SUPPLEMENTARY INFORMATION:

Background

Under the Plant Protection Act (7 U.S.C. 7701 et seq.), the Secretary of Agriculture is authorized to take such actions as may be necessary to prevent the introduction and spread of plant pests and noxious weeds within the United States. The Secretary has delegated this authority to the Administrator of the Animal and Plant Health Inspection Service (APHIS) within the U.S. Department of Agriculture (USDA).

Pursuant to the regulations in 7 CFR part 319, APHIS prohibits or restricts the importation of plants and plant products into the United States to prevent the introduction of plant pests that are not already established in the United States or plant pests that may be established but are under official control.

The regulations in Subpart P—Cut Flowers, §§ 319.74-1 through 319.74-4 (referred to below as the regulations), govern the importation of cut flowers into the United States. Section 319.74-2 of the regulations contains conditions governing the importation of fresh cut flowers. Paragraph (a) provides that all imported cut flowers are subject to inspection at ports of entry into the United States, while paragraph (b) describes, in general terms, actions that APHIS may require if cut flowers are found during the inspection to be infested with a plant pest.

Paragraphs (c) and (d) of § 319.74-2 contain requirements regarding specific types of cut flowers. Paragraph (c) provides that any cut flower found upon inspection to be infested with agromyzids (leaf-miners) must be fumigated with methyl bromide in accordance with 7 CFR part 305, which contains our phytosanitary treatment regulations. Paragraph (d) lists the cut flowers of the genera Chrysanthemum, Leucanthemella, and Nipponanthemum that are considered to be hosts of chrysanthemum white rust ( Puccinia horiana P. Henn., CWR) and countries in which CWR is known to exist. It explains that in order for any of these cut flowers to be imported into the United States, they must be grown in a place of production that is registered with the national plant protection organization (NPPO) of the respective country and that is subject to inspection by an APHIS-approved inspector; must be accompanied by a phytosanitary certification or equivalent documentation issued by the NPPO of the exporting country or their designee with an additional declaration that the place of production and the consignment itself were inspected and found free of CWR; and must have the identity of the registered production site marked on their box as well as other shipping documents that accompany the cut flowers.

On April 17, 2023, we published in the Federal Register a proposed rule (88 FR 23365-23368, Docket No. APHIS-2019-0024) ^[1] to amend the regulations governing the importation of fresh cut flowers to remove requirements for the importation of specific types of cut flowers from the regulations, and to list them in the U.S. Department of Agriculture database called the Agricultural Commodity Import Requirements (ACIR) database instead. We also proposed a notice-based, streamlined approach to update the import requirements for fresh cut flowers.

We also proposed to remove entirely any restrictions on the importation of fresh cut flowers of the genera Chrysanthemum, Leucanthemella, and Nipponanthemum from countries in which CWR is known to exist. We proposed to relieve such restrictions based on an economic evaluation analysis, titled “Economic Evaluation of the Regulatory Policy for Chrysanthemum White Rust (CWR) ( Puccinia horiana Henn.) in the United States,” which we made available for public comment along with the proposed rule. (The EE was initially completed in 2019; however, APHIS reviewed the document in September 2026 and confirmed that the 2019 data analyzed remains accurate.) Through the EE, APHIS determined that the United States eradication policy for CWR is no longer technically and economically justified. Specifically, APHIS found that efforts to eradicate CWR are costly because the pathogen can overwinter and survive in dormant below-ground parts, with a latency of expression. Additionally, APHIS found that fungicides are available and provide growers with a compliance alternative at a fraction of the cost of the value of a chrysanthemum plant. To that end, APHIS determined that CWR is no longer considered a pest of quarantine ( printed page 64254) significance and should be moved to a management phase. We also proposed adding two definitions to the regulations, for “ACIR” and “quarantine pest.”

We solicited comments concerning our proposal for 60 days ending June 16, 2023.

APHIS received 21 comments by that date. They were from flower importers, exporters, distributors, breeders, shippers, flower industry trade groups, and government agencies.

Of the 21 comments received, 20 supported the rule, while one additional commenter registered no comment or concern. Several technical clarifications were requested, however. The comments received are discussed below.

A commenter requested an explanation of the differences and advantages of the notice-based process.

The essential difference in the notice-based process as opposed to the rulemaking process is that it can take less time. As indicated in the economic analysis that accompanied the proposed rule, we estimated that the time savings this double-notice process affords may range from 6 months to 2 1/2 years. We based this on comparable estimates in a prior rulemaking (“Establishing a Performance Standard for Authorizing the Importation and Interstate Movement of Fruits and Vegetables,” 83 FR 46627-46639, Docket No. APHIS-2010-0082) that established a similar notice-based process for the importation of all fruits and vegetables, as well as their interstate movement from Hawaii and the territories. Before that final rule, the rulemaking process for importation into the United States and interstate movement from Hawaii and the U.S. territories of fruits and vegetables took anywhere from 18 months to upward of 3 years. At the time, we estimated that the rule would reduce the administrative process needed for approval of these fruits and vegetables to 6 to 12 months. The current rulemaking process for fresh cut flowers is like the former rulemaking process for fruits and vegetables, and the notice-based process for fresh cut flowers would be substantively similar to that of the double-notice process for the importation of fruits and vegetables. Accordingly, the time savings are expected to be similar for fresh cut flowers. We will continue to prepare scientific documentation as necessary with the same rigor we have always exercised. We will provide that same level of scientific documentation for review and comment in the notice-based process. As noted by a separate commenter on the proposed rule, an advantage of this notice-based process is that it will allow APHIS to respond to market access requests for cut flowers more efficiently and thus make our import requirements more responsive to changes in pest risk.

In proposed paragraph (d)(2) in § 319.74-2, we proposed that if APHIS determines that the requirements for the importation of a specific type of cut flower are no longer sufficient to reasonably mitigate the pest risk posed by the cut flower, we would prohibit or further restrict importation of the cut flower. We would subsequently publish a notice in the Federal Register advising the public of our findings. The notice would specify the amended importation requirements, provide an effective date for the change, and invite public comment on the subject.

A commenter asked whether there would be a public consultation period for submitting technical comments, and how long the comment period would be if there was.

As noted in the proposed rule, there will be a comment period for such notices during which technical comments may be submitted. While we did not specify its duration in the proposed rule for the process for adding restrictions, the comment period will be a minimum of 60 days for the double-notice process both to remove, or relax, restrictions as well as for the double-notice process to add restrictions. We have clarified this in the regulatory text of this final rule.

The same commenter asked us whether we were proposing to change any of the requirements currently found in paragraph (c) of 319.74-2 by removing them from the regulations and including them in the Agricultural Commodity Import Requirements (ACIR) database.

The only changes to the import requirements for fresh cut flowers that will occur as a result of this rule are that the CWR requirements are being removed. All other import requirements for fresh cut flowers will remain unchanged.

Finally, in preparing the final rule, we noticed that the definition of “USDA Agricultural Commodity Import Requirements database” contained a reference to USDA-APHIS offices in Riverdale, MD. That office has since closed and been relocated to Beltsville, MD. We have updated the definition to reflect this relocation.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule with the changes discussed above.

Executive Orders 12866 and 14192, and Regulatory Flexibility Act

This final rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with the Regulatory Flexibility Act, we have analyzed the potential economic effects of this action on small entities. The analysis is summarized below. Copies of the full analysis are available on the Regulations.gov website (see footnote 1 in this document for a link to Regulations.gov) or by contacting the person listed under FOR FURTHER INFORMATION CONTACT or on the Regulations.gov website. Based on the conclusions of the analysis, the action is considered deregulatory under Executive Order 14192.

We are advising the public of our decision to deregulate Chrysanthemum White Rust (CWR) and authorize the importation of Chrysanthemum spp. fresh cut flowers and synonymous genera of cut flowers from certain countries into the continental United States. Based on findings of an economic evaluation, which we made available to the public for review and comment through a previous proposed rule, we have determined that CWR should no longer be considered to be of quarantine significance.

The final rule will remove Chrysanthemum White Rust-specific restrictions on fresh cut flower imports and transition the fresh cut flower regulations to a notice-based process for communicating changes in import requirements. Notices will communicate changes to import requirements based on pest risk. Stakeholders will have the opportunity to comment on notices. The only direct economic impacts associated with this rule are to fresh cut flowers that serve as hosts for the CWR fungus.

We estimate that the time savings afforded by this rule may range from 6 months to 2 1/2 years per notice, relative to the status quo. We based this on comparable estimates in a prior rulemaking (“Establishing a Performance Standard for Authorizing the Importation and Interstate Movement of Fruits and Vegetables,” 83 FR 46627-46639, Docket No. APHIS-2010-0082) that established a similar notice-based process for the importation of all fruits and vegetables, as well as their interstate movement from Hawaii and the territories. Before that final rule, the rulemaking process for importation into the United States and interstate movement from Hawaii and the U.S. territories of fruits and vegetables took ( printed page 64255) anywhere from 18 months to upward of 3 years. At the time, we estimated that the rule would reduce the administrative process needed for approval of these fruits and vegetables to 6 to 12 months. The current rulemaking process for cut flowers is like the former rulemaking process for fruits and vegetables, and the notice-based process will be substantively similar to that of the double-notice process for the importation of fruits and vegetables. Accordingly, the time savings are expected to be similar for cut flowers.

The Regulatory Flexibility Act requires that agencies specifically consider the economic effects their rules have on small entities as established by the Small Business Administration (SBA) and based on the North American Industry Classification System (NAICS) size standards economic entities. According to the SBA, entities involved in Floriculture Production (NAICS 111422) with $3.75 million or less in annual receipts are classified as small entities.

Based on NASS data, in 2023, there were approximately 10,216 operations, responsible for producing around $6.68 billion total in sales. Of the producers in the floriculture category, a little more than 1,396 operations had sales of $500,000 or more. Thus, at least 86 percent of all floriculture operations can be classified as small entities. The percentage of small entities is likely higher given entities with $500,000 or more in sales is last value breakout.

The only direct economic impacts associated with this rule are to fresh cut flowers that serve as hosts for the CWR fungus. Of the approximately 423 operations engaged in cut flower production, which is a subcategory of the floriculture industry, there are only about 20 chrysanthemum (pompoms) operations. The value of the cut flower category was about $349.9 million in 2023, while that of chrysanthemums (pompoms) was around $1.6 million (less than 1 percent of the total cut flower value), implying that most chrysanthemum producers are small entities.

Marketing channels for cut flowers have become increasingly complex. While most fresh cut flowers move through the traditional marketing channel from growers to wholesalers then to retailers and finally to consumers, the route to the final consumer is no longer as well defined. Some producers sell directly to retailers or consumers and some wholesalers and retailers act as brokers or importers. Because in large part the production of fresh cut flowers for the U.S. market has shifted overseas, some importers are fulfilling the traditional wholesaler's role of aggregating and assembling offshore production and selling directly to retail outlets.

Some large U.S. retailers work directly with brokers who get foreign producers to meet the retailers' specific requirements. Vertical integration and consolidation has led to the roles becoming less well-defined. Retail marketing of fresh cut flowers has shifted from a large number of small, independent retail florists to florist chains and mass market retailers with garden centers. The entrance of mass merchandisers, or “big box” stores, to the distribution of fresh cut flowers, as well as other garden products, has greatly influenced the change in marketing practices in the industry.

Based on the NAICS code, there are approximately 6,162 business entities classified as Flower, Nursery Stock, and Florists' Supplies Merchant Wholesalers (424930). This category is comprised of establishments that are primarily engaged in the merchant wholesale distribution of flowers, florists' supplies, and/or nursery stock (except plant seeds and plant bulbs). One role of operations in this category is the distribution of cut flowers imported to the United States, including chrysanthemums (pompoms). The small-entity standard for these operations is not sales revenue, but whether they have 100 or more employees. Available data on U.S. importers of floriculture products, particularly cut flowers of a specific type, is sparse. According to 2022 Economic Census, only 105 entities in this industry category had 100 or more employees, or less than two percent of the industry, thus the majority of entities (98%) are considered small by SBA standards.

The final rule removes CWR-specific import restrictions only for fresh cut flowers which are susceptible to CWR, namely chrysanthemums. While this rule may enable foreign producers to send a greater quantity of chrysanthemums to the United States, it is doubtful that the quantity will be large enough to affect chrysanthemum prices or alter demand, as imports are already allowed (albeit with a phytosanitary certificate and/or equivalent documentation). Colombia already dominates this import category, with over 98 percent of the chrysanthemum.

The final rule will not lessen market pressure for domestic producers that already exist, but neither should it exacerbate it. In addition, retailers and wholesalers should not be adversely impacted by the rule as these entities may acquire additional suppliers of quality pompoms. Consumers may benefit from a more stable supply of cut chrysanthemums. While the rule may enable countries to export more cut chrysanthemums to the United States, the rule should neither encourage nor entice a significant increase of imports as imports have already been occurring, subject to CWR-specific restrictions, for several years and markets have had time to establish. However, in the absence of reliable price and quantity data, the impact of the rule is difficult to estimate. Producers and consumers should not be adversely impacted based on historical imports that are already taking place. Affected entities may also face increased competition from having the product available sooner.

It is not known how sensitive U.S chrysanthemum prices are to changes in the quantity imported. There is little information with which to quantify the impact of a potential increase in cut chrysanthemum imports on prices, but we assume demand will remain relatively unchanged and the rule will not adversely impact producers, wholesalers, or retailers.

Executive Order 12988

This final 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(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the reporting and recordkeeping requirements included in this final rule are approved by the Office of Management and Budget (OMB) under OMB control number 0579-0049.

Accordingly, we are amending 7 CFR part 319 as follows: