[Federal Register Volume 67, Number 49 (Wednesday, March 13, 2002)]
[Rules and Regulations]
[Pages 11213-11215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5939]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV01-966-2 FIR]


Tomatoes Grown in Florida; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule which decreased the 
assessment rate established for the Florida Tomato Committee 
(Committee) for the 2001-02 and subsequent fiscal periods from $0.025 
to $0.02 per 25-pound container of tomatoes handled. The Committee 
locally administers 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: April 12, 2002.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist, 
Southeast Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 799 Overlook Drive, 
Winter Haven, FL 33884; telephone: (863) 324-3375, Fax: (863) 325-8793; 
or George Kelhart, Technical Advisor, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or e-mail: [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 order is effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
    USDA 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 tomatoes 
beginning August 1, 2001, 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 USDA 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 USDA 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 USDA'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 Committee for the 2001-02 and subsequent fiscal periods from $0.025 
to $0.02 per 25-pound container of tomatoes handled.
    The Florida tomato marketing order provides authority for the 
Committee, with the approval of USDA, 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 1999-2000 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on September 6, 2001, and unanimously recommended 
2001-02 expenditures of $1,666,650 and an assessment rate of $0.02 per 
25-pound container of tomatoes. In comparison, last year's budgeted 
expenditures were $1,910,000. The

[[Page 11214]]

assessment rate of $0.02 is $0.005 lower than the rate previously in 
effect. The Committee's authorized reserve is larger than necessary. In 
an effort to reduce the amount in the reserve fund, the Committee 
unanimously recommended reducing the assessment rate.
    The major expenditures recommended by the Committee for the 2001-02 
fiscal year include $700,000 for education and promotion, $418,650 for 
salaries and benefits, $320,000 for research, $51,500 for employee 
retirement, and $31,000 for office rent. Budgeted expenses for these 
items in 2000-01 were $1,000,000, $407,800, $315,700, $44,900, and 
$24,500, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Florida 
tomatoes, while considering other factors such as the current balance 
in the reserve fund. Tomato shipments for the year are estimated at 
50,000,000 25-pound containers which should provide $1,000,000 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 
$1,900,000) will be kept within the maximum permitted by the order 
(approximately one fiscal period's expenses, Sec. 966.44).
    The assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by USDA 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA 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 2001-02 budget and those 
for subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

Final Regulatory Flexibility Analysis

    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 100 producers of tomatoes in the production 
area and approximately 82 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (13 CFR 121.201) as those having annual 
receipts less than $750,000, 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, the average annual price 
for fresh Florida tomatoes during the 2000-01 season was $9.16 per 25-
pound container or equivalent, and total fresh shipments for the 2000-
01 season were 53,649,508 25-pound equivalent cartons of tomatoes. 
Committee data indicates that approximately 21 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 2000-01 season, and the 2000-01 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 2001-02 and 
subsequent fiscal periods from $0.025 to $0.02 per 25-pound container 
of tomatoes. The Committee unanimously recommended 2001-02 expenditures 
of $1,666,650 and an assessment rate of $0.02 per 25-pound container. 
The assessment rate of $0.02 is $0.005 lower than the 2000-01 rate. The 
quantity of assessable tomatoes for the 2001-02 season is estimated at 
50,000,000 25-pound cartons. Thus, the $0.02 rate should provide 
$1,000,000 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 2001-02 
fiscal year include $700,000 for education and promotion, $418,650 for 
salaries and benefits, $320,000 for research, $51,500 for employee 
retirement, and $31,000 for office rent. Budgeted expenses for these 
items in 2000-01 were $1,000,000, $407,800, $315,700, $44,900, and 
$24,500, respectively.
    In the past two seasons, assessments collected have exceeded 
budgeted expenses, primarily due to a larger than expected supply of 
tomatoes. This has increased the total in the reserve. In addition, the 
Committee voted to reduce the education and promotion budget for the 
2001-02 season, reducing total recommended expenses by approximately 
$300,000. The authorized reserve fund is now larger than necessary. In 
an effort to reduce the amount in the reserve fund and considering the 
reduced budget, 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 2001-02 fiscal year.
    The Committee reviewed and unanimously recommended 2001-02 
expenditures of $1,666,650 which included decreases in office rent, 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 $0.02 per 25-pound container of assessable tomatoes 
was then determined by dividing the total recommended budget by the 
quantity of assessable tomatoes, while considering other factors such 
as the current balance in the reserve fund. Estimated shipments of 
tomatoes are 50,000,000 25-pound containers for the 2001-02 fiscal 
period. At the recommended rate, $1,000,000 in assessment income will 
be collected. This is approximately $600,000 below the anticipated 
expenses, which the Committee determined to be acceptable, in view of 
its goal of reducing its operating reserve.
    A review of historical information and preliminary information 
pertaining to the upcoming season indicates that the grower price for 
the 2001-02 season could range from $4.25 and $13.53 per 25-pound 
container of tomatoes.

[[Page 11215]]

Therefore, the estimated assessment revenue for the 2001-02 season as a 
percentage of total grower revenue could range between 1.5 and 4.7 
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 
6, 2001, 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.
    USDA 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 November 9, 2001, (66 FR 56599). 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 and USDA. A 60-day comment period 
was provided for interested persons to respond to the interim final 
rule. The comment period ended on January 8, 2002, 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: 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.

PART 966--TOMATOES GROWN IN FLORIDA

    Accordingly, the interim final rule amending 7 CFR part 966 which 
was published at 66 FR 56599 on November 9, 2001, is adopted as a final 
rule without change.

    Dated: March 7, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-5939 Filed 3-12-02; 8:45 am]
BILLING CODE 3410-02-P