[Federal Register: January 16, 2004 (Volume 69, Number 11)]
[Rules and Regulations]               
[Page 2481-2491]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16ja04-1]                         


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Rules and Regulations
                                                Federal Register
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[[Page 2481]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 319

[Docket No. 98-103-5]

 
Importation of Artificially Dwarfed Plants in Growing Media from 
the People's Republic of China

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are amending the regulations governing the importation of 
plants and plant products to add artificially dwarfed (penjing) plants 
of the species Buxus sinica, Ehretia microphylla, Podocarpus 
macrophyllus, Sageretia thea, and Serissa foetida from the People's 
Republic of China to the list of plants that may be imported in an 
approved growing medium subject to specified growing, inspection, and 
certification requirements. We are taking this action in response to a 
request by the Government of China and after determining that the 
penjing plants established in growing media can be imported without 
resulting in the introduction into the United States or the 
dissemination within the United States of a plant pest or noxious weed. 
This rule will relieve restrictions that currently allow these species 
to be imported only as bare-rooted plants.

EFFECTIVE DATE: February 17, 2004.

FOR FURTHER INFORMATION CONTACT: Mr. William Thomas, Import Specialist, 
Phytosanitary Issues Management Team, PPQ, APHIS, 4700 River Road, Unit 
140, Riverdale, MD 20737-1236; (301) 734-6799.

SUPPLEMENTARY INFORMATION:

Background

    On September 20, 2000, we published in the Federal Register (65 FR 
56803-56806, Docket No. 98-103-1) a proposal to amend the regulations 
governing the importation of plants and plant products to allow 
artificially dwarfed plants (penjing) of the genera Buxus, Ehretia 
(Carmona), Podcarpus, Sageretia, and Serissa to be imported into the 
United States from the People's Republic of China in an approved 
growing medium subject to specified growing, inspection, and 
certification requirements. We proposed this action after assessing the 
pest risks associated with the importation of penjing established in 
growing media from the People's Republic of China under the conditions 
outlined in the proposed rule and determining that those plants could 
be imported into the United States without presenting a significant 
risk of introducing or disseminating dangerous plant pests. We 
solicited comments regarding the proposed rule for 60 days, ending 
November 20, 2000. We subsequently extended the comment period until 
December 20, 2000 (see 65 FR 75187, Docket No. 98-103-2, published on 
December 1, 2000).
    In response to comments received on the proposed rule (discussed in 
detail later in this document), the Animal and Plant Health Inspection 
Service (APHIS) narrowed the application of the rule to five species of 
plants (Buxus sinica, Sageretia thea, Serissa foetida, Podcarpus 
macrophyllus, and Ehretia microphylla) from China and entered into 
consultation with the U.S. Fish and Wildlife Service (FWS) to assess 
the potential effects of the proposed action on endangered or 
threatened species, as required under section 7 of the Endangered 
Species Act of 1973, as amended (16 U.S.C. 1531 et seq.). On April 10, 
2003, FWS concluded the section 7 consultation process by concurring 
with APHIS's determination that the importation of penjing plants from 
China in growing media will not adversely affect federally listed or 
proposed endangered or threatened species or their habitats. The 
section 7 consultation for this rule is described later in this 
document.
    Upon receiving concurrence from FWS, APHIS completed an 
environmental assessment in accordance with: (1) The National 
Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et 
seq.), (2) regulations of the Council on Environmental Quality for 
implementing the procedural provisions of NEPA (40 CFR parts 1500-
1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) 
APHIS's NEPA Implementing Procedures (7 CFR part 372). On September 15, 
2003, we published in the Federal Register (68 FR 53956-53957, Docket 
No. 98-103-3) a notice announcing the availability of the environmental 
assessment, and solicited comments on the environmental assessment for 
30 days ending October 15, 2003. On October 28, 2003, we published in 
the Federal Register (68 FR 61391-61392, Docket No. 98-103-4) another 
notice that extended the comment period on the environmental assessment 
for an additional 15 days ending November 12, 2003.

Risk Assessments and Risk Management Analysis

    The risk assessments that supported our proposed rule (referred to 
elsewhere in this document as the 1996 risk assessments) identified 
pests that are known to be associated with the five species of penjing 
plants in China and assessed the risk posed by those pests in the 
absence of the mitigative effects of the requirements of Sec.  319.37-
8(e), which are designed to establish and maintain a pest-free 
production environment and ensure the use of pest-free seeds or parent 
plants. Because the original risk assessments were prepared in 
September 1996, APHIS believed it was appropriate to update them in 
order to bring them up to date with current APHIS guidelines \1\ for 
pathway-initiated risk assessments. The 1996 risk assessments were 
based on guidelines applicable at the time those assessments were 
drafted, and the updates were necessary to provide the most transparent 
communication of risk possible at this time. The updated risk 
assessment documents are referred to elsewhere in this document as the 
2003 supplementary risk assessments.
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    \1\ Version 5.02, available on the Internet at: http://www.aphis.usda.gov/ppq/pra/commodity/cpraguide.pdf
.

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    Further, as noted by commenters, the 1996 risk assessments did not 
contain a thorough description of how the mitigation measures required 
under the regulations in Sec.  319.37-8(e) reduce the risk posed by the 
specific quarantine pests of penjing that were identified in the risk 
assessments. To address these

[[Page 2482]]

concerns, we have prepared a risk management analysis, ``Pest Risk 
Management for Chinese Penjing Plants (September 15, 2003),'' that 
includes a substantial discussion of how the risk mitigation measures 
required under this final rule mitigate the risks posed by the classes 
of quarantine pests that were identified as likely to follow the 
commodity import pathway. The 2003 risk management analysis, as well as 
the 2003 supplemental risk assessments are available on the Internet at 
http://www.aphis.usda.gov/ppq/pim/.


Determination by the Secretary

    In this document, APHIS is adopting its proposal to allow the 
importation of penjing plants from China established in an approved 
growing medium as a final rule, with the changes discussed in this 
document. Specifically, we are allowing the importation of Buxus 
sinica, Sageretia thea, Serissa foetida, Podcarpus macrophyllus, and 
Ehretia microphylla penjing plants in growing media from China only.
    Under Sec.  412(a) of the Plant Protection Act, the Secretary of 
Agriculture may prohibit or restrict the importation and entry of any 
plant or plant product if the Secretary determines that the prohibition 
or restriction is necessary to prevent the introduction into the United 
States or the dissemination within the United States of a plant pest or 
noxious weed.
    The Secretary has determined that it is not necessary to prohibit 
the importation of five species of penjing plants from China that are 
established in an approved growing medium in order to prevent the 
introduction into the United States or the dissemination within the 
United States of a plant pest or noxious weed. This determination is 
based on the findings of the risk documents referred to earlier in this 
document and the Secretary's judgment that the application of the 
measures required under this rule will prevent the introduction or 
dissemination of plant pests into the United States.

Regulatory Requirements

    Under this final rule, penjing plants of the species Buxus sinica, 
Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia 
microphylla imported in growing media are subject to the requirements 
of paragraph (a) of Sec.  319.37-8 of the regulations, which requires, 
with certain exceptions, that plants offered for importation into the 
United States be free of sand, soil, earth, and other growing media. 
This requirement is intended to help prevent the introduction of plant 
pests that might be present in the growing media; the exceptions to the 
requirement take into account factors that mitigate that plant pest 
risk. Those exceptions, which are found in paragraphs (b) through (e) 
of Sec.  319.37-8, consider either the origin of the plants and growing 
media (paragraph (b)), the nature of the growing media (paragraphs (c) 
and (d)), or the use of a combination of growing conditions, approved 
media, inspections, and other requirements (paragraph (e)).
    That combination approach found in Sec.  319.37-8(e) provides 
conditions under which plants from 10 listed taxa may be imported into 
the United States established in an approved growing medium. In 
addition to other requirements, Sec.  319.37-8(e):
    [sbull] Specifies the types of growing media that may be used;
    [sbull] Requires plants to be grown in accordance with written 
agreements between APHIS and the plant protection service of the 
country where the plants are grown and between the foreign plant 
protection service and the grower;
    [sbull] Requires the plants to be rooted and grown in a greenhouse 
that meets certain requirements for pest exclusion and that is used 
only for plants being grown in compliance with Sec.  319.37-8(e);
    [sbull] Restricts the source of the seeds or parent plants used to 
produce the plants, and requires grow-out or treatment of parent plants 
imported into the exporting country from another country;
    [sbull] Specifies the sources of water that may be used on the 
plants, the height of the benches on which the plants must be grown, 
and the conditions under which the plants must be stored and packaged; 
and
    [sbull] Requires that the plants be inspected in the greenhouse and 
found free of evidence of plant pests no more than 30 days prior to the 
exportation of the plants.
    A phytosanitary certificate issued by the plant protection service 
of the country in which the plants were grown that declares that the 
above conditions have been met must accompany the plants at the time of 
importation. These conditions have been used successfully to mitigate 
the risk of pest introduction associated with the importation into the 
United States of approved plants established in growing media.
    In addition to being subject to the general requirements of Sec.  
319.37-8(e), under this final rule, penjing plants imported from China 
in growing media must also meet the following requirements:
    [sbull] The propagative materials used to produce the penjing 
plants may enter an approved greenhouse only as seeds, tissue cultures, 
unrooted cuttings, or rooted cuttings without growing media. Rooted 
cuttings may not be established or grown in soil at any time. Rooted 
cuttings may be established in a greenhouse or outside the greenhouse 
on raised benches (46 cm in height) in pots containing only APHIS 
approved growing media.
    [sbull] When any cuttings are introduced into the greenhouse, they 
must be free of growing media, inspected, and found free of plant pests 
and then treated with a pesticide dip approved by the Animal and Plant 
Quarantine Service of the People's Republic of China that will control 
mites, scale insects, whiteflies, thrips, and fungi. The plants must be 
propagated from mother plants that have been visually inspected by an 
APHIS inspector or an inspector of the Animal and Plant Quarantine 
Service of the People's Republic of China and found free of certain 
pests.
    [sbull] The penjing plants must be grown in a greenhouse that meets 
the requirements of Sec.  319.37-8(e) for at least 6 months immediately 
prior to export.
    [sbull] While in the greenhouse, plants must be treated with 
appropriate pesticides at least once every 10 days or as needed for 3 
months before shipping to maintain a pest-free condition.
    These additional requirements were determined to be necessary 
according to risk analysis to mitigate the unique risks posed by the 
five species of penjing plants that are eligible for importation from 
China in growing media under this final rule.

Other Recent Revisions to Regulations Pertaining to Imported 
Artificially Dwarfed Plants

    On August 19, 2002, APHIS published in the Federal Register a final 
rule (67 FR 53727-53731, Docket No. 00-042-2) that amended the 
regulations pertaining to all imported artificially dwarfed plants. 
Under the requirements established by that final rule (contained in 
Sec.  319.37-5(q)), imported artificially dwarfed plants must be grown 
in accordance with the following requirements and be accompanied by a 
phytosanitary certificate containing declarations that those 
requirements have been met:
    [sbull] The artificially dwarfed plants must be grown for at least 
2 years in a greenhouse or screenhouse in a nursery registered with the 
government of the country where the plants were grown;
    [sbull] The greenhouse or screenhouse in which the artificially 
dwarfed plants are grown must have screening with openings of not more 
than 1.6 mm on all vents and openings, and all

[[Page 2483]]

entryways must be equipped with automatic closing doors;
    [sbull] The artificially dwarfed plants must be grown in pots 
containing only sterile growing media during the 2-year period when 
they are grown in a greenhouse or screenhouse in a registered nursery;
    [sbull] The artificially dwarfed plants must be grown on benches at 
least 50 cm above the ground during the 2-year period when they are 
grown in a greenhouse or screenhouse in a registered nursery; and
    [sbull] The plants and the greenhouse or screenhouse and nursery 
where they are grown must be inspected for any evidence of pests and 
found free of pests of quarantine significance to the United States at 
least once every 12 months by the plant protection service of the 
country where the plants are grown.
    We wish to clarify that, for the purposes of the regulations, 
plants less than 2 years of age are not considered to be artificially 
dwarfed, even if they have been trained in the same manner as other 
artificially dwarfed plants. Although the regulations in Sec.  319.37-
5(q) require artificially dwarfed plants to be grown in a greenhouse 
for 2 years, plants that are less than 2 years of age may be imported 
subject to applicable regulations in ``Subpart--Nursery Stock, Plants, 
Roots, Bulbs, Seeds, and Other Plant Products'' (Sec. Sec.  319.37 
through 319.37-14).
    The regulations in Sec.  319.37-5(q) were proposed and adopted 
after publication of our proposed rule regarding the importation of 
penjing from China in growing media, and were intended to address the 
risk that imported artificially dwarfed plants could be infested by 
longhorned beetles. These requirements do not apply to penjing plants 
imported from China in growing media under the regulations in Sec.  
319.37-8(e) unless the imported penjing plants are 2 years of age or 
older. Penjing plants less than 2 years of age that are grown in 
accordance with the requirements of Sec.  319.37-8(e) are not likely to 
become infested with longhorned beetles due to pest-exclusionary 
greenhouse conditions. Furthermore, such plants are not likely to be of 
suitable size to provide harborage for wood-boring beetles.
    We believe that plants that are 2 years of age or greater may reach 
dimensions that could provide harborage for longhorned beetles, and 
therefore, penjing plants imported from China in growing media that are 
2 years of age or older must satisfy the requirements of this final 
rule and the requirements of Sec.  319.37-5(q). For example, the 
regulations in Sec.  319.37-5(q) require that plants be grown for 2 
years in a greenhouse or screenhouse with screen openings no greater 
than 1.6 mm in size, while Sec.  319.37-8(e) requires that plants be 
grown for 6 months in a greenhouse with screen openings no greater than 
0.6 mm in size. Again, both requirements must be satisfied. One way to 
satisfy both requirements would be to grow the plants in accordance 
with Sec.  319.37-5(q) for 18 months, and then move them to a 
greenhouse that meets the requirements of Sec.  319.37-8(e) for 6 
additional months. Alternately, the plants could be grown in a 
greenhouse that meets the requirements of Sec.  319.37-8(e) for a total 
of 24 months, thus eliminating the need for multiple facilities and the 
movement of plants.
    The current regulations in Sec.  319.37-5(q) do not make it clear 
that plants less than 2 years of age are not subject to the regulations 
in that section. We are therefore clarifying that fact in this final 
rule. This change will not affect the way the current regulations are 
enforced, and is necessary to clarify what imported plants are subject 
to the requirements of Sec.  319.37-5(q), especially in light of the 
revisions made to the regulations by this final rule.

Discussion of Public Comments on the Proposed Rule

    We received eight comments on the proposed rule. Two comments, 
which arrived during the first 60 days of the comment period, simply 
asked for an extension of the comment period, which we granted. The 
other six comments were from representatives of plant industry 
organizations, an invasive species interest group, and representatives 
of State agricultural agencies.
    We also received seven comments in response to our September 2003 
notice of the availability of the environmental assessment. Some of 
those comments pertain to the risk documents or to the proposed rule 
for this action. All of these comments are addressed below, along with 
comments submitted during the comment period for the proposed rule.

Compliance and APHIS's Ability to Enforce

    One commenter stated that due to budget cuts and downsizing in 
Federal agencies, it is unclear whether APHIS can continue to conduct 
adequate inspections, especially in the face of an increase in the 
amount of plant material entering the United States.
    While some Federal agencies have been subject to budget cuts and 
downsizing, APHIS's appropriated funding for Agricultural Quarantine 
Inspection (AQI) Programs has doubled since 1998, from approximately 
$27.2 million to $55 million in 2002. Funds collected via AQI user fees 
have increased from $140.5 million in 1998 to $260 million in 2002. The 
inspections required under this rule will not be affected by the 
transfer of APHIS personnel to the Department of Homeland Security 
(DHS). All plants imported under this rule are required to be imported 
into Federal plant inspection stations,\2\ which continue to be staffed 
by specially trained APHIS, not DHS, inspectors. APHIS has reviewed its 
resources and believes it has adequate resources available to ensure 
compliance with the conditions of the final rule.
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    \2\ A list of Federal plant inspection stations is contained in 
7 CFR 319.37-14(b).
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    Another commenter suggested that some inspectors may not be able to 
recognize every pest of risk, and claimed that APHIS's own pest 
interception data show that inspectors are often unable to identify the 
genus and species of intercepted pests.
    When an unknown pest is found, inspectors may allow treatment of 
the commodity; they may allow the shipper to re-export the commodity to 
the country of origin, or, in some cases, to another country, or they 
may destroy the commodity, if necessary. Such decisions are based on 
the information that is available on the pests and are made in 
consultation with APHIS-Plant Protection and Quarantine's National 
Identification Service,\3\ which is made up of national experts on pest 
identification.
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    \3\ See http://www.aphis.usda.gov/ppq/nis/ for more information 

on National Identification Services.
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    One commenter stated that the conditions imposed by Sec.  319.37-8 
cannot be verified by APHIS because the cost of attempting to verify 
compliance is a significant expense and would require an unprecedented 
level of cooperation from other governments and their agencies.
    Under the regulations in Sec.  319.37-8, there must be an agreement 
between APHIS and a foreign entity for enforcement of the regulations 
in that section. In this case, the agreement will technically be 
between APHIS and the national plant protection organization of China. 
This agreement is referred to elsewhere in this document as the 
bilateral workplan. Each grower who wishes to export to the United 
States under the regulations must enter into an agreement with the 
national plant protection organization of the People's Republic of 
China whereby he or she must agree to comply with the

[[Page 2484]]

provisions of the regulations in Sec.  319.37-8 and to allow APHIS 
inspectors, and representatives of the People's Republic of China's 
national plant protection organization, access to the growing facility 
as necessary to monitor compliance with the provisions of that section. 
China's national plant protection organization is responsible for 
ongoing oversight of the program. APHIS inspectors will monitor for 
compliance with the regulations by making periodic visits to production 
sites, as is the case with current and past plants in growing media 
programs such as the following:
    [sbull] In the Netherlands, two to four greenhouses (companies) 
have participated in the plants in growing media program each year 
since 1990. Both ferns and Anthurium have been grown and exported to 
the United States. Currently, three greenhouses are in the program. 
APHIS plant health specialists inspect the greenhouses 4 to 12 times a 
year for compliance with program requirements, including the absence of 
plant pests. No greenhouses have been found to be noncompliant, and no 
plant pests have been found on any of these visits.
    [sbull] In Israel, one greenhouse growing ferns and African violets 
participated in the plants in growing media program between 1990 and 
1994. This facility was inspected by APHIS plant health specialists 
three to five times a year. Again, no greenhouses were found to be 
noncompliant and no plant pests were found.
    Based on our experience with these programs, we are confident that 
the safeguards work, and that we can verify compliance effectively.
    One commenter questioned what will happen if parties are caught out 
of compliance, including in the event of pest- or disease-infested 
shipments.
    If APHIS determines that certain species of penjing imported from 
China in growing media contain quarantine or actionable pests, APHIS 
will investigate the source of the detection and apply appropriate 
measures to mitigate the pest risk, including stopping imports from a 
specific producer or shutting down the entire program, if the 
circumstances show that either of these actions is warranted.

Risk Assessment

    As noted earlier in this document, several commenters expressed 
that the rule should apply only to imports of Buxus sinica, Sageretia 
thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia microphylla 
penjing plants, since those were the only species considered in the 
1996 risk assessments. The commenters expressed concern that if the 
rule was applied at the genus level for each species without 
considering the unique risks posed by other species within the genus, 
imports would pose greater pest risks than APHIS estimated in its risk 
assessments.
    We agree with commenters' concerns, and this final rule allows only 
the importation of Buxus sinica, Sageretia thea, Serissa foetida, 
Podocarpus macrophyllus, and Ehretia microphylla penjing plants, as 
those species were the only ones considered in the 1996 risk 
assessments.
    Several commenters stated that APHIS should reexamine its 1996 pest 
risk assessments, analysis procedures, and policies to ensure that they 
are consistent with current levels of scientific knowledge and 
standards. Commenters suggested that the 1996 risk assessments should 
form ``a link between scientific data and decision makers,'' but also 
that decisionmakers must have accurate and adequate scientific data 
upon which to base their decisions--which, the commenters argued, is 
not the case in this rulemaking. The commenters further claimed that 
the risk assessors' conclusions were not supported by enough scientific 
information and that the risk assessments should describe the processes 
and information sources used to estimate the risk posed by the 
importation of each plant species.
    As noted elsewhere in this document, we have updated the 1996 risk 
assessment to bring them up to current standards. These updates 
included (1) inserting the data from the 1996 risk assessment into the 
risk assessment document format currently used by APHIS, (2) searching 
for additional research and data published since the 1996 risk 
assessment was prepared that could have a bearing on the findings of 
the risk assessment, and (3) preparing a risk management analysis to 
address how to reduce the risk posed by quarantine pests of the five 
species of penjing that can be expected to follow the import pathway. 
The 2003 supplemental risk assessments and risk management analysis 
also cite scientific evidence upon which conclusions were based.
    We believe that by making the link between the identified 
quarantine pests and the mitigation measures more apparent, we have 
addressed the commenters' concerns about the need for a link between 
scientific data and decisionmakers. The 2003 risk assessment and risk 
management analysis are based on the best data available to us at the 
time the documents were drafted, and they provide a clear and rational 
basis as to why the five identified species of penjing imported from 
People's Republic of China in growing media will not lead to the 
introduction of plant pests or noxious weeds into the United States.
    Further, the pest list contained in the 1996 and 2003 risk 
assessments are based on (1) a search of all available scientific 
literature and (2) APHIS's pest interception records for imported 
plants of the five penjing species. As such, we examined data on prior 
bare-root penjing imports and visited some of the production sites that 
would export as a result of the final rule. Furthermore, any exports of 
the five species of penjing by People's Republic of China would be 
contingent on an inspection of the production sites by APHIS and the 
execution of the bilateral workplan described earlier in this document. 
We believe our 2003 risk analysis provides an adequate analysis of the 
risks posed by quarantine pests, and documents how the measures in 
Sec.  319.37-8(e) remove those pests from the import pathway.
    Several commenters stated that basing a risk assessment on a 
literature search has some inherent weaknesses. One of the commenters 
stated that literature searches do not catch all pests due to the fact 
that pests have different common names, and because only the title 
words of literature are searched. Several commenters also stated that 
insufficient scientific literature and biological information regarding 
penjing pests exists to justify reliance upon a literature search, as 
the five species of penjing are not a major agricultural commodity and 
research has not been conducted to the necessary depth for every pest 
on every penjing species. Several commenters noted that penjing is an 
uncommon crop, and that as such, has not had the extensive research 
that more widely produced crops typically endure. Another commenter 
claimed that the risk potential for all the pest species identified may 
be high, yet due to a lack of information, the potential effects of 
penjing importation cannot be adequately addressed at this time. 
Another commenter stated that the 1996 risk assessment may not consider 
all potential pests, and relatedly, other commenters stated that the 
risk mitigations are not designed to protect against all potential 
unidentified pests.
    The purpose of conducting an analysis of the risk posed by imported 
agricultural commodities is to evaluate available scientific evidence 
and to provide an evaluation of the risk associated with the 
importation of those commodities. As such, APHIS can only

[[Page 2485]]

make the determination to allow the importation of the commodity based 
on the current state of scientific knowledge. In developing the list of 
pests that are analyzed in the 1996 and 2003 risk assessments, we began 
with a list of pests provided to us by People's Republic of China. We 
then consulted applicable scientific literature (including field 
surveys done to date) and reviewed APHIS's records to determine what 
pests were intercepted on imported plants of the five penjing species. 
Literature searches are unique to each risk analysis, and typically 
begin with broad searches of both abstracts of publications and the 
entire text of publications, depending on the database being searched. 
These initial searches typically use scientific species, genus, and 
family names, as well as known common names of plants. As analysts 
learn more about the pests involved and their nomenclature, additional 
pest-specific searches are conducted. We believe these sources provide 
an adequate means to identify and assess pests of concern, even on 
plants considered to be uncommon crops.
    While we do not believe there is a shortage of appropriate 
scientific information in this specific case, if APHIS were to regulate 
the trade of agricultural commodities based on the risk posed by 
unknown factors, such an action could be viewed as highly arbitrary, 
which could potentially affect the export markets for our own 
domestically produced commodities. Under the Plant Protection Act, 
APHIS protects American agriculture while facilitating the trade of 
agricultural commodities. There is always some uncertainty associated 
with the risk posed by imported agricultural products, and if zero risk 
were the standard applied, there would be no international trade in 
agricultural products. While we can never be certain that our methods, 
regulations, and policies will exclude pests 100 percent of the time, 
our goal is to do just that, to the extent practicable. We are 
confident that the measures required under this rule will mitigate the 
pest risk posed by importing penjing plants of the species Buxus 
sinica, Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and 
Ehretia microphylla in approved growing media. Our judgment is 
supported by the fact that bare-rooted penjing plants and the growing 
media in which they will be imported have separately been imported from 
throughout the world for many years with no known associated pest 
introductions. Given that the plants in growing media will be subject 
to a number of additional requirements (the effects of which are 
considered and evaluated in the 2003 risk management analysis) that do 
not apply to bare-rooted plants, we believe that the risk posed by 
known and unknown pests is appropriately reduced, to the extent 
practicable, by the measures required by this final rule.
    Several commenters stated that we had not included certain pests of 
concern in the 1996 pest risk assessments. The commenters also claimed 
that the risk assessments should be reevaluated in light of past 
detections of wood-boring citrus longhorned beetles that were believed 
to be associated with imported artificially dwarfed plants.
    As described earlier in this document, in August 2002, APHIS 
amended the regulations pertaining to the importation of artificially 
dwarfed plants from all countries. Those amendments to the regulations 
were intended to address the risk that imported artificially dwarfed 
plants could contain longhorned beetles. Further, we are confident that 
our 1996 risk assessments and our 2003 risk assessment and management 
documents consider all pests known to be associated with the five 
species of penjing. Based on the findings of our risk documents, we 
believe that the measures contained in Sec.  319.37-8(e) will 
effectively remove known quarantine pests from the import pathway. As 
stated previously, the measures contained in Sec.  319.37-5(q) will 
effectively address the risk posed by longhorned beetles.

Risk Management

    Several commenters claimed that inspection is not a reliable 
mitigation against many pests, including pathogens.
    Inspection is only one of several risk mitigation measures required 
by this final rule to be applied to penjing plants imported from China 
in growing media, and is not intended to be the sole source of 
protection against the introduction of pests, including pathogens. The 
combined effects of several other measures required are described in 
detail in the 2003 risk management analysis. We believe the application 
of the measures required by the plants in growing media regulations in 
Sec.  319.37-8(e), as revised, is sufficient to reduce the risk posed 
by penjing plants imported from China in growing media to the extent 
practicable.
    One commenter suggested that APHIS should require plant defoliation 
prior to export of plants from China, since defoliation would eliminate 
many foliar pathogens and make visual inspections of the plant at the 
port of entry easier to conduct.
    We are confident that the proposed preshipment inspection and 
pesticide sprays will remove foliar pests of concern from the import 
pathway. Furthermore, it is standard practice for inspectors at plant 
inspection stations to visually inspect the entire imported plant, 
including foliage.
    Several commenters noted that the proposed rule's provisions allow 
field-grown plants to be moved into a greenhouse, and claimed that the 
risk posed by such an action is unacceptable due to the potential for 
field-grown plants to become infested with soil-based pests such as 
nematodes prior to entry into the greenhouse.
    We agree that the risks noted by commenters should be further 
mitigated. In response, we are prohibiting the entry of field-grown 
plants into approved greenhouses. Under this final rule, the 
propagative materials used to produce artificially dwarfed (penjing) 
plants may enter an approved greenhouse only as seeds, tissue cultures, 
unrooted cuttings, or rooted cuttings with no attached growing media. 
Furthermore, cuttings may not be established or grown in soil at any 
time, but may be established in a greenhouse in approved media or 
outside the greenhouse on raised benches (46 cm in height) in pots 
containing only APHIS approved growing media. We believe this revision 
to our proposal reduces the risk that plants entering an approved 
greenhouse could be infested with nematodes or other soil-based pests 
to the extent practicable.
    One commenter stated that the risk mitigations contained in the 
proposed rule rely too heavily on the use of chemicals and further 
suggested that serious alien pests are resistant to many highly toxic 
and persistent chemical insecticides. That commenter also noted that 
many effective pesticides are no longer available in the United States. 
Another commenter suggested that APHIS needs to require the use of 
specific chemicals and provide efficacy data for each one.
    There is no specific scientific evidence that any of the quarantine 
pests affecting the five species of penjing are resistant to 
pesticides. We are confident that the measures required under the 
regulations in Sec.  319.37-8(e) will reduce the risk posed by penjing 
plants imported from China, regardless of whether or not the pests are 
resistant to pesticides. Our judgment is supported by the fact that 
these plants have been imported bare-rooted for

[[Page 2486]]

many years, with no known associated pest introductions. Given that the 
plants in growing media will be subject to a number of additional 
requirements that do not apply to bare-rooted plants, we believe that 
the risks are appropriately mitigated.
    APHIS generally does not require, by regulation, that specific 
pesticides be used to control pests as part of foreign import programs, 
given that pesticide labels are subject to change and given that 
certain pesticides may not be available in all countries. Rather, APHIS 
will not enter into a bilateral workplan with an exporting country 
unless the exporting country provides us with data on the efficacy of 
pesticides that are to be applied as part of a regulatory system.
    One commenter claimed that the success of the proposed rule depends 
upon the cooperation and enforcement of the government of exporting 
country, which in many cases simply are inadequate or underfunded. The 
commenter claimed that compliance with the conditions spelled out in 
Sec.  319.37-8(e) could only be assured if an inspector were on-site 
every hour of every day in every ``certified'' greenhouse--and perhaps 
not even then--and stated that signing an agreement does not guarantee 
that it will be followed. The commenter stated that APHIS should take 
extra precautions to enter only into agreements that have a high 
likelihood of compliance and claimed that there is no such assurance in 
this case.
    The regulations in Sec.  319.37-8 require that for penjing 
producers in the People's Republic of China to export Buxus sinica, 
Sageretia thea, Serissa foetida, Podocarpus macrophyllus, and Ehretia 
microphylla to the United States, there must be an agreement in place 
that stipulates provisions for how the regulations will be enforced. 
Furthermore, each grower who wishes to export to the United States 
under the regulations must enter into an agreement with the national 
plant protection organization of the People's Republic of China whereby 
he or she must agree to comply with the provisions of the regulations 
in Sec.  319.37-8 and to allow APHIS inspectors, and representatives of 
the People's Republic of China's national plant protection service, 
access to the growing facility as necessary to monitor compliance with 
the provisions of that section.
    We disagree with the commenter that these agreements do not provide 
for verification that the conditions specified in the regulations will 
be followed. As noted elsewhere in this document, APHIS monitors 
production sites to ensure compliance with the regulations. If the 
regulations are not followed, inspections of the production sites and 
inspections of the imported plants at the ports of entry in the United 
States will reveal as much, and APHIS may hold imports until an 
investigation can be completed and appropriate measures initiated, 
including stopping imports from a specific producer or shutting down 
the entire program, if the circumstances show that such an action is 
warranted. For this reason, the national plant protection organization 
of the People's Republic of China and growers have an economic 
incentive to follow the regulations.
    Several commenters stated that screens of 0.6 mm mesh are 
inadequate to keep out certain important pests.
    The screen mesh size required under the regulations in Sec.  
319.37-8(e) is sufficient to exclude most life stages of all quarantine 
pests of the five penjing species. Mesh screening is one part of the 
systems approach, and those screens are used in conjunction with 
pesticide dips; these measures act as redundant phytosanitary measures 
to remove all pests of concern from the pathway. Regular inspections of 
growing premises are intended to ensure that plants are grown in a 
pest-free environment, and our past experience with this type of 
program provides evidence that this approach is successful.

Growing Media

    Some commenters stated that increased risk of pest introduction 
comes not from penjing plants but from the medium in which they are 
shipped, which, they maintain, the 1996 risk assessment did not 
consider. The commenters stated that the likelihood of importing pests 
and diseases is greatly increased where plants are already established 
in sphagnum, or any other growing medium, as bare-root plants allow a 
more thorough inspection of plant roots and easier detection of any 
pests or diseases which may be present. One commenter stated that the 
medium also provides harborage for dormant pest stages and may delay 
pest and disease symptoms. Another commenter stated that insects and 
other pests that feed on roots are found in substrates during part of 
their life cycle may not be noticed by the APHIS inspector during 
inspection. The commenters also stated that there may be an 
unacceptable risk of pest introduction associated with even bare-root 
penjing.
    The 1996 risk assessment and 2003 risk documents consider the fact 
that growing media has an effect on pests' ability to find suitable 
shelter and an effect on the ability of inspectors to detect certain 
pests that may be obscured by growing media. Specifically, the risk 
assessment took these factors into consideration in its estimates of 
the likelihood of introduction. The risk posed by growing media in and 
of itself was not considered in the risk assessment, because the 
specific types of growing media are already approved and listed in 
Sec.  319.37-8(e)(1) of the regulations, and have been successfully 
imported into the United States for years. Such media do not present a 
risk of pest introduction into the United States.
    Based on many years of inspections of bare-rooted artificially 
dwarfed plants, we do not believe that it is necessary to impose any 
additional restrictions on their entry, beyond those we established in 
2002 (described earlier in this document). We believe the recently 
amended regulations provide protection against the introduction of 
pests known to infest such plants.
    One commenter stated, without providing specific evidence, that 
growing media increases the possibility that the imported commodity 
will be a host for bacteria and viruses.
    We are aware that many plants, including those not established in 
growing media, carry bacterial and viral pathogens. Available 
literature, however, indicates that none of these pathogens are 
specifically identified as a pest of the five species of penjing. As 
stated elsewhere in this document, we can only make determinations as 
to whether a new agricultural commodity can be safely imported based on 
available scientific evidence, and we are not aware of any evidence 
that supports the commenter's suggestion. Given that the commenter did 
not identify particular viruses and bacteria, we have no basis to 
revise our risk documents.
    One commenter stated that plants should be required to be 
established in sterile growing media rather than unused media, as was 
proposed.
    Based on years of importations and inspections of various types of 
approved growing media we are confident that the approved growing media 
listed in Sec.  319.37-8(e)(1), by virtue of their natural composition, 
are inhospitable to most pest species, and need not be sterilized to 
remain pest-free. Further, APHIS intends to require under the 
conditions of the bilateral workplan for this program that media will 
have to be safeguarded against pest infestation prior to entry into the 
greenhouse.

Other General Comments

    Several commenters expressed confusion regarding our use of the 
terms

[[Page 2487]]

penjing and artificially dwarfed plants, and requested we clarify them.
    A plant is considered by APHIS to be artificially dwarfed if the 
plant and its root system are trained and/or trimmed by a grower to 
restrict the plant's growth and to create or maintain an aesthetically 
pleasing miniature plant. Penjing is an art form which utilizes 
artificially dwarfed plants.
    Nearly any species of plant can be artificially dwarfed, but 
certain species are preferred by growers due to their natural 
characteristics and ability to respond to training. Such plants are 
artificially dwarfed to create miniature landscapes in pots. In fact, a 
literal translation of the Chinese word penjing is ``landscape in a 
pot.'' The Chinese term penjing, like the Japanese term bonsai, simply 
refers to any plant that has received this kind of training, regardless 
of species of the plant. To clarify, this final rule applies to plants 
of Buxus sinica, Sageretia thea, Serissa foetida, Podocarpus 
macrophyllus, and Ehretia microphylla that have been artificially 
dwarfed by growers, and that are imported in growing media from China.
    One commenter stated that the regulatory flexibility analysis 
included in the proposed rule was superficial and not sensitive to the 
losses the commenter suggested that U.S. plant retailers and importers 
would face as a result of the importation of penjing established in 
growing media from China. The commenter also suggested that the 
economic analysis did not adequately account for the extra costs and 
losses that U.S. growers may suffer should a penjing-related pest 
become established in the country.
    The commenter did not provide specific figures or other data for us 
to evaluate. APHIS is bound under international trade agreements to 
remove technical barriers to trade in the event that such barriers are 
found by scientific analysis to be unnecessary. In this case, we have 
conducted risk analyses that found that all quarantine pests associated 
with the five species of penjing from China are effectively removed 
from the import pathway by the measures required under Sec.  319.37-
8(e). As such, we have determined that it is not necessary to prohibit 
those penjing species from the People's Republic of China in approved 
growing media. We believe our final regulatory flexibility analysis 
complies with the requirements of the Regulatory Flexibility Act, as 
amended. Further, our analysis makes use of all the relevant data that 
we could locate.
    One commenter suggested that the proposed rule was published 
prematurely because APHIS's Section 7 consultations with the U.S. Fish 
and Wildlife Service were incomplete.
    We have now concluded those consultations, and we have received 
concurrence from the U.S. Fish and Wildlife Service. Information 
regarding those findings is available by contacting the person listed 
under FOR FURTHER INFORMATION CONTACT.
    Another commenter expressed confusion as to why the title for the 
environmental assessment for this action referred to a final rule, when 
no final rule had been published at the time the environmental 
assessment was made available for public review.
    The environmental assessment for this action pertained simply to 
this rulemaking action, and evaluated the potential environmental 
effects of the proposed imports given the application of the provisions 
of this final rule, which are different from the provisions originally 
proposed.
    Another commenter stated that the body and conclusion of the 
environmental assessment made contradictory statements regarding 
eradication and control programs.
    We note the potential for confusion in these statements, and have 
revised the environmental assessment to eliminate the potential for 
confusion. The conclusion now clearly corresponds to statements made 
within the body of the document regarding control and eradication 
programs.
    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 
one change, as discussed in this document.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The 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 this rule we are amending the regulations governing the 
importation of plants and plant products to add artificially dwarfed 
(penjing) plants of the species Buxus sinica, Ehretia microphylla, 
Podocarpus macrophyllus, Sageretia thea, and Serissa foetida from the 
People's Republic of China to the list of plants that may be imported 
in an approved growing medium subject to specified growing, inspection, 
and certification requirements. This rule will relieve restrictions 
that currently allow these species to be imported only as bare-rooted 
plants.
    This analysis provides a qualitative assessment of the potential 
costs and benefits to U.S. interests and domestic small entities that 
are associated with the regulatory change. Given that pest risks will 
be adequately mitigated by the application of measures required by this 
rule, both costs and benefits associated with the rule derive primarily 
from increased availability of artificially dwarfed plants. Costs of 
the regulations will be borne largely by U.S. penjing growers and 
producers who could experience increased competition and marginally 
lowered prices. Benefits will be enjoyed by U.S. consumers, who will 
have access to an increased variety of penjing for consumption at 
lowered prices, and also by U.S. penjing importers (many of whom are 
also growers).
    Historically, the five penjing species have been enterable from 
China as bare-rooted plants. Penjing potted in growing media may have 
some advantages over bare-rooted plants, including the potential for 
enhanced survival time in transit and decreased transit costs. Bare-
rooted plants have short survival time outside of potting media and 
must be shipped by air freight. Potted plants, on the other hand, are 
more likely to tolerate the long and much less expensive ocean freight 
transit process.

Comparison of Regulatory Alternatives

    APHIS considered three alternatives to the implementation of a rule 
to allow the importation of penjing plants in growing media from China: 
(1) No action (no change to the current regulations), (2) a rule change 
to allow the importation of 5 species of penjing plants in approved 
growing media subject only to the general requirements contained in 
Sec.  319.37-8(e) without additional restrictions that are specific to 
penjing, and (3) a rule change to allow the importation of 5 species of 
penjing plants in approved growing media subject to the general 
requirements contained in Sec.  319.37-8(e) and subject to additional 
restrictions that are specific to penjing (preferred alternative).
    Under the first alternative (no change to the current regulations) 
APHIS would continue to allow the importation of bare-rooted penjing 
plants from China, according to the current regulations in Sec. Sec.  
319.37 through 319.37-14 and would not allow penjing plants to be 
imported in approved media. This alternative was not chosen because we 
have conducted risk analyses that found that all quarantine pests 
associated with the five species of penjing from China are effectively 
removed from the import pathway by the measures required under Sec.  
319.37-8(e). As such, we have determined that it is not necessary to

[[Page 2488]]

prohibit those penjing species from the People's Republic of China in 
approved growing media.
    The second alternative would allow importation of B. sinica, E. 
microphylla, P. macrophyullus, S. thea, and S. foetida in approved 
growing media from China under the universal requirements that apply to 
all plants imported in growing media under Sec.  319.37-8(e), without 
additional penjing-specific restrictions. This alternative was not 
chosen because it did not adequately mitigate the risk posed by 
specific pests that may be associated with the plants in media in 
China.
    Under the third alternative, APHIS would allow the importation of 
penjing plants in APHIS-approved growing media provided that certain 
phytosanitary requirements are met. This is the preferred regulatory 
option because it effectively mitigates the risk posed by all 
identified pests and is responsive to China's request.
    The changes to the regulations in Sec.  319.37-8(e) include 
specific risk management measures that, when applied, will provide 
adequate protection against the introduction into the United States of 
certain pests that may be present in shipments of penjing plants from 
China that are established in growing media. The components of this 
regulatory system, either used singly or in combination with one 
another, work toward ensuring that plant pests or diseases will not be 
imported with penjing plants from China. The components of the 
regulatory system are described in detail earlier in this document and 
in the 2003 risk management analysis.

Description of Domestic Industry

    Neither the U.S. Department of Agriculture nor the U.S. Census 
Bureau report domestic production data or trade data for artificially 
dwarfed plants. Available data on imports, which are based on number of 
shipments rather than number of plants, shows that in 2001, 207 
shipments of artificially dwarfed plants entered the United States. 
Almost half (97) of the shipments were from China, 23 were from Japan, 
13 were from Vietnam, and the remaining 37 were from Korea, Hong Kong, 
Canada, and other sources.
    A National Arboretum survey of North American nurseries and 
businesses involved in supplying artificially dwarfed plants and 
related products \4\ identified 367 bonsai and penjing firms, 95 
percent of which were in the United States (not including retail 
nurseries, garden centers, florists, or kiosks found in large U.S. 
shopping malls, which buy small numbers of plants for resale). The 
number of firms has been increasing steadily since the early 1950s. One 
hundred eight firms (30 percent) were identified in the Southeast, 102 
(28 percent) were identified in the Southwest, including California in 
particular, 84 (23 percent) were identified in the Northeast, 37 (10 
percent) were in the Midwest, and 26 (7 percent) in the Northwest; 
however, a few of the firms identified in the Northeast and Northwest 
are located in Canada. Ninety-seven (26 percent) full-service firms 
were identified, which import, obtain from other sources, and produce 
plants and supply all of the tools needed to cultivate and display 
plants, as well as 82 plant and/or seed suppliers, 81 tool suppliers, 
46 pot and container suppliers, 32 educational material suppliers, 28 
suppliers of educational services, and one rock supplier.
---------------------------------------------------------------------------

    \4\ Elias, T.S. ``Bonsai Bonanza.'' American Nurseryman. pp. 60-
66. April 1, 1999.
---------------------------------------------------------------------------

    Of the 367 bonsai-related firms reported in the survey, the 225 
most affected by this rule would probably be the full service bonsai 
nurseries (97 firms in 1997), specialty stores selling plants (82 firms 
in 1997), and stores selling containers and pots (46 firms in 1997).

    Table 1.--U.S. National Arboretum Survey of North American Bonsai
                       Related Businesses in 1997
------------------------------------------------------------------------
                                             Number of     Percentage of
             Type of company                 companies       companies
------------------------------------------------------------------------
General stores
    Full-service bonsai nurseries.......              97              26
Specialty stores:
    Plants including seed...............              82              22
    Tools, supplies, stands.............              81              22
    Containers and pots.................              46              13
    Magazines, books, and newsletters...              32               9
    Consultants and teachers............              28               8
    Rocks...............................               1               0
                                         -------------------------------
        Total...........................             367            100
------------------------------------------------------------------------
 This table was reproduced using data reported by Elias. Elias indicated
  that bonsai nurseries are smaller in scale than nurseries supplying
  traditional landscape trees, shrubs, and bedding plants and that,
  therefore, gross retail sales are significantly smaller. Per-unit
  sales, however, are among the highest in the industry: Mature bonsai
  specimens can range from several hundred dollars to $5,000.

Retail Prices

    Retail prices for penjing, reported by one of the larger full-
service firms on the west coast, range between $5 and $10 for 80 
percent of the trees in inventory, $20 and $35 for 10 percent of the 
trees in inventory, and $36 and up for the remainder.\5\ Three year old 
penjing plants, 7 inches tall, typically sell for $20.00.
---------------------------------------------------------------------------

    \5\ Muth, J. Personal communication. Bonsai Northwest. Seattle 
WA, 2003.
---------------------------------------------------------------------------

    In general, retail penjing prices increase with age, quality, and 
the amount of labor devoted to production and maintenance. Retail 
prices also appear to vary by species. A simple ordinary least squares 
regression of retail prices on age, height, and species indicates that 
retail prices increase almost $11 and $9 for each year a Japanese 
bonsai and Chinese penjing, respectively, have been alive. In addition, 
retail prices increased over $14 and a little less than $2 for each 
tree inch. The marginal impact of age on retail price was statistically 
significant for bonsai and penjing; however, the marginal impacts were 
not statistically different. The price data and regression statistics 
indicate that Japanese bonsai are much more expensive than Chinese 
penjing, as well as older and larger.
    Given the age/price relationships reported here, we would expect 
young penjing (greater than 6 months and less

[[Page 2489]]

than 24 months) plants imported from China under this rule to be at the 
lower end of the price spectrum, and to sell for less than the $20.00 
price reported for 7 inch 3-year-old penjing plants.

Transportation Costs

    The majority of penjing are imported via air freight or ocean 
vessel with soil removed from the roots. Because penjing and bonsai 
eventually die if left bare-rooted too long (especially plants 25 years 
old or older), only young trees can survive ocean shipment bare-rooted.
    Transportation costs vary widely and depend on the size of the 
tree, whether soil is attached to the roots, and the method of shipment 
(See table below). It may cost roughly $0.50 to ocean ship a small 
bare-rooted tree, $3.00 to ship the same bare-rooted tree airfreight, 
and $115 to ship a larger bare-rooted tree airfreight.
    Transportation costs increase dramatically for potted plants in 
media, because costs are based on the dimensions of the tree and its 
weight, both of which increase with the addition of growing media and a 
pot. For example, it may cost anywhere between $400 and $1,200 to 
airfreight a large tree with growing media attached to its roots \6\ 
and between $67 and $200 for ocean shipment, using the relationship 
between ocean and airfreight costs for small bare-rooted trees.
---------------------------------------------------------------------------

    \6\ Elias, T.S. Personal communication. U.S. National Arboretum, 
Agricultural Research Service, U.S. Department of Agriculture. 
Washington DC, 2003.

                      Table 2.--Retail Price for Small and Large Artificially Dwarfed Trees
----------------------------------------------------------------------------------------------------------------
                                                       $0.50           $3.00           $3.00          $21.00
                                                 ---------------------------------------------------------------
              Penjing retail price                 Water  (bare-    Air  (bare-        Water
                                                       root)           root)         (potted)      Air  (potted)
----------------------------------------------------------------------------------------------------------------
$28.11..........................................              2%             11%             12%             74%
$35.85..........................................              1%              8%             10%             58%
$43.58..........................................              1%              7%              8%             48%
$51.32..........................................              1%              6%              7%             41%
$59.06..........................................              1%              5%              6%             35%
$66.79..........................................              1%              4%              5%             31%
$74.53..........................................              1%              4%              5%             28%
$82.27..........................................              1%              4%              4%             25%
$90.00..........................................              1%              3%              4%             23%
$97.74..........................................              1%              3%              4%            31%
----------------------------------------------------------------------------------------------------------------
 Data taken from relationships estimated by Michael Livingston, USDA (unpublished). Retail price for penjing was
  estimated using an age of two years and a height appropriate to a two-year old tree.

    The data in the table present air and sea shipping costs for bare-
rooted and potted penjing as a percentage of retail plant prices (for 
plants of a height and price appropriate to 2 year old trees). Because 
of data limitations, shipping costs for plants less than 2 years old 
are not analyzed here. Shipping costs are a declining percentage of 
retail price for all four transit modes examined here. Air freight for 
penjing potted in media is by far the most expensive shipping option. 
Sea shipment of bare-rooted plants is the least expensive; but is 
usually not feasible because bare-rooted plants tend to die in transit 
during the long sea voyage.
    The cost of air shipping bare-rooted plants and the cost of sea 
shipping potted plants in media are roughly equivalent. This 
relationship suggests that the decision about whether to air freight 
bare-rooted penjing plants or sea freight potted penjing to the United 
States will probably be made on a case-by-case basis, and will depend 
on factors such as size, age, and species.

Conclusions

    Upon implementation of this rule, five species (Buxus sinica, 
Ehretia microphylla, Podocarpus macrophyullus, Sageretia thea, and 
Serissa foetida) of potted penjing plants (of any age, but which have 
been grown in a greenhouse for at least 6 months) will be enterable 
into the United States. All other species of penjing plants may 
continue to enter the United States as bare-rooted plants as they have 
done in the past. Under the new rule we might see increased imports of 
less expensive potted penjing of the five designated species.
    It is impossible to predict the amount by which volume of penjing 
imports from China will increase under this rule. Compliance with the 
more stringent mitigations required to ship potted penjing in media to 
the United States will impose additional costs on Chinese penjing 
producers. The extent to which the compliance costs associated with 
potted penjing will offset potential cost savings associated with 
shipping potted penjing is unclear. Possible sources of cost savings 
for potted penjing include improved survival in-transit for some ages/
sizes plants; possible cost advantages associated with selling plants 
and pots together as a unit; or unit cost savings that might be 
associated with high volume importations of potted penjing by U.S. 
chain stores using proprietary shipping lines.
    Many full-service bonsai nurseries import penjing from China and 
also grow their own artificially dwarfed plants; the net effects of 
potentially increased imports of lower-priced penjing from China on 
these firms is unclear. For large nurseries we contacted, roughly 45 
percent of the current inventory is imported, mostly from China, and 55 
percent is produced domestically or obtained from other sources. Potted 
penjing between 6 and 24 months shipped under this rule could compete 
with less expensive, younger, domestically produced dwarfed plants. But 
at the same time, these same firms would benefit by being able to 
import lower priced potted plants from China. Based on the National 
Arboretum survey, roughly 97 full service bonsai nurseries could be 
affected in this way. The net effect of the rule is expected to be 
positive, as consumers and some firms in the bonsai/penjing industry 
are expected to benefit from increased availability and potentially 
lower prices.

Regulatory Impacts on Small Entities

    The U.S. Small Business Administration defines a small full-service 
bonsai and penjing nursery as one with annual sales receipts no

[[Page 2490]]

greater than $6 million (NAICS 444220 Nursery and Garden Centers) or 
one with fewer than 100 employees (NAICS 422930 Flower, Nursery Stock, 
and Florists' Supplies Wholesalers). There were 97 full service bonsai 
nurseries in 1997. All of the full-service firms in the United States 
are small entities (Elias 2003). Net impacts of the regulation on these 
firms are unclear, as many of these firms are both importers and 
growers of penjing; however, impacts are not expected to be 
significant.
    Small plant and/or seed suppliers are those with annual sales 
receipts no greater than $0.75 million (NAICS 111421, Nursery and Tree 
Production). There were 82 stores specializing in bonsai plants in 
1997. It is thought that all of these were small firms. To the extent 
that these firms benefit from increased availability and variety of 
penjing at lower prices, the net effect of the regulation on these 
firms could be positive.
    Small pot, container, tool, and rock suppliers in the industry are 
those with annual sales receipts no greater than $6 million (NAICS 
444220, Nursery and Garden Centers; NAICS 451120, Hobby, Toy, and Game 
Stores). There were 128 firms specializing in bonsai/penjing tools in 
1997. All are believed to be small firms. To the extent that the supply 
of penjing increases following implementation of this rule, the 82 
bonsai tool and supply firms should be positively affected. Most custom 
bonsai container and pot manufacturers produce pots for more expensive 
plants, so they should not be significantly affected by this rule.
    Under these circumstances, 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.

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.

National Environmental Policy Act

    An environmental assessment and finding of no significant impact 
(FONSI) have been prepared for this final rule. The assessment provides 
a basis for the conclusion that the importation of penjing plants from 
China in approved growing media under the conditions specified in this 
rule will not present a risk of introducing or disseminating plant 
pests and will not have a significant impact on the quality of the 
human environment. Based on the finding of no significant impact, the 
Administrator of the Animal and Plant Health Inspection Service has 
determined that an environmental impact statement need not be prepared.
    The environmental assessment and FONSI were prepared in accordance 
with: (1) The National Environmental Policy Act of 1969 (NEPA), as 
amended (42 U.S.C. 4321 et seq.), (2) regulations of the Council on 
Environmental Quality for implementing the procedural provisions of 
NEPA (40 CFR parts 1500-1508), (3) USDA regulations implementing NEPA 
(7 CFR part 1b), and (4) APHIS's NEPA Implementing Procedures (7 CFR 
part 372).
    The environmental assessment and FONSI may be viewed on the 
Internet at http://www.aphis.usda.gov/ppd/es/ppqdocs.html. You may 

request paper copies of the environmental assessment and FONSI from the 
person listed under FOR FURTHER INFORMATION CONTACT. Please refer to 
the title of the environmental assessment when requesting copies. The 
environmental assessment and FONSI are also available for review in our 
reading room, which 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 (202) 
690-2817 before coming.

Paperwork Reduction Act

    This final rule contains no new information collection or 
recordkeeping requirements under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.).

List of Subjects in 7 CFR Part 319

    Bees, Coffee, Cotton, Fruits, Honey, Imports, Logs, Nursery stock, 
Plant diseases and pests, Quarantine, Reporting and recordkeeping 
requirements, Rice, Vegetables.


0
Accordingly, we are amending 7 CFR part 319 as follows:

PART 319--FOREIGN QUARANTINE NOTICES

0
1. The authority citation for part 319 continues to read as follows:

    Authority: 7 U.S.C. 450 and 7701-7772; 21 U.S.C. 136 and 136a; 7 
CFR 2.22, 2.80, and 371.3.

0
2. In Sec.  319.37-5, paragraph (q), the introductory text is revised 
to read as follows:


Sec.  319.37-5  Special foreign inspection and certification 
requirements.

* * * * *
    (q) Any artificially dwarfed plant imported into the United States, 
except for plants that are less than 2 years old, must have been grown 
and handled in accordance with the requirements of this paragraph and 
must be accompanied by a phytosanitary certificate of inspection that 
was issued by the government of the country where the plants were 
grown.
* * * * *

0
3. In Sec.  319.37-8, paragraph (e) is amended as follows:
0
a. By revising the introductory text to read as set forth below.
0
b. In paragraph (e)(2)(ix), by removing the word ``and'' at the end of 
the paragraph.
0
c. In paragraph (e)(2)(x)(B), by removing the period at the end of the 
paragraph and adding the word ``; and'' in its place.
0
d. By adding new paragraph (e)(2)(xi).


Sec.  319.37-8  Growing media.

* * * * *
    (e) A restricted article of any of the following groups of plants 
may be imported established in an approved growing medium listed in 
this paragraph if the restricted article meets the conditions of this 
paragraph and is accompanied by a phytosanitary certificate issued by 
the plant protection service of the country in which the restricted 
article was grown that declares that the restricted article meets the 
conditions of this paragraph:

Alstroemeria
Ananas \11\
---------------------------------------------------------------------------

    \11\ These articles are bromeliads, and if imported into Hawaii, 
bromeliads are subject to postentry quarantine in accordance with 
Sec.  319.7-7.
---------------------------------------------------------------------------

Anthurium
Artificially dwarfed (penjing) plants from the People's Republic of 
China of the following plant species: Buxus sinica, Ehretia 
microphylla, Podocarpus macrophyllus, Sageretia thea, and Serissa 
foetida.

Begonia
Gloxinia (=Sinningia)
Nidularium \11a\
---------------------------------------------------------------------------

    \11a\ See footnote 11.
---------------------------------------------------------------------------

Peperomia
Polypodiophyta (=Filicales) (ferns)
Rhododendron from Europe
Saintpaulia.
* * * * *
    (2) * * *
    (xi) Plants of the species Buxus sinica, Ehretia microphylla, 
Podocarpus macrophyllus, Sageretia thea, and

[[Page 2491]]

Serissa foetida from the People's Republic of China must also meet the 
following conditions:
    (A) Propagative cuttings. The propagative materials used to produce 
the artificially dwarfed (penjing) plants may enter an approved 
greenhouse only as seeds, tissue cultures, unrooted cuttings, or rooted 
cuttings with no growing media. Rooted cuttings may not be established 
or grown in soil at any time. Rooted cuttings may be established in a 
greenhouse or outside the greenhouse on raised benches (46 cm in 
height) in pots containing only APHIS approved growing media.
    (B) Inspection and treatment. When any cuttings are introduced into 
the greenhouse, they must be free of growing media, inspected, and 
found free of plant pests and then treated with a pesticide dip 
approved by the Animal and Plant Quarantine Service of the People's 
Republic of China that will control mites, scale insects, whiteflies, 
thrips, and fungi. The artificially dwarfed (penjing) plants must be 
propagated from mother plants that have been visually inspected by an 
APHIS inspector or an inspector of the Animal and Plant Quarantine 
Service of the People's Republic of China and found free of the 
following pests:
    (1) For Buxus sinica: Guignardia miribelii, Macrophoma ehretia, 
Meliola buxicola, and Puccinia buxi.
    (2) For Ehretia microphylla: Macrophoma ehretia, Phakopsora 
ehretiae, Pseudocercosporella ehretiae, Pseudocercospora ehretiae-
thyrsiflora, Uncinula ehretiae, Uredo ehretiae, and Uredo garanbiensis.
    (3) For Podocarpus macrophyllus: Pestalosphaeria jinggangensis, 
Pestalotia diospyri, Phellinus noxius, and Sphaerella podocarpi.
    (4) For Sageretia thea: Aecidium sageretiae.
    (5) For Serissa foetida: Melampsora serissicola.
    (C) Growing. The artificially dwarfed (penjing) plants must be 
grown in an approved greenhouse for at least 6 months immediately prior 
to export.
    (D) Additional treatments. While in the greenhouse, plants must be 
treated with appropriate pesticides at least once every 10 days or as 
needed for three months before shipping to maintain a pest-free 
condition.
* * * * *

    Done in Washington, DC, this 13th day of January 2004.
Bobby R. Acord,
Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 04-1066 Filed 1-15-04; 8:45 am]

BILLING CODE 3410-34-P