[Federal Register Volume 82, Number 49 (Wednesday, March 15, 2017)]
[Rules and Regulations]
[Pages 13741-13743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04979]



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 Rules and Regulations
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  Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / 
Rules and Regulations  

[[Page 13741]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

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


Tomatoes Grown in Florida; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Florida Tomato 
Committee (Committee) for an increase in 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 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective March 16, 2017.

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 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 Orders 12866, 13563, and 13175.
    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 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 rule increases 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 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 2015-16 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 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, should be adequate to cover budgeted expenses. 
Funds in the reserve (approximately $999,361) will be kept within the 
maximum permitted by the order of no

[[Page 13742]]

more than approximately 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 2016-17 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) (5 U.S.C. 601-612), 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 
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 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 rule increases 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 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, should 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 could be 
approximately 0.5 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 
16, 2016, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    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 as a result of this action are necessary. Should any 
changes become necessary, they would be submitted to OMB for approval.
    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. 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.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on November 23, 2016 (81 FR 84507). Copies of the proposed 
rule were also mailed or sent via facsimile to all Florida tomato 
handlers. Finally, the

[[Page 13743]]

proposal was made available through the internet by USDA and the Office 
of the Federal Register. A 15-day comment period ending December 8, 
2016, was provided for interested persons to respond to the proposal. 
One comment was received. The commenter opposes the assessment rate and 
stated the government should not raise the assessment. The marketing 
order for Florida tomatoes was established at the request of the 
industry and is locally administered by the Committee, which is made up 
of growers nominated by their peers. The Committee requires funds to 
operate the program. The current assessment rate will not provide 
sufficient funds to cover anticipated expenses and the Committee voted 
unanimously to increase the assessment rate. Accordingly, no changes 
will be made to the rule as proposed, based on the comment 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/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.
    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 is 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 handlers are 
already receiving 2016-17 crop tomatoes from growers. The crop year 
began 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. Also, the Committee incurs 
expenses on a continuing basis. Further, handlers are aware of this 
rule, which was unanimously recommended at a public meeting, and 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.

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

    Dated: March 9, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-04979 Filed 3-14-17; 8:45 am]
 BILLING CODE 3410-02-P