Title of Regulation: 2VAC5-440. Rules and Regulations for Enforcement of the Virginia Pest Law - Cotton Boll Weevil Quarantine (amending 2VAC5-440-10, 2VAC5-440-40, 2VAC5-440-50, 2VAC5-440-110).

Statutory Authority: § 3.2-703 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: February 14, 2014.

Agency Contact: Erin Williams, Policy and Planning Coordinator, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218, telephone (804) 786-1308, FAX (804) 371-7479, TTY (800) 828-1120, or email erin.williams@vdacs.virginia.gov.

Basis: Section 3.2-109 of the Code of Virginia authorizes the Board of Agriculture and Consumer Services to adopt regulations in accordance with Title 3.2 of the Code of Virginia regarding agriculture, animal care, and food.

Section 3.2-703 of Virginia's Tree and Crop Pests Law (§ 3.2-700 et seq. of the Code of Virginia) authorizes the board to quarantine the Commonwealth or any portion thereof when the board determines such action is necessary to prevent or slow the spread of a pest into, within, or from the Commonwealth. The cotton boll weevil quarantine was promulgated under this authority of the board.

On December 6, 2012, the board adopted proposed amendments to Rules and Regulations for Enforcement of the Virginia Pest Law - Cotton Boll Weevil Quarantine (2VAC5-440) and authorized staff to take all actions necessary to publish the proposed amendments in the Virginia Register of Regulations.

Purpose: The substance of this regulation was last amended in 2004. The agency has determined that this regulation should be amended to more accurately reflect current practices and procedures related to the Boll Weevil Eradication and Exclusion Program as well as the agency's current cotton boll weevil quarantine enforcement activities. The program and the cotton boll weevil quarantine assist in preventing the reinfestation of Virginia's cotton growing areas by the boll weevil, thereby protecting the economic welfare of citizens.

Substance: The regulation is amended to more accurately reflect current practices and procedures related to the program as well as the agency's current cotton boll weevil quarantine enforcement activities.

The regulation currently includes an outdated mailing address for the agency. The proposed amendments remove this information. The regulation currently requires that fees to participate in the program must be paid by cotton producers prior to July 1 of each year and directs that the fees will be collected by the federal Farm Service Agency (FSA). FSA no longer collects these payments. The proposed amendments to the regulation reflect this change in the program and replace the payment due date of July 1 with a more general due date of 30 days from the date of the invoice that the agency now generates. Additionally, the agency intends to revise the penalties for late payments and acreage underreporting. Currently, the penalties in the regulation are $5.00 per acre. The agency believes this penalty is excessive, particularly in light of the fact that the fees for 2011 and 2012 were $1.00 per acre and $0.50 per acre, respectively. The proposed amendments eliminate the current requirement that a grower submit a financial statement when requesting authorization to delay payment of the program fees he owes. The proposed amendments also eliminate the subsection regarding refunds in the event of emergency or hardship as this subsection was relevant when the program fee was collected prior to harvest. Currently, growers now pay the program fee at or near the time of harvest, thereby eliminating the need for a refund provision.

Issues: The proposed amendments update provisions to reflect the program's current operation. Additionally, the proposed amendments clarify provisions of the current regulation that are difficult to understand. As such, one advantage to the public and the Commonwealth of the proposed regulatory action is a regulation that is easier to read and understand.

The proposed amendments reduce the penalties for late payments and acreage underreporting from prescribed amounts that are excessive in light of the current program fees to a percentage of the program fee. This reduction in penalties is another advantage to the public.

This regulatory action poses no disadvantage to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Regulation. The Virginia Board of Agriculture and Consumer Services (Board) proposes to amend its regulations for the quarantine of cotton boll weevils to change the penalty for non-reporting and underreporting of cotton acreage.

Result of Analysis. Benefits likely outweigh costs for this regulatory action.

Estimated Economic Impact. Current regulations for the quarantine of boll weevils require cotton farmers to pay a per acre fee to cover the costs of the boll weevil eradication program. Farmers who underreport their acreage or do not report their acreage at all must currently pay a $5.00 penalty for each acre not reported. The Board now proposes to eliminate this $5.00 per acre penalty and instead charge farmers that underreport or fail to report their cotton acreage a penalty equal to 10% of the per acre fee that these farmers must pay. The fee per acre for the eradication program is currently 50 cents per acre so the penalty under these proposed regulations would be 5 cents per unreported acre which is considerably lower than the $5.00 per acre penalty that cotton farmers are subject to now. The fee per acre for this eradication program varies from year to year and is set at a level that is projected to cover the cost of the program. The Virginia Department of Agriculture and Consumer Services (VDACS) reports that the costs of this program have generally decreased over time due to 1) the improved efficiency in program operations and 2) the reduction of cotton boll weevil trap density as the cotton boll weevil infestations move farther from Virginia.

Cotton farmers will benefit from these changes as the penalty that they have to pay will decrease by several orders of magnitude. VDACS reports that the average cotton acreage for a cotton producing farm is 308 acres. A farmer with an average number of acres who fails utterly to report his acreage to VDACS would have to pay a penalty of $1,540 under current regulations; under these proposed regulations, that farmers penalty would fall to $15.40. This farmer will be better off at all program fee levels below $50.00 per acre (the point at which the 10% penalty would be equal to the current penalty of $5.00 per acre). Since program costs show a long term decreasing trend, farmers are likely to continue benefiting from the proposed new penalty structure. Since the program fees are set each year to cover the projected cost of the program, the integrity of the eradication program is unlikely to be adversely effected by the proposed new penalty structure.

Businesses and Entities Affected. VDACS reports that there are approximately 375 cotton growers in Virginia. All of these entities will be affected by these proposed changes.

Localities Particularly Affected. Localities in which cotton grows are likely to be particularly affected by these proposed regulations.

Projected Impact on Employment. This proposed regulatory action is unlikely to have an impact on employment in the Commonwealth.

Effects on the Use and Value of Private Property. Cotton farms in Virginia are likely to see a very marginal increase in the value on account of these proposed regulations that decrease the effect of one regulatory burden that farmers are subject to.

Small Businesses: Costs and Other Effects. Small business farmers are unlikely to incur any costs on account of these regulatory changes.

Small Businesses: Alternative Method that Minimizes Adverse Impact. Small business farmers are unlikely to incur any costs on account of these regulatory changes.

Real Estate Development Costs. These proposed regulations will likely have no effect on real estate development costs in the Commonwealth.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

Agency's Response to Economic Impact Analysis: The agency concurs with the analysis of the Department of Planning and Budget.

Summary:

The proposed amendments (i) clarify definitions and certain provisions, (ii) update the regulation to reflect the current operation of the Boll Weevil Eradication and Exclusion Program and the department's enforcement activities, and (iii) reduce the penalty for late payments and acreage underreporting.

2VAC5-440-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Authorized inspector" means any person employed by a state or federal regulatory plant pest agency and trained to inspect for and identify boll weevil in any living stage.

"Board" means the Board of the Virginia Department of Agriculture and Consumer Services.

"Boll weevil" means the live insect, "Anthonomus grandis grandis" Boheman, in any stage of development.

"Boll Weevil Eradication and Exclusion Program" or "program" means the program conducted by the Virginia Department of Agriculture and Consumer Services and the Southeastern Boll Weevil Eradication Foundation, Inc., to eradicate the boll weevil and subsequently prevent its reintroduction into areas where it has been eradicated.

"Certificate" means a document issued or authorized by an inspector to be issued under this chapter to allow the movement of regulated articles to any destination.

"Commissioner" means the Commissioner of the Virginia Department of Agriculture and Consumer Services or his designee.

"Compliance agreement" means a written agreement between a grower, dealer, or mover of regulated articles, and the Virginia Department of Agriculture and Consumer Services, United States Department of Agriculture, or both, wherein the former agrees to comply with the requirements of the compliance agreement.

"Cotton" means parts and products of plants of the genus "Gossypium," before processing.

"Cottonseed" means cottonseed from which the lint has been removed.

"Department" means the Virginia Department of Agriculture and Consumer Services.

"FSA" means the United States Department of Agriculture, Farm Service Agency.

"Gin trash" means all of the material produced during the cleaning and ginning of seed cotton, bollies, or snapped cotton, except for the lint, cottonseed, and gin waste.

"Grower" means a farm operator or producer, whether the owner of the land or not.

"Infestation" means the presence of the boll weevil, or the existence of circumstances that make it reasonable to believe that boll weevil is present.

"Inspector" means any employee of the Virginia Department of Agriculture and Consumer Services, or other person authorized by the commissioner to enforce the provisions of the quarantine and regulations.

"Limited permit" means a document issued by an inspector to allow the movement of noncertifiable regulated articles to a specified destination for limited handling, use, processing, or treatment.

"Lint" means all forms of raw ginned cotton, either baled or unbaled, except linters and waste.

"Moved (movement, move)" "Move," "moved," or "movement" means shipped; offered for shipment to a common carrier; received for transportation or transported by a common carrier; or carried, transported, moved, or allowed to be moved by any means.

"NASS" means the U.S. Department of Agriculture, National Agricultural Statistics Service.

"Person" means any individual, corporation, company, society, or association or other organized group.

"Regulated area" means any state or country in which the boll weevil is known to exist or areas where circumstances make it reasonable to believe that the boll weevil is present.

"Scientific permit" means a document issued by the Virginia Department of Agriculture and Consumer Services to authorize movement of regulated articles to a specified destination for scientific purposes.

"Seed cotton" means cotton as it comes from the field prior to ginning.

"Used cotton harvesting equipment" means equipment previously used to harvest, strip, transport or destroy cotton.

"Waybill" means a document containing the details of a shipment of goods.

2VAC5-440-40. Requirements for program participation.

A. All cotton farm operators in Virginia are hereby required to participate in the eradication/exclusion program Boll Weevil Eradication and Exclusion Program. Participation shall include timely reporting of acreage and field locations, compliance with regulations, and payment of fees. Farm operators within the Commonwealth shall be notified through either the extension offices, the department, FSA, or newspapers of their program costs on a per acre basis on or before April 1 of each year. The department shall notify farm operators of their program costs on a per acre basis. The following procedures are required for participation in the program:

1. Completing a Cotton Acreage Reporting Form at Report cotton acreage and cotton field location or locations to the FSA office by July 1 of the current growing season for which participation is required. At this time the farm operator shall pay a nonrefundable fee in an amount sufficient to cover estimated program costs as determined by the commissioner. The commissioner shall set this fee following consultation with state, federal, and private organizations responsible for implementation and funding of boll weevil eradication/exclusion programs conducted in the Commonwealth. Such fee shall be based upon prior year's expenses and projected cotton acreage for the current growing season. Those farm operators not reporting their acreage by July 1 will not be considered as program participants and will be subject to a penalty. Any farm operator who does not report his cotton acreage and cotton field location or locations by July 1 will not be considered a program participant and may be subject to a penalty of 10% of the fee due for his unreported cotton acreage.

2. All fees shall be paid by the farm operator. A farm operator shall pay a nonrefundable fee in an amount sufficient to cover estimated program costs as determined by the commissioner. Fees shall be made payable to Treasurer of Virginia and collected by FSA and must be paid within 30 days of the invoice date. The commissioner shall set this fee following consultation with state, federal, and private organizations responsible for the implementation and funding of the Boll Weevil Eradication and Exclusion Program conducted in the Commonwealth.

3. Noncommercial cotton Cotton grown for noncommercial purposes shall not be planted in Virginia unless the grower applies for and receives an exemption to grow cotton from the commissioner. Applications, in writing, shall be made in writing to the Program Manager, Office of Plant and Pest Services, 1100 Bank Street, Room 703, Richmond, VA 23219 commissioner, stating the conditions under which the grower requests such exemption. The decision whether all or part of these requirements shall be exempted shall be based on the following:

a. Location of growing area;

b. Size of growing area;

c. Pest conditions in the growing area;

d. Accessibility of growing area;

e. Any stipulations set forth in a compliance agreement between the individual and the Department of Agriculture and Consumer Services department that are necessary for the effectuation of the program.

B. Farm operators A farm operator whose FSA measured acreage, as determined by FSA, exceeds the grower reported acreage that was reported by the farm operator by more than 10%, shall be assessed an additional $5.00 per acre a penalty of 10% of the fee due on that acreage in excess of the reported acreage.

C. A farm operator may apply for a waiver requesting delayed payment under conditions of financial hardship. Any farm operator applying for a waiver shall make application in writing to the Program Manager, Office of Plant and Pest Services, 1100 Bank Street, Richmond, VA 23219 commissioner stating the reason a waiver is necessary. This request must be accompanied by a financial statement from a state or federally chartered bank or lending agency supporting such request. The decision of whether to waive all or part of these additional assessments or payment dates shall be made by the program manager and notification given to the farm operator within two weeks after receipt of such application. The commissioner's decision whether to delay payment shall be based on, but not limited to, the following: (i) meteorological conditions, (ii) economic conditions, and (iii) any other uncontrollable destructive forces. If a waiver is granted, payment shall be due at the time the cotton is sold, or by December 1 within 30 days of the invoice date, whichever is sooner later.

D. Failure to pay all fees on or before July 1 within 30 days of the invoice date will result in a penalty of $5.00 per acre 10% of the total fee due. Failure by a farm operator to pay all program costs by August 1 within 30 days of the invoice date shall be a violation of The Virginia Cotton Boll Weevil Quarantine this chapter. If such farm operator fails to comply with these regulations this chapter, the Commissioner of Agriculture and Consumer Services commissioner, through his duly authorized agents, may proceed to trap all cotton acreage found in violation and initiate actions to recover all trapping program costs through established policies and procedures identified in the Virginia Debt Collection Act (§ 2.2-4800 et seq. of the Code of Virginia).

E. Acreage subject to emergency or hardship conditions after all the growers' share of the program have been paid and prior to the initiation of field operations may be considered for a refund. The refund amount will be determined by the actual program cost per acre up to the time of emergency or hardship.

F. E. The commissioner may purchase growing cotton when he deems it in the best interest of the program, provided that the funding necessary to purchase the cotton is available. Purchase price shall be based on the FSA farm established yield for the current year an average of the previous five years of cotton yield figures, as determined by NASS, for the locality in which the growing cotton that may be purchased by the commissioner is located.

G. F. If necessary to prevent boll weevil reinfestation of the Commonwealth, the farm operator, upon notification by the commissioner, shall completely destroy all cotton determined to threaten that the commissioner deems to pose a threat to the safety of Virginia's cotton industry. If such farm operator fails to comply with these regulations this chapter, the Commissioner of Agriculture and Consumer Services commissioner, through his duly authorized agents, shall proceed to destroy such cotton and shall compute the actual costs of labor and materials used, and the farm operator shall pay to the commissioner such assessed costs. No damage damages shall be awarded the grower of such cotton for entering thereon his cotton field and destroying any cotton when done by the order of the commissioner.

2VAC5-440-50. Conditions governing the issuance of certificates and permits to allow the movement of regulated articles.

A. Certificates shall be issued by an authorized inspector for movement of the regulated articles designated in 2VAC5-440-30 under any of the following conditions when:

1. In the judgment of the authorized inspector, they have not been exposed to boll weevil in any living stage.

2. They have been examined by the authorized inspector and found to be free of boll weevil in any living stage.

3. They have been treated to destroy boll weevil, under the observation of the authorized inspector, according to methods selected by him from procedures known to be effective under the conditions in which applied.

4. Grown, produced, stored, or handled in such manner that, in the judgment of the authorized inspector, no boll weevil would be transmitted.

B. Limited permit. Limited permits may be issued by an authorized inspector for the movement of noncertified regulated articles specified under 2VAC5-440-30 to specified destinations for limited handling, use, processing, or treatment, when he determines that no hazard of spread of the boll weevil exists.

C. Special permits. Special permits may be issued by the Virginia Department of Agriculture and Consumer Services department to allow the movement of boll weevil in any living stage and any other regulated articles for scientific purposes, under conditions prescribed in each specific case.

D. Compliance agreement. Compliance agreements for the movement of regulated articles may be issued by an authorized inspector. As a condition of receiving a certificate or limited permit for the movement of regulated articles, A compliance agreement may be issued to any person engaged in purchasing, assembling, exchanging, handling, processing, utilizing, treating, or moving such a regulated article may be required to sign a compliance agreement. The A compliance agreement shall stipulate that include the required safeguards against the establishment and spread of infestation will be maintained and will comply with the conditions governing the maintenance of identity, the handling, and the subsequent movement of such regulated articles, and the cleaning and treatment of means of conveyance and containers.

E. Use of certificates or permits with shipments. If a certificate or permit is required for the movement of regulated articles, the regulated articles are required to have a certificate or permit attached when offered for movement. If a certificate or permit is attached to the invoice or way-bill waybill, and the articles are adequately described on the certificate, the attachment of a certificate or limited permit to the regulated article will not be required. Certificates or permits attached to the invoice, way-bill waybill, or other shipping document, shall be given by the carrier to the consignee at the destination of the shipment, or to an inspector when requested.

F. Assembly of articles for inspection. Persons intending to move any regulated articles shall apply for inspection as far in advance as possible. They shall safeguard the articles from infestation. The articles shall be assembled at a place and in a manner designated by the inspector to facilitate inspection.

G. Disposition of certificates and permits. In all cases, certificates and permits shall be furnished by the carrier to the consignee at the destination of the shipment.

2VAC5-440-110. Determination of reasonableness of costs for services, products, or articles.

The commissioner, pursuant to § 3.2-711 of the Code of Virginia, may determine that costs for services, products, or articles that shall be paid by the persons affected when the commissioner determines that those services, products, or articles are beyond the reasonable scope of administering the law Virginia Tree and Crop Pests Law (§ 3.2-700 et seq. of the Code of Virginia).

FORMS (2VAC5-440)

Cotton Acreage Reporting Form (rev. 3/99).