[Federal Register Volume 64, Number 205 (Monday, October 25, 1999)]
[Rules and Regulations]
[Pages 57361-57363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27742]



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  Federal Register / Vol. 64, No. 205 / Monday, October 25, 1999 / 
Rules and Regulations  

[[Page 57361]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV99-966-1 IFR]


Tomatoes Grown in Florida; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
Florida Tomato Committee (Committee) for the 1999-2000 and subsequent 
fiscal periods from $0.03 per 25-pound container to $0.025 per 25-pound 
container of tomatoes handled. The Committee is responsible for local 
administration of the marketing order which regulates the handling of 
tomatoes grown in Florida. Authorization to assess tomato handlers 
enables the Committee to incur expenses that are reasonable and 
necessary to administer the program. The fiscal period began August 1 
and ends July 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: October 26, 1999. Comments received by December 27, 1999, will 
be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail: 
[email protected]. Comments should reference the docket number 
and the date and page number of this issue of the Federal Register and 
will be available for public inspection in the Office of the Docket 
Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing 
Field Office, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276, 
Winter Haven, FL 33883-2276; telephone: (941) 299-4770, Fax: (941) 299-
5169; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 720-
2491, Fax: (202) 720-5698. Small businesses may request information on 
complying with this regulation by contacting Jay Guerber, Marketing 
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 
PO Box 96456, room 2525-S, Washington, DC 20090-6456; telephone (202) 
720-2491, Fax: (202) 720-5698, or E-mail: Jay.G[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 125 and Order No. 966, both as amended (7 CFR part 966), 
regulating the handling of tomatoes grown in Florida, hereinafter 
referred to as the ``order.'' The marketing agreement and order are 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, Florida tomato 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rate 
as issued herein will be applicable to all assessable Florida tomatoes 
beginning August 1, 1999, and continue until amended, suspended, or 
terminated. 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 request a modification of the order or to be exempted 
therefrom. Such handler is afforded the opportunity for a hearing on 
the petition. After the 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 to review the 
Secretary's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.
    This rule deceases the assessment rate established for the Florida 
Tomato Committee for the 1999-2000 and subsequent fiscal periods from 
$0.03 per 25-pound container to $0.025 per 25-pound container of 
tomatoes.
    The Florida tomato marketing order provides authority for the 
Committee, with the approval of the Department, to formulate an annual 
budget of expenses and collect assessments from handlers to administer 
the program. The members of the Committee are producers of Florida 
tomatoes. They are familiar with the Committee's needs and with the 
costs for goods and services in their local area and are thus in a 
position to formulate an appropriate budget and assessment rate. The 
assessment rate is formulated and discussed in a public meeting. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 1996-97 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by the Secretary upon recommendation and 
information submitted by the Committee or other information available 
to the Secretary.
    The Committee met on September 10, 1999, and unanimously 
recommended 1999-2000 expenditures of $2,088,900 and an assessment rate 
of $0.025 per 25-pound container of tomatoes. In comparison, last 
year's budgeted expenditures were $1,926,000. The assessment rate of 
$0.025 is $0.005 lower than the rate currently in effect. For the 
previous fiscal period, the Committee had planned to use funds from its 
authorized reserves to cover some of its approved expenses. The

[[Page 57362]]

reserve fund was larger than the Committee believed it needed for 
program operations. However, there was a larger than expected supply of 
assessable tomatoes during 1998-99, and instead of the reduction, the 
amount in the reserve fund increased. In another effort to reduce the 
amount in the reserve fund, the Committee unanimously recommended 
reducing the assessment rate and using reserve funds to pay some of its 
operating expenses.
    The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $436,000 for salaries, $241,000 for 
research, $1,000,000 for education and promotion, and $150,000 for 
Market Access Program export promotion. Budgeted expenses for these 
items in 1998-99 were $364,000, $212,000, $900,000, and $200,000 
respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Florida 
tomatoes. Tomato shipments for the year are estimated at 50,000,000 25-
pound containers which should provide $1,250,000 in assessment income. 
Income derived from handler assessments, along with interest income and 
funds from the Committee's authorized reserve, will be adequate to 
cover budgeted expenses. Funds in the reserve (currently $1,879,557) 
will be kept within the maximum permitted by the order (Sec. 966.44; 
approximately one fiscal period's expenses).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the 
Committee or other available information.
    Although this assessment rate is effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department will 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking will be undertaken as necessary. The Committee's 
1999-2000 budget and those for subsequent fiscal periods will be 
reviewed and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    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 the 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 75 producers of tomatoes in the production 
area and approximately 65 handlers subject to regulation under the 
marketing order. Small agricultural producers have been defined by the 
Small Business Administration (13 CFR 121.601) as those having annual 
receipts less than $500,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $5,000,000.
    Based on the industry and committee data for the 1998-99 season, 
the average annual f.o.b. price for fresh Florida tomatoes during the 
1998-99 season was around $7.17 per 25-pound container, and total fresh 
shipments for the 1998-99 season are estimated at 56.7 million 25-pound 
containers of tomatoes. Committee data indicates that approximately 20 
percent of the Florida handlers handle 80 percent of the total volume 
shipped outside the regulated area. Based on this information, the 
shipment information for the 1998-99 season, and the 1998-99 season 
average price, the majority of handlers would be classified as small 
entities as defined by the SBA. The majority of producers of Florida 
tomatoes also may be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 1999-2000 and subsequent 
fiscal periods from $0.03 per 25-pound container to $0.025 per 25-pound 
container of tomatoes. The Committee unanimously recommended 1999-2000 
expenditures of $2,088,900 and an assessment rate of $0.025 per 25-
pound container. The assessment rate of $0.025 is $0.005 lower than the 
1998-99 rate. The quantity of assessable tomatoes for the 1999-2000 
season is estimated at 50,000,000. Thus, the $0.025 rate should provide 
$1,250,000 in assessment income. Income derived from handler 
assessments, along with interest income and funds from the Committee's 
authorized reserve, will be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 1999-
2000 year include $436,000 for salaries, $241,000 for research, 
$1,000,000 for education and promotion, and $150,000 for Market Access 
Program export promotion. Budgeted expenses for these items in 1998-99 
were $364,000, $212,000, $900,000 and $200,000, respectively.
    For the 1998-99 fiscal period, the Committee decided to use reserve 
funds to cover some of its authorized expenses. The reserve fund was 
larger than the Committee believed it needed for program operations. 
However, there was a larger than expected supply of assessable tomatoes 
in 1998-99, and instead of the anticipated reduction, the amount in the 
reserve fund increased. In another effort to reduce the amount in the 
reserve fund, the Committee unanimously recommended reducing the 
assessment rate. The funds collected from assessments, along with money 
from the reserve fund will be adequate to cover the Committee's 
expenditures for the 1999-2000 fiscal year. Pursuant to Sec. 966.44, 
the Committee is authorized to maintain an operating reserve not to 
exceed approximately one fiscal period's expenses.
    The Committee reviewed and unanimously recommended 1999-2000 
expenditures of $2,088,900 which included increases in salaries, 
research, and education and promotion programs. Prior to arriving at 
this budget, the Committee considered information from various sources, 
such as the Committee's Executive Subcommittee, Finance Subcommittee, 
Research Subcommittee, and Education and Promotion Subcommittee. 
Alternative expenditure levels were discussed by these groups, based 
upon the relative value of various research projects to the tomato 
industry. The assessment rate of $0.025 per 25-pound container of 
assessable tomatoes was then determined by dividing the total 
recommended budget by the quantity of assessable commodity, estimated 
at 50,000,000 25-pound containers for the 1999-2000 fiscal period. This 
is approximately $624,900 below the anticipated expenses, which the 
Committee determined to be acceptable as a means of reducing its 
operating reserves.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 1999-2000 season could range between $6.09 and

[[Page 57363]]

$9.70 per 25-pound container of tomatoes. Therefore, the estimated 
assessment revenue for the 1999-2000 fiscal period as a percentage of 
total grower revenue could range between .26 and .41 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the Florida tomato industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the September 
10, 1999, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large Florida tomato handlers. As with 
all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
speciality crop marketing agreements and orders may be viewed at the 
following web site: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) The 1999-2000 fiscal period began on August 1, 
1999, and the marketing order requires that the rate of assessment for 
each fiscal period apply to all assessable tomatoes handled during such 
fiscal period; (2) this action decreases the assessment rate for 
assessable tomatoes beginning with the 1999-2000 fiscal period; (3) 
handlers are aware of this action which was unanimously recommended by 
the Committee at a public meeting and is similar to other assessment 
rate actions issued in past years; and (4) this interim final rule 
provides a 60-day comment period, and all comments timely received will 
be considered prior to finalization of this rule.

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

    1. The authority citation for 7 CFR part 966 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Section 966.234 is revised to read as follows:


Sec. 966.234  Assessment rate.

    On and after August 1, 1999, an assessment rate of $0.025 per 25-
pound container is established for Florida tomatoes.

    Dated: October 18, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-27742 Filed 10-22-99; 8:45 am]
BILLING CODE 3410-02-P