[Federal Register Volume 70, Number 174 (Friday, September 9, 2005)]
[Rules and Regulations]
[Pages 53537-53540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17860]



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  Federal Register / Vol. 70, No. 174 / Friday, September 9, 2005 / 
Rules and Regulations  

[[Page 53537]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV05-966-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

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

EFFECTIVE DATE: This final rule becomes effective September 10, 2005.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA; 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 final rule 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 final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. 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. 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 final rule revises the COP requirements currently prescribed 
under the order. This rule requires all parties interested in receiving 
Florida tomatoes shipped under a COP to apply to the Committee to 
become an approved receiver. This change will assist the Committee in 
preventing tomatoes shipped under a COP from entering unauthorized 
outlets. This rule also clarifies 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) specifies the 
definition of processing.
    This final rule adds Sec.  966.124 to the order's rules and 
regulations. This section requires that handlers only ship tomatoes 
under a COP to receivers approved by the Committee and outlines the 
receiver application procedures. Section 966.323(c) is also 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

[[Page 53538]]

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 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 are only 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 will be rescinded. As a result, such a receiver will no 
longer be eligible to receive tomatoes from any handler under a COP, 
but will only be able to receive tomatoes meeting the existing grade 
and size requirements under the order.
    Under the provisions added by this rule, anyone interested in 
receiving tomatoes under a COP will have to file an application with 
the Committee for review and approval. This includes 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 includes the 
name, address, telephone number, and e-mail address of applicant 
(receiver), the purpose for which the COP tomatoes will be used, 
physical address where the stated privilege purpose will be 
accomplished, an indication of whether or not the receiver packs, 
repacks, or sells fresh tomatoes, a statement that the tomatoes 
obtained will 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 will be valuable in helping to verify 
legitimate receivers.
    The Committee staff will 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 will 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 will be 
rescinded. The Committee believes this change will help better assure 
that COP tomatoes are shipped into the intended COP outlets. Moreover, 
handlers who may have shipped to non-compliant receivers will still be 
able to ship to other approved COP receivers.
    This rule also amends the definition for processing contained in 
Sec.  966.323 and adds 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 amends 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 is also added. Pickling is 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 will strengthen the existing 
safeguard provisions and will 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 has 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 helps further clarify the appropriate 
uses of tomatoes shipped under a COP. Therefore, the Committee voted 
unanimously to make these changes.

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 action 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 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 final rule revises the COP requirements currently prescribed 
under the order. This rule requires those interested in receiving 
Florida tomatoes shipped under a COP to apply to the Committee to 
become an approved receiver. This change will assist the

[[Page 53539]]

Committee in assuring that tomatoes shipped under COPs are used for the 
intended COP purposes. This rule also clarifies the definitions for 
processing and pickling as used in the rules and regulations under the 
order. These clarifications will 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 adds Sec.  966.124 to the rules and regulations, amends 
the safeguard provisions specified in Sec.  966.323(c), and revises 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.
    These changes are not expected to 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. 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 will have a beneficial impact on producers, handlers, 
and receivers in that it will continue to allow approved receivers to 
obtain COP tomatoes. Handlers shipping to approved COP receivers also 
benefit because the non-compliant receivers will be removed from the 
Committee's approved receiver list and the handler can continue to take 
advantage of the exemptions by shipping to other approved COP 
receivers. Clarifying the definitions of processing and pickling also 
helps 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 imposes 
an additional reporting burden on both small and large receivers. 
Requiring receivers to apply annually will 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 places an additional burden on receivers of 
Florida COP tomatoes, the benefits of having the additional information 
regarding receivers 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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this final 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.
    In addition, 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.
    A proposed rule concerning this action was published in the Federal 
Register on May 27, 2005 (70 FR 30647). Copies of the rule were mailed 
or sent via facsimile to all Committee members and tomato handlers. 
Finally, the rule was made available through the Internet by the Office 
of the Federal Register. A 60-day comment period ending July 26, 2005, 
was provided to allow interested persons to respond to the proposal. 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.
    As mentioned previously, this action requires 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.), the information collection requirements that are 
contained in this rule were approved by the Office of Management and 
Budge (OMB), under OMB No. 0581-0231. The information collection has 
been merged into OMB No. 0581-0178, Vegetable and Specialty Crops 
Marketing Orders, which expires October 31, 2007.
    In summary, this final rule establishes reporting requirements 
authorized under the Florida tomato order. Information would be 
reported on form number FTC-111. These additional reporting 
requirements will enable the Committee to collect information from 
persons wishing to receive Florida tomatoes exempt from certain order 
requirements under a COP. The Committee will evaluate this information 
and determine whether an entity is qualified to receive COP tomatoes. 
This form will help ensure compliance with the regulations and assist 
the Committee and USDA with oversight and planning. The estimated 
burden due to this form required of each entity annually is 5 minutes 
per person, with a total increased burden estimated at 1.67 hours.

Government Paperwork Elimination Act Compliance

    The Agricultural Marketing Service (AMS) is committed to compliance 
with the Government Paperwork Elimination Act (GPEA), which requires 
Government agencies in general to provide the public the option of 
submitting information or transacting business electronically to the 
maximum extent possible.
    After consideration of all relevant matter 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.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because the final rule should be 
effective by the start of the 2005-06 season, which begins October 10, 
2005. Further, handlers are aware of this rule, which was recommended 
at a public meeting. Also, a 60-day comment period was provided for in 
the proposed rule. No comments were received.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.


0
For the reasons set forth in the preamble, 7 CFR part 966 is amended as 
follows:

[[Page 53540]]

PART 966--TOMATOES GROWN IN FLORIDA

0
1. The authority citation for 7 CFR part 966 continues to read as 
follows:

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


0
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.

0
3. In Sec.  966.323, a new paragraph (5) is added to paragraph (c), and 
paragraph (g) is amended by revising the definitions of Processing and 
U.S. tomato Standards, and by adding a definition for Pickling 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: September 2, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-17860 Filed 9-8-05; 8:45 am]
BILLING CODE 3410-02-P