[Federal Register Volume 89, Number 46 (Thursday, March 7, 2024)]
[Proposed Rules]
[Pages 16471-16473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04788]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 89, No. 46 / Thursday, March 7, 2024 / 
Proposed Rules  

[[Page 16471]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Doc. No. AMS-SC-23-0063]


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 2023-2024 and subsequent fiscal periods from $0.025 
to $0.035 per 25-pound container of tomatoes or equivalent. The 
proposed assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by April 8, 2024.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments can be sent to the Docket 
Clerk. Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments can also be sent to the Docket Clerk electronically by Email: 
[email protected] or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register. 
Comments submitted in response to this proposed rule will be included 
in the record and will be made available to the public and can be 
viewed at: https://www.regulations.gov. 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, Chief, Southeast Region Branch, 
Market Development 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, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, Fax: (202) 
720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
Agreement No. 125 and Marketing Order No. 966, as amended (7 CFR part 
966), regulating the handling of tomatoes grown in Florida. Part 966 
referred to as ``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 Committee locally 
administers the Order and is comprised of producers of fresh tomatoes 
operating within the area of production.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866, 13563, and 14094. 
Executive Orders 12866 and 13563 direct agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. Executive 
Order 14094 reaffirms, supplements, and updates Executive Order 12866 
and further directs agencies to solicit and consider input from a wide 
range of affected and interested parties through a variety of means. 
This proposed action falls within a category of regulatory actions that 
the Office of Management and Budget (OMB) exempted from Executive Order 
12866 review.
    This proposed rule has been reviewed under Executive Order 13175, 
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have Tribal implications. AMS has determined that this proposed rule is 
unlikely to have substantial direct effects on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes.
    This proposed rule has been reviewed under Executive Order 12988--
Civil Justice Reform. Under the 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 proposed 
assessment rate would be applicable to all assessable tomatoes for the 
2023-2024 fiscal period, 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 the U.S. Department 
of Agriculture (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 for Florida 
tomatoes handled under the Order from $0.025 per 25-pound container or 
equivalent, the rate that was established for the 2017-2018 and 
subsequent fiscal periods, to $0.035 per 25-pound container or 
equivalent for the 2023-2024 and subsequent fiscal periods.
    Sections 966.41 and 966.42 authorize the Committee, with the 
approval of

[[Page 16472]]

AMS, to formulate an annual budget of expenses and collect assessments 
from handlers to administer the program. The members are familiar with 
the Committee's needs and with the costs of goods and services in their 
local area and are able to formulate an appropriate budget and 
assessment rate. The assessment rate is formulated and discussed in a 
public meeting, and all directly affected persons have an opportunity 
to participate and provide input.
    For the 2017-2018 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate of $0.025 per 25-
pound container or equivalent of Florida tomatoes within the production 
area. That rate continues in effect from fiscal period to fiscal period 
until modified, suspended, or terminated by AMS upon recommendation and 
information submitted by the Committee or other information available 
to AMS.
    The Committee met on September 20, 2023, and unanimously 
recommended 2023-2024 fiscal period expenditures of $1,155,764 and an 
assessment rate of $0.035 per 25-pound container or equivalent of 
Florida tomatoes handled for the 2023-2024 and subsequent fiscal 
periods. In comparison, last fiscal period's budgeted expenditures were 
$1,156,773. The proposed assessment rate of $0.035 per 25-pound 
container or equivalent is $0.01 higher than the rate currently in 
effect. The Committee has used financial reserves in previous seasons 
to help pay for budgeted expenses. Increasing the assessment rate would 
allow the Committee to replenish and maintain their financial reserves 
at the desired level of $250,000. The Committee projects handler 
receipts of approximately 22,000,000 25-pound containers or equivalent 
of assessable Florida tomatoes for the 2023-2024 fiscal period, an 
increase from the 21,815,350 containers handled for the 2022-2023 
fiscal period.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $350,000 for research; $340,000 for 
education and promotions; and $277,393 for management and staff. By 
comparison, budgeted expenses for these items during the 2022-2023 
fiscal period were $350,000; $330,000; and $274,105, respectively.
    At the current assessment rate of $0.025, the expected 22,000,000 
25-pound containers or equivalent of assessable Florida tomatoes would 
generate $550,000 in assessment revenue (22,000,000 multiplied by 
$0.025 assessment rate). By increasing the assessment rate by $0.01 to 
$0.035, assessment income would generate $770,000 in assessment revenue 
(22,000,000 multiplied by $0.035 assessment rate) for the 2023-2024 
fiscal period. This amount should be appropriate to ensure the 
Committee has sufficient revenue, along with an anticipated $265,501 in 
funds awarded through the Foreign Agricultural Service Market Access 
Program and $129,071 in other income, to fully fund its recommended 
2023-2024 fiscal period budgeted expenditures, while maintaining 
financial reserves at around $250,000.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses, expected shipments of 
Florida tomatoes, anticipated grant funds, and the amount of funds 
available in financial reserve. Income derived from handler assessments 
($770,000), Foreign Agricultural Service Market Access Program grants 
($265,501), and other sources including administrative and interest 
income ($129,071), would be adequate to cover budgeted expenses 
($1,155,764). Funds available in the financial reserve (currently about 
$241,000) would be kept within the maximum permitted by the Order 
(approximately one fiscal period's expenses as authorized in Sec.  
966.44).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS 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 AMS. Committee meetings are open to the public and interested 
persons may express their views at these meetings. AMS will 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 2023-2024 
fiscal period budget, and those for subsequent fiscal periods, will be 
reviewed and, as appropriate, approved by AMS.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 small 
entities acting on their own behalf.
    There are 38 handlers of Florida tomatoes subject to regulation 
under the Order and approximately 50 producers of Florida tomatoes in 
the production area. At the time this analysis was prepared, the Small 
Business Administration (SBA) defined small agricultural producers of 
noncitrus fruit as those having annual receipts of less than $3,500,000 
(NAICS code 111339, Other Non-citrus Fruit Farming), and small 
agricultural service firms as those whose annual receipts are less than 
$34,000,000 (NAICS code 115114, Postharvest Crop Activities) (13 CFR 
121.201).
    According to data from the AMS Market News Tomato Fax Report, the 
average price for fresh Florida tomatoes for the 2022-2023 season was 
approximately $21.94 per 25-pound carton, with total shipments of 
around 21,815,350 cartons. Based on the average terminal market price 
and shipment information, the number of handlers, and assuming a normal 
distribution, the majority of tomato handlers have estimated average 
annual receipts of significantly less than $34,000,000 ($21.94 
multiplied by 21,815,350 cartons equals $478,628,779, divided by 38 
handlers equals $12,595,494 per handler).
    In addition, based on data from the National Agricultural 
Statistics Service (NASS), the average price producers received for 
fresh Florida tomatoes at the point of first sale during the 2022-2023 
season was approximately $11.08 per 25-pound carton, with total 
shipments of around 21,815,350 cartons. Using the average price 
producers received and shipment information, the number of producers, 
and assuming a normal distribution, the majority of producers have 
estimated average annual receipts greater than $3.5 million ($11.08 
multiplied by 21,815,350 cartons equals $241,714,078, divided by 50 
producers equals $4,834,282 per producer). Thus, a majority of 
producers of Florida tomatoes may be classified as large entities, 
while a majority of handlers may be classified as small entities.

[[Page 16473]]

    This proposal would increase the assessment rate collected from 
handlers for the 2023-2024 and subsequent fiscal periods from $0.025 to 
$0.035 per 25-pound container or equivalent of Florida tomatoes. The 
Committee unanimously recommended 2023-2024 fiscal period expenditures 
of $1,155,764 and an assessment rate of $0.035 per 25-pound container 
or equivalent of Florida tomatoes. The proposed assessment rate of 
$0.035 is $0.01 higher than the current rate. The Committee expects 
industry to handle 22,000,000 25-pound containers or equivalent of 
Florida tomatoes during the 2023-2024 fiscal period. Thus, the $0.035 
rate per 25-pound container or equivalent should provide $770,000 in 
assessment income (22,000,000 containers multiplied by $0.035). The 
Committee expects to use an anticipated $265,501 in funds awarded 
through the Foreign Agricultural Service Market Access Program and 
$129,071 in other sources to cover remaining expenses. Income derived 
from handler assessments, Foreign Agricultural Service Market Access 
Program grants, and other sources including member fees and interest 
income, should be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $350,000 for research; $340,000 for 
education and promotions; and $277,393 for management and staff. By 
comparison, budgeted expenses for these items during the 2022-2023 
fiscal period were $350,000; $330,000; and $274,105, respectively.
    The Committee recommended increasing the assessment rate after 
drawing down financial reserves in previous seasons. The Committee 
desires to maintain a financial reserve of around $250,000, and without 
increasing the assessment rate, the Committee would not be able to 
maintain financial reserves at this level. The Committee estimates 
production for the 2023-2024 fiscal period to be 22,000,000 25-pound 
containers or equivalent of Florida tomatoes. At the current assessment 
rate, assessment income would equal $550,000 (22,000,000 containers 
multiplied by $0.025). By increasing the assessment rate by $0.01, 
assessment income would be $770,000 (22,000,000 containers multiplied 
by $0.035). This amount, along with Foreign Agricultural Service Market 
Access Program grants, and other income, should provide sufficient 
funds to meet anticipated 2023-2024 fiscal period expenses, while 
maintaining financial reserves at around $250,000.
    Prior to arriving at this budget and assessment rate, the Committee 
considered maintaining the current assessment rate of $0.025. However, 
the Committee would need to further draw down reserves to meet its 
expenses. The Committee members did not want to utilize additional 
funds from reserves to meet 2023-2024 fiscal period expenses. 
Consequently, the alternative of maintaining the current assessment 
rate was rejected.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal period indicates the average grower price for the 
2023-2024 season should be approximately $11.00 per 25-pound container 
of tomatoes or equivalent. Therefore, the estimated assessment revenue 
for the 2023-2024 crop year as a percentage of total grower revenue 
would be about 0.32 percent ($0.035 divided by $11.00 multiplied by 
100).
    This proposed action would increase the assessment obligation 
imposed on Florida tomato handlers. Assessments are applied uniformly 
on all handlers, and some of the costs may be passed on to producers. 
However, these costs are expected to be offset by the benefits derived 
by the operations of the Order.
    The Committee's meetings are widely publicized throughout the 
Florida tomato industry and all interested persons are invited to 
attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the September 20, 2023, 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 OMB and assigned OMB No. 0581-0178 Vegetable and 
Specialty Crops. No changes in those requirements would be necessary as 
a result of this proposed rule. Should any changes become necessary, 
they would be submitted to OMB for approval.
    This proposed rule would not impose any 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.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://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 recommendations submitted by the Committee and 
other available information, USDA has determined that this proposed 
rule is consistent with and would effectuate the purposes of the Act.
    A 30-day comment period is provided to allow interested persons to 
comment on this proposed rule. All written comments timely received 
will be considered before a final determination is made on this 
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, the Agricultural 
Marketing Service proposes to amend 7 CFR part 966 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, 2023, an assessment rate of $0.035 per 25-
pound container or equivalent is established for Florida tomatoes.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-04788 Filed 3-6-24; 8:45 am]
BILLING CODE P