[Federal Register Volume 73, Number 203 (Monday, October 20, 2008)]
[Proposed Rules]
[Pages 62218-62220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24919]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. AMS-FV-08-0081; FV08-966-1 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 2008-09 and subsequent 
fiscal periods from $0.0325 to $0.0375 per 25-pound carton of tomatoes 
handled. The Committee locally administers the marketing order which 
regulates the handling of tomatoes grown in Florida. Assessments upon 
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 would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by November 19, 2008.

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 Internet: http://www.regulations.gov. 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.regulations.gov.

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 proposed herein would be applicable to all assessable tomatoes 
beginning on August 1, 2008, 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 would increase the assessment rate established for the 
Committee for the 2008-09 and subsequent fiscal periods from $0.0325 to 
$0.0375 per 25-pound carton 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 2007-08 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.

[[Page 62219]]

    The Committee met on August 14, 2008, and unanimously recommended 
2008-09 expenditures of $2,438,200 and an assessment rate of $0.0375 
per 25-pound carton of tomatoes. In comparison, last year's budgeted 
expenditures were $2,101,000. The assessment rate of $0.0375 is $0.005 
higher than the rate currently in effect. The assessment increase is 
needed to offset the 2008-09 increase in education and promotion 
expenses, salaries, and employee retirement. Without the increase in 
the assessment rate, the Committee would need to utilize an additional 
$250,000 from the authorized reserve. Therefore, the Committee voted to 
increase the assessment rate.
    The major expenditures recommended by the Committee for the 2008-09 
year include $1,200,000 for education and promotion, $505,500 for 
salaries, $320,000 for research, and $77,000 for employee retirement. 
Budgeted expenses for these items in 2007-08 were $900,000, $467,000, 
$320,000, and $71,000, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses, less anticipated funds from the USDA 
Market Access Program (MAP), by expected shipments of Florida tomatoes. 
Tomato shipments for the year are estimated at 50 million 25-pound 
cartons and should provide $1,875,000 in assessment income. Income 
derived from handler assessments, along with interest income, MAP 
funds, and funds from the Committee's authorized reserve, would be 
adequate to cover budgeted expenses. Funds in the reserve (currently 
approximately $593,000) would be kept within the maximum permitted by 
the order of not to exceed one fiscal period's expenses as stated in 
Sec.  966.44 of the order.
    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 2008-09 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.
    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 2007-08 season was approximately 
$13.71 per 25-pound container, and total fresh shipments for the 2007-
08 season were 45,177,457 25-pound 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 price, about 75 percent of handlers could be considered 
small businesses under SBA's definition. In addition, based on 
production data, 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 would increase the assessment rate established for the 
Committee and collected from handlers for the 2008-09 and subsequent 
fiscal periods from $0.0325 to $0.0375 per 25-pound carton of tomatoes. 
The Committee unanimously recommended 2008-09 expenditures of 
$2,438,200 and an assessment rate of $0.0375 per 25-pound carton. The 
proposed assessment rate of $0.0375 is $0.005 higher than the 2007-08 
rate. The quantity of assessable tomatoes for the 2008-09 season is 
estimated at 50 million 25-pound cartons. Thus, the $0.0375 rate should 
provide $1,875,000 in assessments. Income derived from handler 
assessments, along with interest income and funds from the Committee's 
authorized reserve, and other income, would be adequate to cover 
budgeted expenses.
    The major expenditures recommended by the Committee for the 2008-09 
year include $1,200,000 for education and promotion, $505,500 for 
salaries, $320,000 for research, and $77,000 for employee retirement. 
Budgeted expenses for these items in 2007-08 were $900,000, $467,000, 
$320,000, and $71,000, respectively.
    The assessment increase is needed to offset the 2008-09 increase in 
education and promotion expenses, salaries, and employee retirement. 
Without the increase in the assessment rate, the Committee would need 
to utilize an additional $250,000 from the authorized reserve. 
Therefore, the Committee voted to increase the assessment rate.
    The Committee reviewed and unanimously recommended 2008-09 
expenditures of $2,438,200, which included increases in education and 
promotion, salaries, and employee retirement. 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 education and promotion projects to 
the tomato industry. The assessment rate of $0.0375 per 25-pound 
container of assessable tomatoes was determined by examining the 
anticipated expenses, expected shipments, MAP funds, and available 
reserves. The recommended assessment rate would generate $1,875,000 in 
income. Considering income from assessments, interest, and other 
sources, total income would be approximately $27,000 below the 
anticipated expenses, which the Committee determined to be acceptable.
    A review of historical information and preliminary information 
pertaining to the 2008-09 fiscal period indicates that the grower price 
for the 2008-09 season could range between $7.98 and $12.95 per 25-
pound carton of tomatoes. Therefore, the estimated assessment

[[Page 62220]]

revenue for the 2008-09 season as a percentage of total grower revenue 
could range between 0.3 and 0.5 percent.
    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 August 
14, 2008, 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 comments on this proposed rule, including 
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.
    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 small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. 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 2008-09 fiscal period began on August 1, 2008, 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 years.

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, 2008, an assessment rate of $0.0375 per 25-
pound carton is established for Florida tomatoes.

    Dated: October 15, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E8-24919 Filed 10-17-08; 8:45 am]
BILLING CODE 3410-02-P