[Federal Register Volume 59, Number 246 (Friday, December 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31612]


[[Page Unknown]]

[Federal Register: December 23, 1994]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV94-966-1FIR]

 

Tomatoes Grown in Florida; Amendment of Rules and Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, without change, the provisions of an interim final rule 
which clarified registered handler application and approval procedures 
and the Florida Tomato Committee's (committee) authority to cancel a 
handler's certificate of registration for good cause. That rule also 
clarified that only registered handlers of Florida tomatoes may ship 
such tomatoes in interstate commerce. The interim final rule also added 
special purpose shipment outlets, redefined one of those outlets, and 
brought the order's special purpose shipment provisions into conformity 
with each other. Finally, that rule provided that handlers must report 
packout information on a daily basis to the committee or an authorized 
agent of the committee. Continuation of these changes is expected to 
enhance compliance with the order.

EFFECTIVE DATE: January 23, 1995.

FOR FURTHER INFORMATION CONTACT: Aleck Jonas, Marketing Specialist, 
Southeast Marketing Field Office, Fruit and Vegetable Division, AMS, 
USDA, P.O. Box 2276, Winter Haven, Florida 33883-2276; (813) 299-4770 
or FAX (813) 299-5169, or Shoshana Avrishon, Marketing Specialist, 
Marketing Order Administration Branch, Fruit and Vegetable Division, 
AMS, USDA, Room 2523-S., P.O. Box 96456, Washington, DC 20090-6456; 
telephone: (202) 720-3610, or FAX (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement and Order No. 966 [7 CFR part 966], both as amended, 
regulating the handling of tomatoes grown in Florida. The order is 
authorized by the Agricultural Marketing Agreement Act of 1937, as 
amended [7 U.S.C. 601-674], hereinafter referred to as the ``Act.''
    The Department is issuing this rule in accordance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform and is not intended to have retroactive effect. This 
rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and requesting a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After a hearing the Secretary would rule on the petition. The 
Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction in equity to review the 
Secretary's ruling on the petition, provided a bill in equity is filed 
not later than 20 days after the date of entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this rule on small 
entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 50 handlers of Florida tomatoes subject to 
regulation under the marketing order and approximately 250 producers in 
the production area. Small agricultural service firms, including tomato 
handlers, are defined by the Small Business Administration [13 CFR 
121.601] as those whose annual receipts are less than $5,000,000, and 
small agricultural producers have been defined as those having annual 
receipts of less than $500,000. The majority of the tomato handlers and 
producers may be classified as small entities.
    This rule finalizes an interim final rule that added a daily 
packout report and special purpose shipment outlets, redefined one of 
those outlets, and brought the order's special purpose shipment 
provisions into conformity with each other. That rule clarified 
registered handler application and approval procedures and the Florida 
Tomato Committee's (committee) authority to cancel a handler's 
certificate of registration for good cause. That rule also clarified 
that only registered handlers of Florida tomatoes may ship such 
tomatoes in interstate commerce. These changes were unanimously 
recommended by the committee. In addition, the Department made 
conforming changes.
    The interim final rule was published in the Federal Register [59 FR 
51087, October 7, 1994], with an effective date of October 7, 1994. The 
rule amended Secs. 966.113, 966.120, and 966.323. Interested persons 
were invited to submit written comments until November 7, 1994. Three 
comments were received in support of the changes.
    On May 31, 1994, the committee met to discuss the difficulty it had 
experienced in collecting assessments from a few handlers and in 
receiving complete, up-to-date packout information from some handlers. 
The committee recommended several modifications to the order's existing 
rules and regulations to improve these situations.

Handler Certification

    Pursuant to Sec. 966.323 Handling regulation, fresh market 
shipments of tomatoes by handlers to points outside the regulated area 
must meet grade, size, inspection, and container requirements. Fresh 
market shipments within the regulated area are not subject to such 
requirements. Fresh market shipments within and outside the regulated 
area are subject to assessments. The regulated area is defined as the 
portion of the State of Florida which is bounded by the Suwannee River, 
the Georgia Border, the Atlantic Ocean, and the Gulf of Mexico. 
Basically, it is the entire State of Florida, except the Panhandle. The 
production area is part of the regulated area.
    Under Sec. 966.113 Registered handler, and for the purpose of this 
order, registered handlers are persons who have adequate facilities for 
grading tomatoes for market and who assume initial responsibility for 
compliance with inspection, assessment, reporting, and other regulatory 
requirements concerning tomatoes grown in the production area. Any 
person who wishes to become a registered handler is required to make an 
application for registration with the committee on forms prescribed by, 
and available at the principle office of, the committee. If the 
applicant has facilities which are determined by the committee as 
adequate for grading tomatoes, the applicant may be approved as a 
registered handler. ``Adequate facilities'' had been defined as those 
being in a permanent location with nonportable equipment for the proper 
grading, sizing and packing of tomatoes. The committee recommended two 
minor additions to the definition: (1) The term ``washing'' was added 
to the definition, as that activity is an integral part of the handling 
process; and (2) the phrase ``grown in the production area'' was added 
at the end of the definition to further identify the tomatoes being 
handled. These changes were implemented by the interim final rule.
    Most tomatoes produced in Florida are shipped fresh to markets 
outside the regulated area. The committee's goal is to avoid marketing 
problems associated with poor quality tomato shipments. The industry 
has spent substantial sums of money to promote Florida tomatoes to the 
trade and consumers. Such expenditures are predicated on the shipment 
by handlers of good quality tomatoes, which buyers have come to expect 
from Florida.
    The committee reported that it had been difficult to collect 
assessments from some handlers in the past. One handler indicated no 
intention of paying assessments this year. Because of these compliance 
difficulties, and to foster shipments of good quality tomatoes, the 
committee recommended changes in the rules and regulations to 
strengthen the registered handler procedures, clarify handler 
responsibilities under the order, and enhance the committee's 
compliance capabilities.
    The committee recommended amending Sec. 966.113 and adopting new 
provisions which: (1) Established that registered handlers must be 
certified by the committee; (2) provided the committee with the 
authority, criteria, and procedures for approving registered handler 
certifications and for cancelling such certifications for failure to 
pay assessments or provide reports to the committee; and (3) allowed 
only registered handlers to lawfully ship tomatoes outside of the 
regulated area. After considering the committee's recommendations, the 
Department determined that the changes were necessary to effectuate the 
declared policy of the Act.
    New Sec. 966.113 contained an introductory statement explaining the 
criteria that a handler must meet to be registered under the order. 
These provisions include having adequate facilities and being certified 
by the committee as a registered handler, handling tomatoes in 
compliance with order requirements, obtaining inspection, submitting 
required reports, and paying applicable assessments. Four of these 
provisions were specified in Sec. 966.113. The provisions for 
certification as a registered handler and submission of reports were 
added to Sec. 966.113 to help the committee with its compliance 
responsibilities and improve marketing assistance provided to handlers 
under the order.
    New paragraph (a) established qualifications for registered handler 
certification. The committee or its duly authorized agent inspects 
handling facilities to determine if those facilities meet the 
requirements for certification. The facilities must be located in the 
regulated area and be permanent, nonportable buildings. The equipment 
in the facilities must also be nonportable and capable of properly 
washing, grading, sizing, and packing tomatoes grown in the production 
area. These requirements were the same as those in the former 
definition for Adequate facilities in paragraph (e) of Sec. 966.323, 
with the addition of washing as an activity and the reference to where 
the tomatoes are produced. The definition was removed from paragraph 
(e) of Sec. 966.323 and, as modified, added to new paragraph (a) of 
Sec. 966.113 to define, in the appropriate place in the rules and 
regulations, the kind of facilities and equipment needed for 
certification as a registered handler.
    New paragraph (b) of Sec. 966.113 specified the information 
requested by the committee in the application for registered handler 
certification. The information requested is common business 
identification information.
    New paragraph (c) of Sec. 966.113 provided that the committee or an 
agent of the committee make the determination that an applicant's 
facilities meet requirements. Such certification is made in writing by 
the committee. Denial of certification, and the basis thereof, is also 
made in writing to the applicant by the committee.
    New paragraph (d) of Sec. 966.113 established criteria for 
cancellation of a registered handler's certification, with the approval 
of the Secretary, based on failure to pay assessments on a timely basis 
and failure to provide required reports. A registered handler's 
certification is also subject to cancellation, with the approval of the 
Secretary, if the handler no longer has adequate facilities, as that 
term is defined in Sec. 966.113(a). A cancelled certification is 
reinstated once a handler demonstrates compliance with assessment, 
reporting and facility requirements. New paragraph (d) also included 
the exemption, currently in Sec. 966.113, concerning persons who make 
deliveries of ungraded tomatoes to handling facilities.
    New paragraph (e) of Sec. 966.113 provided that any inspection 
certificate of tomatoes offered for inspection by a non-registered 
handler contains a statement to that effect. The inspection certificate 
for all such tomato lots reads ``Fails to meet the requirements of 
Marketing Order No. 966 because the handler is not a registered 
handler.'' Such failing certificate is issued, regardless of the grade, 
size, or containerization of the tomatoes inspected. The committee 
keeps the Federal State Inspection Service (inspection service) abreast 
of all handlers' status. Any handler who is denied a registered handler 
certificate or who has a registered handler certificate cancelled, may 
appeal to the committee for reconsideration. Such appeal must be made 
in writing.
    The Florida Road Guard Bureau of the Florida Department of 
Agriculture and Consumer Services releases tomato shipments for 
interstate commerce only if the inspection certificates indicate that 
such shipments meet marketing order requirements. Thus, persons or 
handlers not certified as a registered handler by the committee will 
not be able to ship tomatoes outside the regulated area.
    The committee recommended that this provision be included under a 
separate title and paragraph. Because inspection certification is 
dependent on handler certification, the Department included this 
recommendation as part of the new provision on certified registered 
handlers in Sec. 966.113. For emphasis and to provide consistency in 
regulations, the Department also added this requirement to paragraph 
(a)(4) Inspection. in Sec. 966.323.
    Section 966.113 provides that handlers must pay assessments on a 
timely basis to maintain their registered handler certification. For 
emphasis and to provide consistency in regulations, the Department also 
added this requirement as new paragraph (e) Assessments. under 
Sec. 966.323.

Certificates of Privilege

    The committee recommended changing an incorrect citation in the 
first sentence of Sec. 966.120 Application for Certificate of Privilege 
which incorrectly referred to Sec. 966.53 of the order. The committee 
stated that the intent of the section is to require Certificates of 
Privilege for special purpose shipments authorized in Sec. 966.54 
Shipments for special purposes. Thus, Sec. 966.54 was referenced in the 
first sentence of Sec. 966.120. This adjustment did not change former 
practices as the committee's use of Certificates of Privilege is 
consistent with Sec. 966.54 of the order.
    The interim final rule also changed Sec. 966.120 to be consistent 
with the outlets specified in Sec. 966.323 Handling regulations. One 
outlet currently specified in Sec. 966.120 was changed and three new 
outlets were added. The term ``processing'' replaced the term 
``canning'' to make the regulations consistent with current industry 
practice. Pickling, experimental purposes and export, which were 
specified in Sec. 966.323(b), are added to Sec. 966.120. The committee 
also proposed that it have the authority, with the Secretary's 
approval, to add other outlets to meet changing food technologies and 
services which could benefit from receiving tomatoes shipped under 
Certificate of Privilege. This authority was added to Sec. 966.120.
    The Department made conforming changes to paragraph (b) of 
Sec. 966.323 to make that paragraph consistent with the changes to 
Sec. 966.120. The term ``canning'' was changed to ``processing'' and 
committee authority to add special purpose outlets, with the 
Secretary's approval, was added.
    The Department also added a definition for ``processing'' to 
paragraph (e) Sec. 966.323 Definitions. ``Processing'' was defined as 
the manufacture of any tomato product which has been converted into 
juice, or preserved by any commercial process, including canning, 
dehydrating, drying, and the addition of chemical substances. Also, 
paragraph (e) of Sec. 966.323 was redesignated as paragraph (g).

Packout Reports

    The committee also recommended that all handlers be required to 
present daily packout reports to the inspection service. The inspection 
service collects these reports from most handlers for inspection 
billing purposes and sends a daily packout report to the committee.
    All handlers maintain records of their daily packout activity based 
on the grade, size, and containers of tomatoes handled. The inspection 
service collects this data at the end of each work day for inspection 
billing purposes. As a service to the committee and tomato handlers, 
the inspection service compiles this information (received from its 
various inspectors) and reports it to the committee at the end of the 
day or the following morning. The committee compiles this data into a 
daily, industry-wide, packout report. The report is considered an 
indispensable tool for handlers to assess daily tomato market 
conditions and is disseminated, upon request, to registered handlers.
    However, some handlers had failed to provide their packout data to 
the inspection service on a timely basis to allow inclusion of the 
handler's data in each daily, industry-wide report. To be a useful 
tool, the industry-wide report must be accurate and include, to the 
extent possible, the total industry packout. Because the report is such 
a valuable marketing tool for handlers, the committee voted unanimously 
to propose that each registered handler be required to report the 
handler's daily packout data to the inspection service in a timely 
manner.
    The packout data that handlers provide to the inspection service, 
to the committee directly, or to another agent of the committee is data 
that is routinely compiled by each handler as part of the handler's 
normal, daily operating records. The reporting deadline of the end of 
the working day, as designated by the committee, has not presented an 
undue burden on handlers because the data requested is routinely 
recorded by handlers at the end of each working day. Individual handler 
data collated and disseminated in an industry-wide report has not 
disclosed confidential information or the business position of 
individual handlers.
    The committee recommended that this change be added to the rules 
and regulations as a separate, new number, title and paragraph. 
However, because the new provision established a reporting requirement 
on handlers, the Department inserted the provision as a separate, new 
paragraph under Sec. 966.323. Thus, a new paragraph (e) was added to 
the handling regulation and former paragraph (e) Definitions. was 
redesignated as paragraph (g).

Assessments

    Finally, the committee recommended that a clarification be added to 
the rules and regulations to clearly state that handlers must pay 
assessments to maintain their certification as registered handlers. 
Failure of some handlers to pay their assessments places an unfair 
burden upon those handlers who comply with order requirements. The 
Department added this clarification to Sec. 966.323 Handling regulation 
because payment of assessments is a requirement of handlers under the 
order. A new paragraph (f) Assessments. was added to Sec. 966.323. This 
paragraph stated that failure of a registered handler to pay 
assessments in a timely manner will result in cancellation of the 
registered handler's status, thus making that handler ineligible to 
ship tomatoes outside of the regulated area. Current committee 
collection procedures are:
    (1) Weekly assessment billings during the harvest season;
    (2) Payment within 30 days;
    (3) Followed by a demand letter specifying the end of a 15-day 
extended notice period; and
    (4) Referral to the Department for legal action. Under this rule, a 
handler who has not paid assessments after expiration of the extended 
notice period provided in the demand letter is considered out of 
compliance and is reported to the inspection service as a non-
registered handler.
    Based on the above, the Administrator of the AMS has determined 
that this final rule will not have a significant economic impact on a 
substantial number of small entities.
    In accordance with the Paper Work Reduction Act of 1980, [44 U.S.C. 
Chapter 35], the information collection requirements contained in the 
interim final rule were submitted to the Office of Management and 
Budget (OMB) for approval and assigned OMB No. 0581-0073. Because 
handlers complete a form to be certified as a registered handler, no 
additional OMB approval was needed for such registration. However, that 
rule provided that each registered handler, at the end of each day in 
which tomatoes were handled by the registered handler, furnish the 
committee or it's designated agent an accurate accounting of the number 
of tomato containers packed that day. This report provides the grade, 
size, and containers of tomatoes packed by the handler each packing 
day. Because the information is readily available from each day's 
packout, the report takes five minutes to complete. The committee needs 
this information to compile a daily packout report which is used by 
handlers in their marketing efforts. This provision is consistent with 
current industry practice. It is estimated that 50 handlers submit 
daily reports and receive marketing assistance during the marketing 
period October 10, through June 15 each year. The OMB approved this 
information collection request on November 18, 1994.
    After consideration of all relevant material presented, the 
information and recommendations submitted by the committee, and other 
information, it is found that finalizing the interim final rule, 
without change, as published in the Federal Register [59 FR 51087, 
October 7, 1994], will tend to effectuate the declared policy of the 
Act.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.

    For the reasons set forth in the preamble, 7 CFR part 966 is 
amended as follows:

PART 966--TOMATOES GROWN IN FLORIDA

    Accordingly, the interim final amending 7 CFR part 966 which was 
published at 59 FR 51087 on October 7, 1994, is adopted as a final rule 
without change.

    Dated: December 19, 1994.
Eric M. Forman,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-31612 Filed 12-22-94; 8:45 am]
BILLING CODE 3410-02-P