[Federal Register: November 9, 2001 (Volume 66, Number 218)]
[Rules and Regulations]
[Page 56599-56602]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 966
[Docket No. FV01-966-2 IFR]
Tomatoes Grown in Florida; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule decreases the assessment rate established for the
Florida Tomato Committee (Committee) for the 2001-02 and subsequent
fiscal periods from $0.025 to $0.02 per 25-pound container of tomatoes
handled. The Committee locally administers the marketing order which
regulates the handling of tomatoes grown in Florida. Authorization to
assess tomato handlers enables the Committee to incur expenses that are
reasonable and necessary to administer the program. The fiscal period
began August 1 and ends July 31. The assessment rate will remain in
effect indefinitely unless modified, suspended, or terminated.
DATES: Effective November 13, 2001. Comments received by January 8,
2002, will be considered prior to issuance of a final rule.
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, room 2525-S. Box 96456, Washington, DC 20090-6456; Fax:
(202) 720-8938, or E-mail: moab.docketclerk@usda.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.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist,
Southeast Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276, Winter
Haven, FL 33883-2276; telephone: (863)
[[Page 56600]]
299-4770, Fax: (863) 299-5169; or George Kelhart, Technical Advisor,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456;
telephone: (202) 720-2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room
2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax:
(202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
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 marketing agreement and order are
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 issued herein will be applicable to all assessable tomatoes
beginning August 1, 2001, 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 decreases the assessment rate established for the
Committee for the 2001-02 and subsequent fiscal periods from $0.025 per
25-pound container to $0.02 per 25-pound container 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 1999-2000 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 September 6, 2001, and unanimously recommended
2001-02 expenditures of $1,666,650 and an assessment rate of $0.02 per
25-pound container of tomatoes. In comparison, last year's budgeted
expenditures were $1,910,000. The assessment rate of $0.02 is $0.005
lower than the rate currently in effect. The Committee's authorized
reserve is larger than necessary. In an effort to reduce the amount in
the reserve fund, the Committee unanimously recommended reducing the
assessment rate.
The major expenditures recommended by the Committee for the 2001-02
fiscal year include $700,000 for education and promotion, $418,650 for
salaries and benefits, $320,000 for research, $51,500 for employee
retirement, and $31,000 for office rent. Budgeted expenses for these
items in 2000-01 were $1,000,000, $407,800, $315,700, $44,900, and
$24,500, respectively.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected shipments of Florida
tomatoes, while considering other factors such as the current balance
in the reserve fund. Tomato shipments for the year are estimated at
50,000,000 25-pound containers which should provide $1,000,000 in
assessment income. Income derived from handler assessments, along with
interest income and funds from the Committee's authorized reserve, will
be adequate to cover budgeted expenses. Funds in the reserve (currently
$1,900,000) will be kept within the maximum permitted by the order
(approximately one fiscal period's expenses, 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 is effective 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. The 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 2001-02 budget and those
for subsequent fiscal periods will 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. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 100 producers of tomatoes in the production
area and approximately 82 handlers subject to regulation under the
marketing order. Small agricultural producers are defined by the Small
Business Administration (13 CFR 121.201) as those having annual
receipts
[[Page 56601]]
less than $750,000, and small agricultural service firms are defined as
those whose annual receipts are less than $5,000,000.
Based on the industry and Committee data, the average annual price
for fresh Florida tomatoes during the 2000-01 season was $9.16 per 25-
pound container or equivalent, and total fresh shipments for the 2000-
01 season were 53,649,508 25-pound equivalent cartons of tomatoes.
Committee data indicates that approximately 21 percent of the Florida
handlers handle 80 percent of the total volume shipped outside the
regulated area. Based on this information, the shipment information for
the 2000-01 season, and the 2000-01 season average price, the majority
of handlers would be classified as small entities as defined by the
SBA. The majority of producers of Florida tomatoes also may be
classified as small entities.
This rule decreases the assessment rate established for the
Committee and collected from handlers for the 2001-02 and subsequent
fiscal periods from $0.025 to $0.02 per 25-pound container of tomatoes.
The Committee unanimously recommended 2001-02 expenditures of
$1,666,650 and an assessment rate of $0.02 per 25-pound container. The
assessment rate of $0.02 is $0.005 lower than the 2000-01 rate. The
quantity of assessable tomatoes for the 2001-02 season is estimated at
50,000,000 25-pound cartons. Thus, the $0.02 rate should provide
$1,000,000 in assessment income. Income derived from handler
assessments, along with interest income and funds from the Committee's
authorized reserve, will be adequate to cover budgeted expenses.
The major expenditures recommended by the Committee for the 2001-02
fiscal year include $700,000 for education and promotion, $418,650 for
salaries and benefits, $320,000 for research, $51,500 for employee
retirement, and $31,000 for office rent. Budgeted expenses for these
items in 2000-01 were $1,000,000, $407,800, $315,700, $44,900, and
$24,500 for office rent, respectively.
In the past two seasons, assessments collected have exceeded
budgeted expenses, primarily due to a larger than expected supply of
tomatoes. This has increased the total in the reserve. In addition, the
Committee voted to reduce the education and promotion budget for the
2001-02 season, reducing total recommended expenses by approximately
$300,000. The authorized reserve fund is now larger than necessary. In
an effort to reduce the amount in the reserve fund and considering the
reduced budget, the Committee unanimously recommended reducing the
assessment rate. The funds collected from assessments, along with money
from the reserve fund will be adequate to cover the Committee's
expenditures for the 2001-02 fiscal year.
The Committee reviewed and unanimously recommended 2001-02
expenditures of $1,666,650 which included decreases in office rent, and
education and promotion programs. 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 research projects to the tomato industry. The
assessment rate of $0.02 per 25-pound container of assessable tomatoes
was then determined by dividing the total recommended budget by the
quantity of assessable tomatoes, while considering other factors such
as the current balance in the reserve fund. Estimated shipments of
tomatoes are 50,000,000 25-pound containers for the 2001-02 fiscal
year. At the recommended rate, $1,000,000 in assessment income will be
collected. This is approximately $600,000 below the anticipated
expenses, which the Committee determined to be acceptable, in view of
its goal of reducing its operating reserve.
A review of historical information and preliminary information
pertaining to the upcoming season indicates that the grower price for
the 2001-02 season could range from $4.25 and $13.53 per 25-pound
container of tomatoes. Therefore, the estimated assessment revenue for
the 2001-02 season as a percentage of total grower revenue could range
between 1.5 and 4.7 percent.
This action decreases the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to producers. However, decreasing the
assessment rate reduces the burden on handlers, and may reduce the
burden on producers. 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 September
6, 2001, 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 information on the regulatory and
informational impacts of this action on small businesses.
This action 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.
The 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/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber 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 upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because: (1) The 2001-02 fiscal period began on August 1,
2001, 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) this action decreases the assessment rate for
assessable tomatoes beginning with the 2001-02 fiscal period; (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; and (4) this interim final rule
provides a 60-day comment period, and all comments timely received will
be considered prior to finalization of this 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:
[[Page 56602]]
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, 2001, an assessment rate of $0.20 per 25-
pound container or equivalent is established for Florida tomatoes.
Dated: November 5, 2001.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 01-28203 Filed 11-8-01; 8:45 am]
BILLING CODE 3410-02-P
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