[Federal Register Volume 72, Number 10 (Wednesday, January 17, 2007)]
[Rules and Regulations]
[Pages 1917-1919]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-149]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. AMS-FV-06-0190; FV06-966-2 FR]


Tomatoes Grown in Florida; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule increases the assessment rate established for the 
Florida Tomato Committee (Committee) for the 2006-07 and subsequent 
fiscal periods from $0.025 to $0.035 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. Assessments upon Florida tomato handlers are used by the 
Committee to fund reasonable and necessary expenses of the program. The 
fiscal period begins August 1 and ends July 31. The assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective Date: January 18, 2007.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Marketing 
Specialist or Christian D. Nissen, Regional Manager, Southeast 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA; Telephone: (863) 324-3375, Fax: 
(863) 325-8793, or E-mail: [email protected] or 
[email protected].
    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 issued herein will be applicable to all assessable tomatoes 
beginning August 1, 2006, 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 increases the assessment rate established for the 
Committee for the 2006-07 and subsequent fiscal periods from $0.025 to 
$0.035 per 25-pound container or equivalent 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 and handlers 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

[[Page 1918]]

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 2003-04 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 August 22, 2006, and unanimously recommended 
2006-07 expenditures of $2,193,700 and an assessment rate of $0.035 per 
25-pound container or equivalent of tomatoes. In comparison, last 
year's budgeted expenditures were $2,161,800. The assessment rate of 
$0.035 is $0.01 higher than the rate currently in effect. The increase 
in the assessment rate is needed to continue to support the increased 
budget for advertising and promotion started last season, while 
reducing the amount of funds drawn from the Committee's authorized 
reserve. Without the increase in the assessment rate, the Committee 
would need to utilize an additional $500,000 from the authorized 
reserve.
    The major expenditures recommended by the Committee for the 2006-07 
fiscal period include $1,000,000 for education and promotions, $445,900 
for salaries, $320,000 for research, $67,000 for employee retirement, 
and $63,800 for employee health insurance. Budgeted expenses for these 
items in 2005-06 were $1,000,000, $428,000, $320,000, $65,000 and 
$63,800, 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 million 
which should provide $1,750,000 in assessment income. Income derived 
from handler assessments, along with interest income and funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses. Funds in the reserve (currently around $700,000) will be kept 
within the maximum permitted by the order of not to exceed one fiscal 
period's expenses as stated in Sec.  966.44.
    The assessment rate established in this rule 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 will be in effect 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 2006-07 budget and those 
for subsequent fiscal periods would 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 70 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 $6,500,000 (13 CFR 121.201).
    Based on industry and Committee data, the average annual price for 
fresh Florida tomatoes during the 2005-06 season was approximately 
$10.27 per 25-pound container or equivalent, and total fresh shipments 
for the 2005-06 season were 47,880,303 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 $10.27 per 25-
pound container, about 75 percent of handlers could be considered small 
businesses under SBA's definition. In addition, based on production, 
grower prices as reported by the National Agricultural Statistics 
Service, and the total number of Florida tomato growers, the average 
annual grower revenue is below $750,000. Thus, the majority of handlers 
and producers of Florida tomatoes may be classified as small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2006-07 and subsequent 
fiscal periods from $0.025 to $0.035 per 25-pound container or 
equivalent of tomatoes. The Committee unanimously recommended 2006-07 
expenditures of $2,193,700 and an assessment rate of $0.035 per 25-
pound container. The assessment rate of $0.035 is $0.01 higher than the 
2005-06 rate. The quantity of assessable tomatoes for the 2006-07 
season is estimated at 50 million cartons. Thus, the $0.035 rate should 
provide $1,750,000 in assessment income. Income derived from handler 
assessments, along with interest income and funds from the Committee's 
authorized reserve, should be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2006-07 
fiscal period include $1,000,000 for education and promotions, $445,900 
for salaries, $320,000 for research, $67,000 for employee retirement, 
and $63,800 for employee health insurance. Budgeted expenses for these 
items in 2005-06 were $1,000,000, $428,000, $320,000, $65,000, and 
$63,800, respectively.
    As previously mentioned, the number of assessable containers during 
2006-07 is estimated to be 50 million and the recommended assessment 
rate should generate $1,750,000 in income. The Committee's financial 
reserve is now estimated to be $700,000 and is available to cover the 
deficit in assessment income. The increase in the assessment rate is 
needed to continue to support the increased budget for advertising and 
promotion started last season, while reducing the amount of funds drawn 
from the Committee's authorized reserve. Without the increase in the 
assessment rate, the Committee would need to utilize an additional 
$500,000 from the authorized reserve.
    The Committee reviewed and unanimously recommended 2006-07 
expenditures of $2,193,700 which included increases in administrative 
and office salaries. Prior to arriving at this budget, the Committee 
considered information from various sources, such as the Committee's 
Executive Subcommittee, Finance Subcommittee,

[[Page 1919]]

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 $0.035 per 25-pound container of 
assessable tomatoes was determined by examining the anticipated 
expenses and expected shipments and considering available reserves. The 
assessment rate should generate $1,750,000 in income. Considering 
income from interest and other sources of $190,000, with assessments, 
total income should be approximately $253,700 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 2006-07 season could range between $8.27 and $12.95 per 25-pound 
container or equivalent of tomatoes. Therefore, the estimated 
assessment revenue for the 2006-07 fiscal period as a percentage of 
total grower revenue could range between 0.3 and 0.4 percent.
    This action increases 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 
are 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 August 
22, 2006, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This rule 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 AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal 
Register on November 16, 2006 (71 FR 66702). Copies of the proposed 
rule were also mailed or sent via facsimile to all Florida tomato 
handlers. Finally, the proposal was made available through the Internet 
by USDA and the Office of the Federal Register. A 15-day comment period 
ending December 1, 2006, was provided for 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.
    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.
    Pursuant to 5 U.S.C. 553, it also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) The 
2006-07 fiscal period began on August 1, 2006, and the marketing order 
requires that the rate of assessment for each fiscal period apply to 
all assessable Florida 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. Also, a 15-day comment period was provided for in the 
proposed rule.

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:

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. Section 966.234 is revised to read as follows:


Sec.  966.234  Assessment rate.

    On and after August 1, 2006, an assessment rate of $0.035 per 25-
pound container or equivalent is established for Florida tomatoes.

    Dated: January 11, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-149 Filed 1-11-07; 4:45 pm]
BILLING CODE 3410-02-P