[Federal Register Volume 89, Number 128 (Wednesday, July 3, 2024)]
[Rules and Regulations]
[Pages 55021-55023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14551]



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 Rules and Regulations
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  Federal Register / Vol. 89, No. 128 / Wednesday, July 3, 2024 / Rules 
and Regulations  

[[Page 55021]]



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: Final rule.

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SUMMARY: This rulemaking implements 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 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective August 2, 2024.

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, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This rulemaking 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 rulemaking 
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 action 
falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review.
    This rulemaking 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 rulemaking 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 rulemaking 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 assessment rate 
will 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 8c(15)(A) of the 
Act (7 U.S.C. 608c(15)(A)), 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 rulemaking increases the assessment rate for Florida tomatoes 
handled under the Order from $0.025 per 25-pound container or 
equivalent, the rate established for the 2017-2018 and subsequent 
fiscal periods, to a rate of $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 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

[[Page 55022]]

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 
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 will 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 should 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), should be adequate to cover budgeted expenses 
($1,155,764). Funds available in the financial reserve (currently about 
$241,000) will be kept within the maximum permitted by the Order 
(approximately one fiscal period's expenses as authorized in Sec.  
966.44).
    The assessment rate will 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 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 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 will 
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.

Final 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 rulemaking 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 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 
tomatoes 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 container, with total shipments of 
around 21,815,350 25-pound containers. 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 containers 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 container, with total 
shipments of around 21,815,350 containers. 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 containers 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.
    This rulemaking will 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 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,

[[Page 55023]]

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 unanimously 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 will 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 should equal $550,000 (22,000,000 
containers multiplied by $0.025). By increasing the assessment rate by 
$0.01, assessment income should 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 
should be about 0.32 percent ($0.035 divided by $11.00 multiplied by 
100).
    This action increases 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 from the operation 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 were 
invited to submit comments on this rulemaking, 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 rulemaking. Should any changes become necessary, they 
would be submitted to OMB for approval.
    This rulemaking will 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 rulemaking.
    A proposed rule concerning this action was published in the Federal 
Register on March 7, 2024 (89 FR 16471). Copies of the proposed rule 
were provided to all Florida tomato handlers. The proposal was also 
made available through the internet by USDA and the Office of the 
Federal Register. A 30-day comment period ending April 8, 2024, was 
provided for interested persons to respond to the proposal. AMS 
received three comments during the comment period. Two commentors 
supported the action and one commenter did not address the merits of 
the proposed rule. Accordingly, AMS made no changes to the rule as 
proposed.
    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, AMS has determined that this rulemaking is 
consistent with and will effectuate the purposes of the Act.

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 amends 7 CFR part 966 as follows:

PART 966--TOMATOES GROWN IN FLORIDA

0
1. The authority citation for part 966 continues to read as follows:

    Authority: 7 U.S.C. 601-674.


0
2. Revise Sec.  966.234 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.

Melissa Bailey,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-14551 Filed 7-2-24; 8:45 am]
BILLING CODE P