[Federal Register Volume 68, Number 207 (Monday, October 27, 2003)]
[Proposed Rules]
[Pages 61146-61148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27014]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV03-966-4 PR]


Tomatoes Grown in Florida; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Florida Tomato Committee (Committee) for the 2003-2004 and 
subsequent fiscal periods from $.02 to $.025 per 25-pound container or 
equivalent 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 would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by November 26, 2003.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, 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, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing 
Field Office, Fruit and Vegetable Programs, AMS, USDA, 799 Overlook 
Drive, Suite A, Winter Haven, FL 33884-1671; 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.''
    The Department of Agriculture (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 proposed herein would be applicable to all assessable tomatoes 
beginning on August 1, 2003, 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

[[Page 61147]]

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 would increase the assessment rate established for the 
Committee for the 2003-04 and subsequent fiscal periods from $.02 to 
$.025 per 25-pound container or equivalent of tomatoes.
    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 2001-02 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 (68 
FR 15338, March 31, 2003; 66 FR 56599, November 9, 2001).
    The Committee met on September 4, 2003, and unanimously recommended 
2003-04 expenditures of $1,773,100 and an assessment rate of $0.025 per 
25-pound container of tomatoes. In comparison, last year's budgeted 
expenditures were $1,910,840. The assessment rate of $0.025 is $.005 
higher than the rate currently in effect. The number of assessable 
containers during 2003-04 is estimated to be 50 million and the 
recommended assessment rate would generate $1,250,000 in income. The 
Committee's financial reserve is now estimated to be $1,767,427 and is 
available to cover the deficit in assessment income. The increased 
assessment rate would allow the Committee to maintain its financial 
reserve at a level it deems appropriate.
    The major expenditures recommended by the Committee for the 2003-04 
fiscal period include $700,000 for education and promotions, $405,000 
for salaries, $320,000 for research, $49,000 for employee health 
insurance, and $61,000 for employee retirement. Budgeted expenses for 
these items in 2002-03 were $900,000 for education and promotion, 
$370,730 for salaries, $320,000 for research, $38,250 for employee 
health insurance, and $54,860 for employee retirement, respectively.
    The assessment rate recommended by the Committee was derived by 
examining anticipated expenses and expected shipments of Florida 
tomatoes and considering available reserves. As mentioned earlier, 
tomato shipments for the year are estimated at 50 million 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, would be adequate to cover budgeted expenses. Funds 
in the reserve currently total $1,767,427 and are within the maximum 
permitted by the order of not to exceed one fiscal period's expenses as 
stated in Sec.  966.44.
    The proposed assessment rate would 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 would be in effect for an indefinite 
period, the Committee would 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 would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2003-04 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

Initial 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 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 100 producers of tomatoes in the production 
area and approximately 80 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 industry and Committee data, the average annual price for 
fresh Florida tomatoes during the 2002-03 season was approximately 
$9.59 per 25-pound container or equivalent, and total fresh shipments 
for the 2002-03 season were 50,974,342 25-pound equivalent cartons of 
tomatoes. Committee data indicates that approximately 25 percent of the 
handlers handle 94 percent of the total volume shipped outside the 
regulated area. Based on the average annual price of $9.59 per 25-pound 
container, about 75 percent of handlers could be considered small 
businesses under SBA's definition. Therefore, the majority of handlers 
of Florida tomato handlers may be classified as small entities. It also 
is believed that the majority of Florida tomato producers may be 
classified as small entities. This rule would increase the assessment 
rate established for the Committee and collected from handlers for the 
2003-04 and subsequent fiscal periods from $0.02 to $0.025 per 25-pound 
container of tomatoes. The Committee unanimously recommended 2003-04 
expenditures of $1,773,100 and an assessment rate of $0.025 per pound 
container. The proposed assessment rate of $0.025 is $0.005 higher than 
the 2002-03 rate. The quantity of assessable tomatoes for the 2003-04 
season is estimated at 50 million 25-pound cartons. 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, would be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2003-04 
year include $700,000 for education and promotions, $405,000 for 
salaries, $320,000 for research, $49,000 for employee health insurance, 
and $54,860 for employee retirement. Budgeted expenses for these items 
in 2002-03 were $900,000 for education

[[Page 61148]]

and promotion, $370,730 for salaries, $320,000 for research, $38,250 
for employee health insurance, and $54,860 for employee retirement, 
respectively.
    As previously mentioned, the number of assessable containers during 
2003-04 is estimated to be 50 million and the recommended assessment 
rate would generate $1,250,000 in income. The Committee's financial 
reserve is now estimated to be $1,767,427 and is available to cover the 
deficit in assessment income. The increased assessment rate would allow 
the Committee to maintain its financial reserve at a level it deems 
appropriate.
    The Committee reviewed and unanimously recommended 2003-04 
expenditures of $1,773,100 which included increases in administrative 
and office 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 tomatoes was determined by examining the anticipated 
expenses and expected shipments and considering available reserves. The 
recommended assessment rate would generate $1,250,000 in income. This 
is approximately $523,100 below the anticipated expenses, which the 
Committee determined to be acceptable.
    A review of historical information and preliminary information 
pertaining to the upcoming season indicates that the grower price for 
the 2003-04 season could range between $6.45 and $10.37 per 25-pound 
container of tomatoes. Therefore, the estimated assessment revenue for 
the 2003-04 as a percentage of total grower revenue could range between 
.4 and .2 percent, respectively.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing order. 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 
4, 2003, 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 proposed rule would impose 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.
    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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2003-04 fiscal period began on August, 1, 2003, 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) the Committee needs to have sufficient funds to pay 
its expenses which are incurred on a continuous basis; and (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 fiscal periods.

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 
proposed to be 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, 2003, an assessment rate of $0.025 per 25-
pound container or equivalent is established for Florida tomatoes.

    Dated: October 21, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-27014 Filed 10-24-03; 8:45 am]
BILLING CODE 3410-02-P