[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
________________________________________________________________________
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