[Federal Register Volume 81, Number 226 (Wednesday, November 23, 2016)]
[Proposed Rules]
[Pages 84507-84510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28259]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Doc. No. AMS-SC-16-0088; SC16-966-1 PR]


Tomatoes Grown in Florida; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Florida Tomato Committee (Committee) to increase the assessment rate 
established for the 2016-17 and subsequent fiscal periods from $0.03 to 
$0.035 per 25-pound carton of tomatoes handled under the marketing 
order (order). The Committee locally administers the order and is 
comprised of producers of tomatoes operating within the area of 
production. 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 
would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by December 8, 2016.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
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 document number and 
the date and page number of this issue of the Federal Register and will 
be available for public

[[Page 84508]]

inspection in the Office of the Docket Clerk during regular business 
hours, or can be viewed at: http://www.regulations.gov. All comments 
submitted in response to this proposed rule will be included in the 
record and will be made available to the public. Please be advised that 
the identity of the individuals or entities submitting the comments 
will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Steven W. Kauffman, Marketing 
Specialist, or Christian D. Nissen, Regional Director, Southeast 
Marketing Field Office, Marketing Order and Agreement Division, 
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: 
(863) 291-8614, or Email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202)720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This proposed 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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed 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 Florida tomatoes beginning on August 1, 2016, and continue 
until amended, suspended, or terminated.
    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 proposed rule would increase the assessment rate established 
for the Committee for the 2016-17 and subsequent fiscal periods from 
$0.03 to $0.035 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 of 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 2015-16 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate of $0.03 per 25-
pound carton of tomatoes 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 16, 2016, and unanimously recommended 
2016-17 expenditures of $1,494,600 and an assessment rate of $0.035 per 
25-pound carton of tomatoes. In comparison, last year's budgeted 
expenditures were $1,513,177. The assessment rate of $0.035 is $0.005 
higher than the rate currently in effect. At the current assessment 
rate, assessment income would equal only $990,000, an amount 
insufficient to cover the Committee's anticipated expenditures of 
$1,494,600. The Committee considered the proposed expenses and 
recommended increasing the assessment rate.
    The major expenditures recommended by the Committee for the 2016-17 
year include $450,000 for salaries, $400,000 for research, and $400,000 
for education and promotion. Budgeted expenses for these items in 2015-
16 were $435,377, $400,000, and $400,000, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Florida 
tomatoes. Florida tomato shipments for the 2016-17 year are estimated 
at 33 million 25-pound cartons, which should provide $1,155,000 in 
assessment income. Income derived from handler assessments, along with 
interest income, block grants, and funds from the Committee's 
authorized reserve, would be adequate to cover budgeted expenses. Funds 
in the reserve (approximately $999,361) would be kept within the 
maximum permitted by the order of no more than approximately 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 2016-17 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) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this proposed 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 
businesses 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

[[Page 84509]]

small entities acting on their own behalf.
    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 $7,500,000 (13 CFR 121.201).
    Based on industry and Committee data, the average annual price for 
fresh Florida tomatoes during the 2015-16 season was approximately 
$11.27 per 25-pound carton, and total fresh shipments were 
approximately 28.2 million cartons. Using the average price and 
shipment information, number of handlers, and assuming a normal 
distribution, the majority of handlers have average annual receipts 
below $7,500,000. In addition, based on production data, an estimated 
grower price of $6.25, and the total number of Florida tomato growers, 
the average annual grower revenue is above $750,000. Thus, a majority 
of the handlers of Florida tomatoes may be classified as small entities 
while a majority of the producers may be classified as large entities.
    This proposal would increase the assessment rate established for 
the Committee and collected from handlers for the 2016-17 and 
subsequent fiscal periods from $0.03 to $0.035 per 25-pound carton of 
tomatoes. The Committee unanimously recommended 2016-17 expenditures of 
$1,494,600 and an assessment rate of $0.035 per 25-pound carton 
handled. The proposed assessment rate of $0.035 is $.005 higher than 
the 2015-16 rate. The quantity of assessable tomatoes for the 2016-17 
season is estimated at 33 million 25-pound cartons. Thus, the $0.035 
rate should provide $1,155,000 in assessment income. Income derived 
from handler assessments, along with funds from interest income, MAP 
funds, and block grants, should provide sufficient funds to meet this 
year's anticipated expenses.
    The major expenditures recommended by the Committee for the 2016-17 
year include $450,000 for salaries, $400,000 for research, and $400,000 
for education and promotion. Budgeted expenses for these items in 2015-
16 were $435,377, $400,000, and $400,000, respectively.
    At the current assessment rate, assessment income would equal only 
$990,000, an amount insufficient to cover the Committee's anticipated 
expenditures of $1,494,600. The Committee considered the proposed 
expenses and recommended increasing the assessment rate.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources, such as the Committee's 
Executive Subcommittee, Research Subcommittee, and Education and 
Promotion Subcommittee. Alternative expenditure levels were discussed 
by these groups, based upon the relative value of various activities to 
the tomato industry. The Committee determined that 2016-17 expenditures 
of $1,494,600 were appropriate, and the recommended assessment rate, 
along with funds from interest income, block grants, and funds from 
reserves, would be adequate to cover budgeted expenses.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the average grower 
price for the 2016-17 season could be approximately $6.50 per 25-pound 
carton of tomatoes. Therefore, the estimated assessment revenue for the 
2016-17 crop year as a percentage of total grower revenue would be 
approximately 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.
    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 16, 2016, 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.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in 
those requirements are necessary as a result of this action. Should any 
changes become necessary, they would be submitted to OMB for approval.
    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 action.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2016-17 fiscal period began on August 1, 2016, 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 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

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, 2016, an assessment rate of $0.035 per 25-
pound carton is established for Florida tomatoes.


[[Page 84510]]


    Dated: November 18, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-28259 Filed 11-22-16; 8:45 am]
 BILLING CODE 3410-02-P