in the regulations for the payment of claims for certified nursery stock, some grove claims based on IFOs issued later than IFOs issued for certified nursery stock have been paid. Any remaining unpaid nursery claims, whose IFO dates have not yet been reached for payments, will be folded into the current payment recipient list to make a combined, chronological payment list that covers payments to both groves and nurseries. These recipients will receive funds when and if more money is appropriated by Congress. We welcome any comments on the most appropriate method of distributing benefits should available funding be less than total needs or claims in a future situation (i.e., any situation involving compensation, not just with respect to citrus canker). Alternatives include, but are not limited to, the proration of available resources to all claimants and “first come, first served,” in which claimants are paid in full based on when their claims were submitted.

Eligibility

Under paragraph (a) of new § 301.75-17, a commercial citrus nursery may be eligible to receive funds to compensate for lost certified citrus nursery stock if the nursery stock was destroyed pursuant to a public order after September 30, 2001, as directed by Congress in the appropriations acts cited above, and before January 10, 2006, which is the date that the Department announced its determination that the established eradication program was no longer a scientifically feasible option to address citrus canker. Prior to the effective date of this interim rule, no provision had been made to compensate commercial citrus nurseries for certified nursery stock destroyed due to citrus canker.

Payments for Certified Nursery Stock

The State of Florida has determined that certified citrus nursery stock infected with or exposed to citrus canker, because of the destructive nature of the disease, has no value. This is based on the fact that the State prohibits the planting of any nursery stock that is infected with citrus canker or that is present in a nursery where citrus canker has been found. In order to prevent the spread of citrus canker through the movement of nursery stock, when citrus canker is found in a commercial citrus nursery the State takes regulatory action to prevent the movement of any host plants from the nursery. The State also issues an IFO specifying what citrus plant material is required to be destroyed. Thus, the certified nursery stock compensation payments provided for by this interim rule are intended to compensate nurseries for the value lost from certified nursery stock destroyed because of citrus canker. In calculating the compensation rates for commercial citrus nursery stock, we considered the actual value of the nursery stock destroyed. However, the current regulations cap the cost of replacing a commercial citrus tree at $26. This number was determined while developing the Florida Fruit Tree Pilot Crop Insurance Program, which includes coverage for the loss of commercial citrus trees due to citrus canker. Under this program, the U.S. Department of Agriculture's (USDA's) Risk Management Agency (RMA) calculated the cost of replacing commercial citrus trees to be $26 per tree, which was confirmed by industry sources as the cost of replanting commercial citrus trees. We have determined that, based on the values set by RMA, we will not make payments for nursery stock higher than the maximum currently provided in the RMA crop insurance program. The amounts to be paid for destroyed certified citrus nursery stock, which are discussed in greater detail in the economic analysis prepared for this rule (see “Executive Order 12866 and Regulatory Flexibility Act” below), are as follows:

Type of certified nursery stock	Payment (dollars)
Seedlings	0.18/plant.
Liners or rootstock	1.50/plant.
Budded field grown citrus plants	4.00/plant.
Budded container/greenhouse citrus plants	4.50/plant.
Citrus nursery stock in containers for wholesale or retail sale:
1 gallon	5.00/container.
3 gallon	10.00/container.
5 gallon	15.00/container.
7 gallon	20.00/container.
Larger than 7 gallon	26.00/container.

How To Apply

Paragraph (c) of § 301.75-17 provides information on how to apply for compensation for lost citrus nursery stock. This paragraph states that the form necessary to apply for compensation funds may be obtained from any local citrus canker program office or from the USDA Citrus Canker Eradication Program office in Plantation, FL. Completed claim forms must be sent to the USDA Citrus Canker Eradication Program office in Miami, FL, which is where the records necessary to validate claims are located. When the completed application is submitted, it should be accompanied by a copy of the public order-typically an IFO-that directed the destruction of the certified nursery stock and its accompanying inventory that describes the number of plants and type of the certified nursery stock removed. If the certified nursery stock was planted in pots, the inventory should specify the size of the container. If the certified nursery stock was bare root plants or in a temporary container, the inventory should specify whether the plant was non-budded or budded. Claims for certified nursery stock will have to be received by the Animal and Plant Health Inspection Service (APHIS) within 60 days after the effective date of this rule.

Miscellaneous

The regulations in § 301.75-16(c) have referred to the “USDA Citrus Canker Project” and the “USDA Citrus Canker Eradication Project.” We are changing both of those references to the “USDA Citrus Canker Eradication Program” for consistency.

Immediate Action

We believe that immediate action will reduce the economic effect on affected commercial citrus nurseries resulting from the destruction of certified citrus nursery stock due to citrus canker, thus ensuring the continued cooperation of commercial citrus nurseries with the survey and eradication activities that have been conducted by the State of Florida and APHIS and with any other program activity that may be established to manage citrus canker disease in the future. Under these circumstances, the Administrator has determined that there is good cause under 5 U.S.C. 553 for making this action effective less than 30 days after publication in the Federal Register.

We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the Federal Register. The document will include a discussion of any comments we receive and any amendments we are making to the rule.

Executive Order 12866 and Regulatory Flexibility Act

This rule has been reviewed under Executive Order 12866. The rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget.

This interim rule amends the citrus canker compensation regulations to establish provisions under which eligible commercial citrus nurseries may, subject to the availability of appropriated funds, receive payments for certified citrus nursery stock destroyed because of citrus canker. The payment of these funds will reduce the economic effects on commercial citrus nurseries that have had certified citrus nursery stock destroyed to control citrus canker.

For this rule, we have prepared an economic analysis. The economic analysis discusses the basis for the compensation rates and expected benefits and costs in accordance with requirements of the Office of Management and Budget for regulatory analysis and includes an initial regulatory flexibility analysis examining the potential economic effects of this rule on small entities, as required under 5 U.S.C. 603. The economic analysis is summarized below. Copies of the full analysis are available on the Regulations.gov Web site (see ADDRESSES above for instructions for accessing Regulations.gov) and may be obtained from the person listed under FOR FURTHER INFORMATION CONTACT.

This interim rule sets forth the compensation rates that will be used to pay commercial citrus nurseries in quarantined areas for certified citrus nursery stock destroyed due to citrus canker, in accordance with 2003, 2004, and 2005 appropriations statutes (Pub. L. 108-7, Pub. L. 108-199, and Pub. L. 108-447). Specified amounts of CCC funds are specified for tree replacement and lost production with respect to trees removed to control citrus canker and for certified citrus nursery stock destroyed after September 30, 2001: $18.2 million in 2003, $10 million in 2004, and $30 million in 2005. Affected commercial citrus nurseries have not yet been compensated from these appropriated funds.

The decision to pay compensation is implicitly guided by certain economic principles that center on the concept of externality. An externality occurs when one party's actions impose uncompensated benefits or costs on another party. Compensation of affected commercial citrus nurseries is in response to losses caused by the citrus canker emergency action. Destruction of nursery stock because of citrus canker lessens the risk of greater losses through disease spread.

Compensation of losses of citrus stock intended for residential use, including stock that would have been sold to retail outlets, will be compensated by container size at the following rates:

Container size	Rate per plant
1 Gallon	$5
3 Gallon	10
5 Gallon	15
7 Gallon	20
Larger than 7 gallon	26

These rates are based on prices shown in “Betrock's Plant Finder: Wholesale Guide to Foliage and Ornamental Plants, Sept. 15, 2003.” Citrus trees intended for residential use are selected from budded citrus nursery stock, and are often the more vigorous trees that stand out from the rest. They are containerized and cared for over an extended period of time. As such, the additional cost of materials and labor devoted to their care increases the value of these citrus trees.

The rate established in § 301.75-15 of the regulations for tree replacement is $26 for replacement of mature, productive trees. Compensation for nursery plants will not exceed this rate.

The economic costs associated with endemic citrus canker include adverse production, marketing, and trade impacts. The citrus canker eradication program was established to prevent further spread of the disease in an attempt to prevent increased prices, reduced yields, increased production costs, and loss of market access. Benefits of the eradication program were derived from the prevention or mitigation of these adverse impacts. Costs to society of compensating affected commercial citrus nurseries are the appropriated public funds that are thereby unavailable for other public uses and programs.

The small business size standard for nurseries identified by the Small Business Administration, based upon the North American Industry Classification System (NAICS) code 111422 (nursery and tree production), is $750,000 or less in annual receipts. Of the 1,360 nursery operators in Florida in 2003, 57 were producers of fruit and nut plants. The fruit and nut plant category includes growers of citrus nursery stock. The number of fruit-and-nut nurseries that sell citrus stock is not known.

The average size of affected commercial citrus nurseries is also unknown. It is reasonable to assume that most are small since 88 percent of all nursery operations in Florida are considered to be small entities. Of the commercial citrus nurseries, only those located within citrus canker quarantined areas that experienced losses related to the eradication program would qualify for compensation—a relatively small subset of Florida's nurseries. Affected commercial citrus nurseries selling to commercial growers or to retail outlets will be eligible for compensation. APHIS welcomes information that the public may provide regarding the number and size of nursery operations that will be affected by this rule.

Alternatives to this rule would be to not provide rates for the compensation of affected nurseries (status quo), or provide rates other than those set forth in the interim rule. The first alternative was not chosen because the Secretary has determined that compensation should be provided in order to reduce the economic effects on those commercial citrus nurseries that have had nursery stock destroyed to control citrus canker. Compensation rates need to be established so that the appropriated funds can be disbursed.

With respect to alternative compensation rates, the rates set forth in this interim rule are based on market prices. We invite public comment on those rates, including comment on expected impacts on small entities. Comments suggesting changes to the intended compensation rates should be supported by an explanation of why the changes should be considered.

This rule contains certain reporting and recordkeeping requirements (see “Paperwork Reduction Act” below).

Executive Order 12372

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local elected officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

Paperwork Reduction Act

In accordance with section 3507(j) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection and recordkeeping requirements included in this interim rule have been submitted for emergency approval to the Office of Management and Budget (OMB). When OMB notifies us of its decision, we will publish a document in the Federal Register providing notice of the assigned OMB control number.

This rule amends the citrus canker regulations to establish provisions under which commercial citrus nurseries may be eligible to receive funds to replace certified citrus nursery stock removed to control citrus canker. Implementing this program will necessitate the use of an information collection activity in the form of an application for funds. The completed application should be accompanied by a copy of the public order directing the destruction of the trees and its accompanying inventory that describes the number and type of the certified nursery stock removed.

We plan to request continuation of the emergency approval for 3 years. Please send written comments on the 3-year approval request to the following addresses: (1) Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503; and (2) Docket No. APHIS-2006-0033, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comments refer to Docket No. APHIS-2006-0033 and send your comments within 60 days of publication of this rule. These comments will help us:

(1) Evaluate whether the information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;

(2) Evaluate the accuracy of our estimate of the burden of the information collection, including the validity of the methodology and assumptions used;

(3) Enhance the quality, utility, and clarity of the information to be collected; and

(4) Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses).

Estimate of burden: Public reporting burden for this collection of information is estimated to average 0.16 hours per response.

Respondents: Eligible commercial citrus nursery owners in Florida.

Estimated annual number of respondents: 12.

Estimated annual number of responses per respondent: 1.

Estimated annual number of responses: 12.

Estimated total annual burden on respondents: 2 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.)

Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at [phone].

Government Paperwork Elimination Act Compliance

The Animal and Plant Health Inspection Service is committed to compliance with the Government Paperwork Elimination Act (GPEA), which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. For information pertinent to GPEA compliance related to this interim rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at [phone].

List of Subjects in 7 CFR Part 301

• Agricultural commodities
• Plant diseases and pests
• Quarantine
• Reporting and recordkeeping requirements
• Transportation

Accordingly, we are amending 7 CFR part 301 to read as follows:

PART 301—DOMESTIC QUARANTINE NOTICES

1. The authority citation for part 301 is revised to read as follows:

Authority: 7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3.

Section 301.75-15 issued under Sec. 204, Title II, Public Law 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 issued under Sec. 203, Title II, Public Law 106-224, 114 Stat. 400 (7 U.S.C. 1421 note).

2. Section 301.75-1 is amended by adding, in alphabetical order, definitions of budded citrus nursery stock, budded container/greenhouse grown citrus plants, budded field grown citrus plants, certified citrus nursery stock, commercial citrus nursery, liner or rootstock, and seedlings to read as follows:

§ 301.75-1

Definitions.

* * * * *

Budded citrus nursery stock. Liners or rootstock citrus plants that have been grafted with a portion of a stem or branch with a vegetative bud (also known as budwood) that are maintained 1 month after grafting or until the plant reaches marketability.

Budded container/greenhouse grown citrus plants. Individual, budded citrus nursery stock maintained in climate-controlled greenhouses in 4-or 6-inch diameter pots until it is sold for commercial use.

Budded field grown citrus plants. Individual, budded citrus nursery stock maintained in the fields until it is sold for commercial use.

* * * * *

Certified citrus nursery stock. Citrus nursery stock, such as trees or plants, grown at a nursery that is in compliance with State certification requirements and approved for producing citrus nursery stock for commercial sale.

* * * * *

Commercial citrus nursery. An establishment engaged in, but not limited to, the production of certified citrus nursery stock, including plants for planting or replanting in commercial groves or for wholesale or retail sales.

* * * * *

Liner or rootstock. Culled seedlings in the growing stage prior to the budding process.

* * * * *

Seedlings. Certified citrus seeds densely planted in seed beds and allowed to germinate and grow until their viability as liners or rootstock can be assessed.

* * * * *

§ 301.75-16

[Amended]

3. In § 301.75-16, paragraph (c) is amended by removing the words “Citrus Canker Project” and adding the words “Citrus Canker Eradication Program” in their place, and by removing the words “Project, Attn:” and by adding the words “Program, Attn:” in their place.

4. In Subpart—Citrus Canker, a new § 301.75-17 is added to read as follows:

§ 301.75-17

Funds for the replacement of certified citrus nursery stock.

Subject to the availability of appropriated funds, a commercial citrus nursery may be eligible to receive funds to replace certified citrus nursery stock in accordance with the provisions of this section.

(a) Eligibility. A commercial citrus nursery may be eligible to receive funds to replace certified citrus nursery stock removed to control citrus canker if the nursery stock was removed pursuant to a public order after September 30, 2001, and before January 10, 2006.

(b) Certified citrus nursery stock payments. A commercial citrus nursery that is eligible under paragraph (a) of this section to receive funds to replace certified citrus nursery stock will, upon approval of an application submitted in accordance with paragraph (c) of this section, receive a payment calculated using the following rates:

Type of certified nursery stock	Payment (dollars)
Seedlings	0.18/plant.
Liners or rootstock	1.50/plant.
Budded field grown citrus plants	4.00/plant.
Budded container/greenhouse citrus plants	4.50/plant.
Citrus nursery stock in containers for wholesale or retail sale:
1 gallon	5.00/container.
3 gallon	10.00/container.
5 gallon	15.00/container.
7 gallon	20.00/container.
Larger than 7 gallon	26.00/container.

(c) How to apply for certified nursery stock replacement funds. The form necessary to apply for funds to replace certified nursery stock may be obtained from any local citrus canker eradication program office in Florida, or from the USDA Citrus Canker Eradication Program, 6901 West Sunrise Boulevard, Plantation, FL 33313. The completed application should be accompanied by a copy of the public order directing the destruction of the trees and its accompanying inventory that describes the number and type of the certified nursery stock removed. If the certified nursery stock was planted in pots, the inventory should specify the size of the container. If the certified nursery stock was bare root plants or in a temporary container, the inventory should specify whether the plant was non-budded or budded. The completed application must be sent to the USDA Citrus Canker Eradication Program, Attn: Commercial Compensation, 10300 Sunset Dr., Suite 150, Miami, FL 33173. Claims for certified nursery stock must be received by August 7, 2006.

Done in Washington, DC, this 1st day of June 2006.

Charles D. Lambert,

Acting Under Secretary for Marketing and Regulatory Programs.