[Federal Register: November 16, 2006 (Volume 71, Number 221)]
[Proposed Rules]
[Page 66702-66704]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16no06-23]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 966
[Docket No. FV06-966-2 PR]
Tomatoes Grown in Florida; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the Florida Tomato Committee (Committee) for the 2006-07 and subsequent
fiscal periods from $0.025 to $0.035 per 25-pound container or
equivalent of tomatoes handled. The Committee locally administers the
marketing order which regulates the handling of tomatoes grown in
Florida. 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 1, 2006.
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, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938, E-mail: moab.docketclerk@usda.gov; or
Internet: http://www.regulations.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: William G. Pimental, Marketing
Specialist or Christian D. Nissen, Regional Manager, Southeast
Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA;
Telephone: (863) 324-3375, Fax: (863) 325-8793, or E-mail:
William.Pimental@usda.gov or Christian.Nissen@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; telephone: (202)
720-
[[Page 66703]]
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 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 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 proposed herein would be applicable to all assessable tomatoes
beginning on August 1, 2006, 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 would increase the assessment rate established for the
Committee for the 2006-07 and subsequent fiscal periods from $0.025 to
$0.035 per 25-pound container or equivalent 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 and handlers 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 2003-04 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 22, 2006, and unanimously recommended
2006-07 expenditures of $2,193,700 and an assessment rate of $0.035 per
25-pound container or equivalent of tomatoes. In comparison, last
year's budgeted expenditures were $2,161,800. The assessment rate of
$0.035 is $0.01 higher than the rate currently in effect. The increase
in the assessment rate is needed to continue to support the increased
budget for advertising and promotion started last season, while
reducing the amount of funds drawn from the Committee's authorized
reserve. Without the increase in the assessment rate, the Committee
would need to utilize an additional $500,000 from the authorized
reserve.
The major expenditures recommended by the Committee for the 2006-07
fiscal period include $1,000,000 for education and promotions, $445,900
for salaries, $320,000 for research, $67,000 for employee retirement,
and $63,800 for employee health insurance. Budgeted expenses for these
items in 2005-06 were $1,000,000, $428,000, $320,000, $65,000 and
$63,800, respectively.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected shipments of Florida
tomatoes. Tomato shipments for the year are estimated at 50 million
which should provide $1,750,000 in assessment income. Income derived
from handler assessments, along with interest income and funds from the
Committee's authorized reserve, would be adequate to cover budgeted
expenses. Funds in the reserve (currently around $700,000) would be
kept within the maximum permitted by the order of not to exceed 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 2006-07 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), 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 70 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 $6,500,000 (13 CFR 121.201).
Based on industry and Committee data, the average annual price for
fresh Florida tomatoes during the 2005-06 season was approximately
$10.27 per 25-pound container or equivalent, and total fresh shipments
for the 2005-06 season were 47,880,303 25-pound equivalent cartons of
tomatoes. Committee data indicates that
[[Page 66704]]
approximately 25 percent of the handlers handle 94 percent of the total
volume shipped outside the regulated area. Based on the average annual
price of $10.27 per 25-pound container, about 75 percent of handlers
could be considered small businesses under SBA's definition. In
addition, based on production, grower prices as reported by the
National Agricultural Statistics Service, and the total number of
Florida tomato growers, the average annual grower revenue is below
$750,000. Thus, the majority of handlers and producers of Florida
tomatoes may be classified as small entities.
This rule would increase the assessment rate established for the
Committee and collected from handlers for the 2006-07 and subsequent
fiscal periods from $0.025 to $0.035 per 25-pound container or
equivalent of tomatoes. The Committee unanimously recommended 2006-07
expenditures of $2,193,700 and an assessment rate of $0.035 per pound
container. The proposed assessment rate of $0.035 is $0.01 higher than
the 2005-06 rate. The quantity of assessable tomatoes for the 2006-07
season is estimated at 50 million cartons. Thus, the $0.035 rate should
provide $1,750,000 in assessment income. Income derived from handler
assessments, along with interest income and funds from the Committee's
authorized reserve, would be adequate to cover budgeted expenses.
The major expenditures recommended by the Committee for the 2006-07
fiscal period include $1,000,000 for education and promotions, $445,900
for salaries, $320,000 for research, $67,000 for employee retirement,
and $63,800 for employee health insurance. Budgeted expenses for these
items in 2005-06 were $1,000,000, $428,000, $320,000, $65,000, and
$63,800, respectively.
As previously mentioned, the number of assessable containers during
2006-07 is estimated to be 50 million and the recommended assessment
rate would generate $1,750,000 in income. The Committee's financial
reserve is now estimated to be $700,000 and is available to cover the
deficit in assessment income. The increase in the assessment rate is
needed to continue to support the increased budget for advertising and
promotion started last season, while reducing the amount of funds drawn
from the Committee's authorized reserve. Without the increase in the
assessment rate, the Committee would need to utilize an additional
$500,000 from the authorized reserve.
The Committee reviewed and unanimously recommended 2006-07
expenditures of $2,193,700 which included increases in administrative
and office salaries. 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 $0.035 per 25-pound container of tomatoes was determined by
examining the anticipated expenses and expected shipments and
considering available reserves. The recommended assessment rate would
generate $1,750,000 in income. Considering income from interest and
other sources of $190,000, with assessments, total income would be
approximately $253,700 below the anticipated expenses, which the
Committee determined to be acceptable.
A review of historical information and preliminary information
pertaining to the upcoming season indicates that the grower price for
the 2006-07 season could range between $8.27 and $12.95 per 25-pound
container or equivalent of tomatoes. Therefore, the estimated
assessment revenue for the 2006-07 season as a percentage of total
grower revenue could range between 0.3 and 0.4 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. 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
22, 2006, 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 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.
The 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 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.
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 2006-07 fiscal period began on August, 1, 2006, 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) 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 fiscal periods.
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
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:
On and after August, 1, 2006, an assessment rate of $0.035 per 25-
pound container or equivalent is established for Florida tomatoes.
Dated: November 14, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-9253 Filed 11-14-06; 1:09 pm]
BILLING CODE 3410-02-P