83 FR 14357 - Tomatoes Grown in Florida; Decreased Assessment Rate

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 83, Issue 65 (April 4, 2018)

This rule implements a recommendation from the Florida Tomato Committee (Committee) for a decrease of the assessment rate established for the 2017-18 and subsequent fiscal periods for tomatoes grown in Florida, handled under the Marketing Order. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated. This rule also makes administrative revisions to the subpart headings to bring the language into conformance with the Office of Federal Register requirements.

[Federal Register Volume 83, Number 65 (Wednesday, April 4, 2018)]
[Rules and Regulations]
[Pages 14357-14359]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-06883]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Doc. No. AMS-SC-17-0051; SC17-966-1 FR]


Tomatoes Grown in Florida; Decreased 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 a decrease of the assessment rate established 
for the 2017-18 and subsequent fiscal periods for tomatoes grown in 
Florida, handled under the Marketing Order. The assessment rate will 
remain in effect indefinitely unless modified, suspended, or 
terminated. This rule also makes administrative revisions to the 
subpart headings to bring the language into conformance with the Office 
of Federal Register requirements.

DATES: Effective May 4, 2018.

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 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 rule is issued under Marketing Agreement No. 125 
and 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

[[Page 14358]]

U.S.C. 601-674), hereinafter referred to as the ``Act.'' The Committee 
locally administers the Order and is comprised of producers of tomatoes 
operating within the area of production.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This rule falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this rule does not meet the definition of a 
significant regulatory action, it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs'[thinsp]'' (February 2, 2017).
    This 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 assessment rate will be 
applicable to all assessable tomatoes beginning on August 1, 2017, 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 decreases the assessment rate established for the 2017-18 
and subsequent fiscal periods from $0.035 to $0.025 per 25-pound 
container or equivalent of tomatoes handled.
    The 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 2016-17 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, 2017, and unanimously recommended 
2017-18 expenditures of $1,494,600 and an assessment rate of $0.025 per 
25-pound container or equivalent of tomatoes. Last year's budgeted 
expenditures were also $1,494,600. The assessment rate of $0.025 is 
$0.010 lower than the rate currently in effect. The Committee 
recommended decreasing the assessment rate to reduce the assessment 
burden on handlers and utilize funds from the authorized reserve to 
help cover Committee expenses.
    The major expenditures recommended by the Committee for the 2017-18 
year include $450,000 for staff salaries, $400,000 for research, and 
$400,000 for education and promotion. Budgeted expenses for these items 
in 2016-17 were the same.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of Florida 
tomatoes, and the level of funds in the authorized reserve. Tomato 
shipments for the year are estimated at 33 million 25-pound containers, 
which should provide $825,000 in assessment income. Income derived from 
handler assessments, along with interest income and funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses. Funds in the reserve (currently $979,410) will be kept within 
the maximum permitted by the Order (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 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. 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 2017-18 budget and those 
for subsequent fiscal periods will 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 80 producers of Florida tomatoes in the 
production area and 47 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).
    According to industry and Committee data, the average annual price 
for fresh Florida tomatoes during the 2016-17 season was approximately 
$8.00 per 25-pound container, and total fresh shipments were 32.8 
million containers. Using the average price and shipment information, 
the number of handlers, and assuming a normal distribution, the 
majority of handlers have average annual receipts of less than 
$7,500,000. Based on production data, an estimated producer price of 
$3.00 per 25-pound container, and the number of Florida tomato 
producers, the average annual producer 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

[[Page 14359]]

producers may be classified as large entities.
    This rule decreases the assessment rate established for the 2017-18 
and subsequent fiscal periods from $0.035 to $0.025 per 25-pound 
container or equivalent of Florida tomatoes. The Committee unanimously 
recommended 2017-18 expenditures of $1,494,600 and an assessment rate 
of $0.025 per 25-pound container or equivalent handled. The assessment 
rate of $0.025 is $0.010 lower than the 2016-17 rate. The quantity of 
assessable Florida tomatoes for the 2017-18 fiscal period is estimated 
at 33 million 25-pound containers or equivalent. Thus, the $0.025 rate 
should provide $825,000 in assessment income. Income derived from 
handler assessments, along with interest income and funds from the 
Committee's authorized reserve, should be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2017-18 
year include $450,000 for staff salaries, $400,000 for research, and 
$400,000 for education and promotion. Budgeted expenses for these items 
in 2016-17 were also $450,000, $400,000, and $400,000, respectively.
    The Committee recommended decreasing the assessment rate to reduce 
the assessment burden on handlers and utilize funds from the authorized 
reserve to help cover Committee expenses.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources, such as the Committee's 
Budget and Finance Subcommittee, Education and Promotion Subcommittee, 
and the Research Subcommittee. Alternative expenditure levels were 
discussed by these groups, based upon the relative value of various 
activities to the Florida tomato industry. The Committee ultimately 
determined the assessment revenue, along with interest income and funds 
from authorized reserves should be adequate to cover budgeted expenses 
for the 2017-18 fiscal period.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the average 
producer price for the 2017-18 season could be about $6.50 per 25-pound 
container or equivalent of Florida tomatoes. Therefore, the estimated 
assessment revenue for the 2017-18 crop year as a percentage of total 
producer revenue should be around 0.4 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 August 
22, 2017, 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 OMB and assigned OMB No. 0581-0178 Vegetable and 
Specialty Crops. No changes in those requirements are necessary as a 
result of this action. 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 mentioned 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 December 11, 2017 (82 FR 58133). Copies of the proposed 
rule were also mailed or sent via facsimile to all Florida tomato 
handlers. Finally, the proposal was made available through the internet 
by USDA and the Office of the Federal Register. A 30-day comment period 
ending January 10, 2018, was provided for interested persons to respond 
to the proposal. No comments on the proposed assessment rate or the 
administrative revisions were 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, will tend to 
effectuate the declared policy 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, 7 CFR part 966 is 
amended 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.

[Subpart Redesignated as Subpart A]

0
2. Redesignate ``Subpart--Order Regulating Handling'' as ``Subpart A--
Order Regulating Handling''.

[Subpart Redesignated as Subpart B and Amended]

0
3. Redesignate ``Subpart--Rules and Regulations'' as Subpart B and 
revise the heading to read as follows:

Subpart B--Administrative Requirements

[Subpart Redesignated as Subpart C]

0
4. Redesignate ``Subpart--Assessment Rates'' as ``Subpart C--Assessment 
Rates''.

0
5. Section 966.234 is revised to read as follows:


Sec.  966.234  Assessment rate.

    On and after August 1, 2017, an assessment rate of $0.025 per 25-
pound container is established for Florida tomatoes.

[Subpart Redesignated as Subpart D and Amended]

0
6. Redesignate ``Subpart--Handling Regulations'' as Subpart D and 
revise the heading to read as follows:

Subpart D--Handling Requirements

    Dated: March 30, 2018.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2018-06883 Filed 4-3-18; 8:45 am]
BILLING CODE 3410-02-P