[Federal Register Volume 70, Number 102 (Friday, May 27, 2005)]
[Proposed Rules]
[Pages 30647-30651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10468]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV05-966-1 PR]


Tomatoes Grown in Florida; Revisions in Requirements for 
Certificates of Privilege

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on revisions to the Certificate of 
Privilege (COP) requirements currently prescribed under the Florida 
tomato marketing order (order). The order regulates the handling of 
tomatoes grown in Florida and is administered locally by the Florida 
Tomato Committee (Committee). This rule

[[Page 30648]]

would require those interested in receiving Florida tomatoes shipped 
under a COP to apply to the Committee to become an approved receiver. 
This rule would also clarify the definitions for processing and 
pickling as used in the rules and regulations under the order. These 
changes would assist the Committee in assuring that COP tomatoes are 
disposed of into COP outlets.

DATES: Comments received by July 26, 2005, will be considered prior to 
issuance of a final rule. Pursuant to the Paperwork Reduction Act, 
comments on the information collection burden must be received by July 
26, 2005.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. 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]; 
or Internet: http://www.regulations.gov. All comments should reference 
the docket number and the date and page number of this issue of the 
Federal Register and will be made 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: William G. Pimental, Southeast 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter 
Haven, Florida 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 proposal is issued under Marketing 
Agreement No. 125 and Marketing 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 proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This proposal 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. A 
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 would revise the COP requirements currently prescribed 
under the order. This action would require all parties interested in 
receiving Florida tomatoes shipped under a COP to apply to the 
Committee to become an approved receiver. This change would assist the 
Committee in preventing tomatoes shipped under a COP from entering 
unauthorized outlets. This rule would also clarify the definitions for 
processing and pickling as used in the rules and regulations under the 
order. The Committee unanimously recommended these changes at a meeting 
held on September 9, 2004.
    Section 966.54 of the order provides authority for the 
modification, suspension, and termination of regulations to facilitate 
the handling of tomatoes for special purposes such as export, charity, 
processing, or other purposes as specified by the Committee and 
approved by USDA. Section 966.56 of the order provides authority for 
the application of adequate safeguards to prevent tomatoes handled 
pursuant to Sec.  966.54 from entering channels of trade for other than 
the specified purpose or purposes. Sections 966.120-123 of the order's 
rules and regulations specify the provisions required under a COP to 
allow tomatoes for pickling, processing, charity, relief, export, or 
experimental purposes to be shipped free from certain order 
requirements. The COP procedures include safeguards to ensure that the 
tomatoes are shipped for these purposes. The safeguards are also 
highlighted in Sec.  966.323(c). Section 966.323(g) provides the 
definition of processing.
    This rule would add a new Sec.  966.124 to the order's rules and 
regulations. This section would require that handlers could only ship 
tomatoes under a COP to receivers approved by the Committee and would 
outline the receiver application procedures. Section 966.323(c) would 
also be modified to reflect the new COP requirements.
    The COP provisions allow tomatoes for pickling, processing, 
charity, relief, export, or experimental purposes to be shipped free 
from certain order requirements. Consequently, it is important that 
adequate safeguards exist to assure that such tomatoes are disposed of 
properly. For example, the Committee noted that tomatoes shipped during 
the 2003-04 season under a COP for processing were being shipped into 
the domestic fresh market and not for the intended COP purpose.
    The volume of tomatoes shipped for processing under COPs is 
significant enough to negatively impact the market for fresh tomatoes 
if these tomatoes are utilized in markets other than those specified in 
the COP. Last season, nearly 500,000 25-pound equivalent units of 
Florida tomatoes were shipped under COPs. Consequently, the Committee 
agreed that additional steps need to be taken to ensure that tomatoes 
shipped under a COP are only utilized for the purposes specified.
    Last season, when the issue with COP tomatoes surfaced, the 
Committee staff looked for ways to address the problem. Using the 
current safeguard procedures, those handlers who had shipped to 
receivers that had used tomatoes shipped under a COP for purposes 
different than specified had their COPs canceled. Some handlers noted 
that they had shipped the tomatoes to their receiver in good faith, and 
that the receiver was responsible for the problem. Further, because the 
handlers had used COPs to ship to more than one receiver, those 
handlers affected were no longer able to take advantage of the 
exemptions provided under the COP provisions.
    Considering this, the Committee believes one way to help ensure 
that tomatoes shipped under a COP are not being misused is to provide 
for

[[Page 30649]]

safeguards on receivers. To address the situation, the Committee 
recommended that all receivers interested in receiving tomatoes shipped 
under a COP be required to apply to the Committee to become an approved 
receiver. In addition, handlers would only be able to ship under a COP 
to those approved receivers.
    Should a receiver utilize the tomatoes for purposes other than 
specified under the COP, their status as an approved receiver with the 
Committee would be rescinded. As a result, such a receiver would no 
longer be eligible to receive tomatoes from any handler under a COP, 
but would only be able to receive tomatoes meeting the existing grade 
and size requirements under the order.
    Under the provisions that would be added by this rule, anyone 
interested in receiving tomatoes under a COP would have to file an 
application with the Committee for review and approval. This would 
include persons acquiring tomatoes for processing or pickling, as well 
as tomatoes acquired for relief or charity, for export, for 
experimental purposes, or for other purposes specified by the 
Committee. This application would include the name, address, telephone 
number, and e-mail address of applicant (receiver), the purpose for 
which the COP tomatoes would be used, physical address where the stated 
privilege purpose would be accomplished, an indication of whether or 
not the receiver packs, repacks, or sells fresh tomatoes, a statement 
that the tomatoes obtained would only be used for the purposes stated 
in the COP, a statement agreeing to undergo random inspections by the 
Committee, and an agreement to submit reports as required. The 
Committee believes that this additional information would be valuable 
in helping to verify legitimate receivers.
    The Committee staff would use the information in the application to 
investigate and approve receivers wanting to receive tomatoes under 
COPs. The approved receivers and the tomatoes shipped under the COP 
provisions would be monitored throughout the year. If during the season 
an approved receiver is found to be handling tomatoes in ways other 
than specified under the COP, that receiver's approval would be 
rescinded. The Committee believes this change would help it better 
assure that COP tomatoes were shipped into the intended COP outlets. 
Moreover, handlers who may have shipped to non-compliant receivers 
would still be able to ship to other approved COP receivers.
    This rule also would amend the definition for processing contained 
in Sec.  966.323 and would add a definition for pickling. Over the past 
few years, there have been an increasing number of questions 
surrounding what constitutes a fresh product and what constitutes 
processing. To help reduce any confusion and to ensure uniformity, the 
Committee believes it is important to make the definitions for 
processing and pickling in the order's rules and regulations as clear 
as possible.
    Currently, processing is 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. This rule would amend this definition 
to specify further that all processing procedures must result in a 
product that does not require refrigeration until opened.
    In addition to the changes to the definition for processing, a 
specific definition for pickling would also be added. Pickling would be 
defined as tomatoes preserved in a brine or vinegar solution. These 
clarifications should lessen the chance of confusion between handlers 
and purchasers regarding tomatoes covered under a COP.
    The Committee believes this rule would strengthen the existing 
safeguard provisions and would help deter the use of Florida COP 
tomatoes for unauthorized purposes. By requiring persons who wish to 
receive tomatoes under COPs to apply to the Committee to become 
approved receivers, the Committee would have additional information 
regarding receivers and the ability to rescind their approved receiver 
status, if necessary. The Committee also believes enhancing the 
definitions for processed and pickled tomatoes would help further 
clarify the appropriate uses of tomatoes shipped under a COP. 
Therefore, the Committee voted unanimously to make these changes.

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 action 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 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 (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $6,000,000 (13 CFR 121.201). 
Currently, there are about 20 receivers who obtain tomatoes under COPs.
    Based on industry and Committee data, the average annual price for 
fresh Florida tomatoes during the 2003-04 season was approximately 
$8.04 per 25-pound container, and fresh shipments for the 2003-04 
season totaled 57,989,624 25-pound cartons of tomatoes. Committee data 
indicates approximately 25 percent of the handlers handle 94 percent of 
the total volume shipped outside the regulated area. Based on the 
average price, about 75 percent of handlers could be considered small 
businesses under SBA's definition. Therefore, the majority of Florida 
tomato handlers may be classified as small entities. It is believed 
that the majority of Florida tomato receivers and producers may be 
classified as small entities.
    This rule would revise the COP requirements currently prescribed 
under the order. This rule would require those interested in receiving 
Florida tomatoes shipped under a COP to apply to the Committee to 
become an approved receiver. This change would assist the Committee in 
assuring that tomatoes shipped under COPs are used for the intended COP 
purposes. This rule would also clarify the definitions for processing 
and pickling as used in the rules and regulations under the order. 
These clarifications would help reduce confusion between handlers and 
purchasers of tomatoes covered under a COP. The Committee unanimously 
recommended these changes at a meeting held on September 9, 2004. This 
rule would add a new Sec.  966.124 to the rules and regulations, amend 
the safeguard provisions specified in Sec.  966.323(c), and revise the 
definitions specified in Sec.  966.323(g). Authority for these actions 
is provided for in Sec. Sec.  966.54 and 966.56 of the order.
    It is not anticipated that these changes would result in any 
increased costs for growers, handlers, or receivers who comply with COP 
requirements. The Committee recommended these changes to improve 
compliance with the provisions established under COPs.

[[Page 30650]]

Because nearly 99 percent of Florida tomato shipments are utilized in 
the domestic fresh market, it is important to assure that tomatoes 
shipped under COPs are disposed of properly. Adequate safeguards are 
needed for this purpose.
    This action would have a beneficial impact on producers, handlers, 
and receivers in that it would continue to allow approved receivers to 
obtain COP tomatoes. Handlers shipping to approved COP receivers also 
would benefit because the non-compliant receivers would be removed from 
the Committee's approved receiver list and the handler could continue 
to take advantage of the exemptions by shipping to other approved COP 
receivers. Clarifying the definitions of processing and pickling would 
also help alleviate some of the questions and any confusion concerning 
what constitutes these procedures. The opportunities and benefits of 
this rule are expected to be equally available to all tomato handlers 
and growers regardless of their size of operation.
    However, requiring receivers to register with the Committee would 
impose an additional reporting burden on both small and large 
receivers. Requiring receivers to apply annually would increase the 
annual burden by five minutes per receiver, for a total burden of 1.67 
hours (5 minutes per response x 1 response per receiver x 20 
receivers). Although this action would place an additional burden on 
receivers of Florida COP tomatoes, the benefits of having the 
additional information regarding receivers would outweigh the increase 
in reporting burden.
    The Committee discussed alternatives to this action. One 
alternative considered was to further restrict handlers when shipping 
tomatoes under a COP. The Committee recognized that some industry 
members have developed markets for these tomatoes, which would 
otherwise be discarded. Therefore, the Committee voted to make the 
changes in this rule rather than further restricting this outlet. 
Another alternative considered was to only require processors and 
picklers to apply to the Committee. However, the Committee believed 
that the application process should be applicable to all parties 
receiving tomatoes under a COP. Consequently, this alternative was 
rejected.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule. 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 Committee's meeting was widely publicized throughout the tomato 
industry and all interested persons were invited to attend the meeting 
and participate in Committee deliberations. Like all Committee 
meetings, the September 9, 2004, meeting was a public meeting and all 
entities, both large and small, were able to express their views on 
this issue. Finally, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    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.
    As mentioned previously, this action would require an additional 
collection of information. These information collection requirements 
are discussed in the following section.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), this notice announces that AMS is seeking approval for a 
new form to collect additional information from persons interested in 
acquiring tomatoes under a Certificate of Privilege (COP), under 
Marketing Order No. 966, Tomatoes Grown in Florida (order). Upon Office 
of Management and Budget (OMB) approval, the additional burden will be 
merged into the information collection currently approved under OMB No. 
0581-0178, Vegetable and Specialty Crops Marketing Orders.
    Title: Tomatoes Grown in Florida, Marketing Order No. 966.
    OMB Number: 0581-NEW.
    Type of Request: New collection.
    Abstract: The information collection requirements in this request 
are essential to carry out the intent of the Act, to provide the 
respondents the type of service they request, and to administer the 
Florida tomato marketing order program, which has been operating since 
1955.
    On September 9, 2004, the Committee unanimously recommended 
revising the order's administrative rules and regulations to require 
persons wishing to receive Florida tomatoes exempt from certain order 
requirements under a COP to register with the Committee annually and 
provide information on their facilities. This information would be 
reported on form number FTC-111, ``Application for Registration as an 
Approved Receiver of Special Purpose Shipments.'' This form would be 
filled out by persons wishing to receive tomatoes shipped under a COP, 
and would be submitted to the Committee to obtain approval as a 
receiver of special purpose shipments. The estimated increase in burden 
due to the new form required from each entity annually is 5 minutes per 
person, with a total increased burden estimated at 1.67 hours.
    The form is needed so the Committee can collect information on 
persons wishing to receive shipments of COP tomatoes. The Committee 
would evaluate this information and determine whether an entity is 
qualified to receive COP tomatoes. This form would help ensure 
compliance with the regulations and assist the Committee and the USDA 
with oversight and planning.
    The information collected would be used only by authorized 
representatives of USDA, including AMS, Fruit and Vegetable Programs 
regional and headquarters staff, and authorized Committee employees. 
Authorized Committee employees would be the primary users of the 
information and AMS would be the secondary user.
    The request for approval of the revised information collection 
under the order is as follows:
    Form FTC-111, ``Application for Registration as an Approved 
Receiver of Special Purpose Shipments''.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 5 minutes per response.
    Respondents: Entities who acquire and/or process Florida tomatoes 
under a COP annually.
    Estimated Number of Respondents: 20.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 1.67 hours.
    Comments: Comments are invited on: (1) Whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) ways to minimize 
the burden of the collection of information on those who are to 
respond, including the use of appropriate automated, electronic, 
mechanical, or other

[[Page 30651]]

technological collection techniques or other forms of information 
technology.
    Comments should reference OMB No. 0581-NEW and the Florida tomato 
marketing order, and be sent to USDA in care of the Docket Clerk at the 
previously mentioned address. All comments received will be available 
for public inspection during regular business hours at the same 
address.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will become a matter of public 
record.
    In addition to the information collection burden, this rule also 
invites comments on revising the regulations concerning the COP 
requirements. A 60-day comment period is provided to allow interested 
persons to respond to this proposal. All written 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 
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. In Part 966, a new Sec.  966.124 is added to read as follows:


Sec.  966.124  Approved receiver.

    (a) Approved receiver. Any person who desires to acquire, as an 
approved receiver, tomatoes for purposes as set forth in Sec.  
966.120(a), shall annually, prior thereto, file an application with the 
committee on a form approved by it, which shall contain, but not be 
limited to, the following information:
    (1) Name, address, contact person, telephone number, and e-mail 
address of applicant;
    (2) Purpose of shipment;
    (3) Physical address of where manufacturing or other specified 
purpose is to occur;
    (4) Whether or not the receiver packs, repacks or sells fresh 
tomatoes;
    (5) A statement that the tomatoes obtained exempt from the fresh 
tomato regulations will not be resold or transferred for resale, 
directly or indirectly, but will be used only for the purpose specified 
in the corresponding certificate of privilege;
    (6) A statement agreeing to undergo random inspection by the 
committee;
    (7) A statement agreeing to submit such reports as is required by 
the committee.
    (b) The committee, or its duly authorized agents, shall give prompt 
consideration to each application for an approved receiver and shall 
determine whether the application is approved or disapproved and notify 
the applicant accordingly.
    (c) The committee, or its duly authorized agents, may rescind a 
person's approved receiver status upon proof satisfactory that such a 
receiver has handled tomatoes contrary to the provisions established 
under the Certificate of Privilege. Such action rescinding approved 
receiver status shall apply to and not exceed a reasonable period of 
time as determined by the committee or its duly authorized agents. Any 
person who has been denied as an approved receiver or who has had their 
approved receiver status rescinded, may appeal to the committee for 
reconsideration. Such an appeal shall be made in writing.
    3. In Sec.  966.323, a new paragraph (c)(5) is added and paragraph 
(g) is amended by removing the last three sentences and adding five new 
sentences in their place to read as follows:


Sec.  966.323  Handling regulations.

* * * * *
    (c)* * *
    (5) Make shipments only to those who have qualified with the 
committee as approved receivers.
* * * * *
    (g)* * *Processing as used in Sec. Sec.  966.120 and 966.323 means 
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. Further, 
all processing procedures must result in a product that does not 
require refrigeration until opened. Pickling as used in Sec. Sec.  
966.120 and 966.323 means to preserve tomatoes in a brine or vinegar 
solution. U.S. tomato standards means the revised United States 
Standards for Fresh Tomatoes (7 CFR 51.1855 through 51.1877), effective 
October 1, 1991, as amended, or variations thereof specified in this 
section. Other terms in this section shall have the same meaning as 
when used in Marketing Agreement No. 125, as amended, and this part, 
and the U.S. tomato standards.

    Dated: May 20, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-10468 Filed 5-26-05; 8:45 am]
BILLING CODE 3410-02-P