[Federal Register Volume 65, Number 10 (Friday, January 14, 2000)]
[Rules and Regulations]
[Pages 2281-2283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-978]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV99-966-1 FIR]


Tomatoes Grown in Florida; Decreased Assessment Rate

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 decreased 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.

EFFECTIVE DATE: February 14, 2000.

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: (863) 299-4770, Fax: (863) 299-
5169; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, P.O. 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, P.O. 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

[[Page 2282]]

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 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 continues to decrease 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 previously in effect. For the 
previous fiscal period (1998-99), the Committee had planned to use 
funds from its authorized reserves to cover some of its approved 
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 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 during 1999-2000.
    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 Assess 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 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 final 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 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 approximated 56.7 million 25-pound 
containers of tomatoes. Committee data indicates that approximately 20 
percent of the Florida

[[Page 2283]]

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 continues to decrease 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 25-pound 
containers. 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 Assess 
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 Florida 
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 1999-2000 fiscal period indicates that the grower 
price for 1999-2000 could range between $6.09 and $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 continues to decrease 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.
    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.
    An interim final rule concerning this action was published in the 
Federal Register on October 25, 1999 (64 FR 57361). Copies of that rule 
were also mailed or sent via facsimile to all tomato handlers. Finally, 
the interim final rule was made available through the Internet by the 
Office of the Federal Register. A 60-day comment period was provided 
for interested persons to respond to the interim final rule. The 
comment period ended on December 27, 1999, and no comments were 
received.
    A small business guide on complying with fruit, vegetable, and 
specialty 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.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.

Tomatoes Grown in Florida

    Accordingly, the interim final rule amending 7 CFR part 966 which 
was published at 64 FR 57361 on October 25, 1999, is adopted as a final 
rule without change.

    Dated: January 10, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-978 Filed 1-13-00; 8:45 am]
BILLING CODE 3410-02-P