Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Revision of Special Purpose Shipment Exemption Provisions for Organic Citrus Fruit

SUMMARY: This interim final rule invites comments on the revision of

the administrative rules and regulations of the marketing order for

Florida citrus. This rule redefines the term ``Special Purpose

Shipper'' to mean those persons who handle citrus fruit which is

certified as organically grown under Florida law, and requires such

persons to certify that they will limit shipments of such fruit to

outlets handling organically grown fruit. This rule more precisely

defines organically grown Florida citrus fruit, and may increase the

market for organic shipments. This rule was unanimously recommended by

the Citrus Administrative Committee (committee), the agency responsible

for local administration of the marketing order.

DATES: Effective on May 25, 1994. Comments which are received by June

24, 1994 will be considered prior to issuance of any final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this action. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S,

P.O. Box 96456, Washington, DC 20090-6456, Fax: (202) 720-5698. All

comments should reference the docket number and the date and page

number of this issue of the Federal Register and will be made available

for public inspection in the Office of the Docket Clerk during regular

business hours.

FOR FURTHER INFORMATION CONTACT: Christian D. Nissen, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2523-S, Washington, DC 20090-6456; telephone: 202-720-

5127; or William G. Pimental, Southeast Marketing Field Office, USDA/

AMS, P.O. Box 2276, Winter Haven, Florida 33883; telephone: 813-299-

4770.

SUPPLEMENTARY INFORMATION: This interim final rule is issued under

Marketing Agreement and Marketing Order No. 905 (7 CFR part 905)

regulating the handling of oranges, grapefruit, tangerines, and

tangelos grown in Florida, hereinafter referred to as the order. This

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 (Department) is issuing this rule in

conformance with Executive Order 12866.

This interim final rule has been reviewed under Executive Order

12778, Civil Justice Reform. This interim final rule is not intended to

have retroactive effect. This interim final 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 the Secretary 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 requesting a modification of the order or to be exempted

therefrom. A handler is afforded the opportunity for a hearing on the

petition. After the hearing, the Secretary 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 in equity to review the

Secretary's ruling on the petition, provided a bill in equity is filed

not later than 20 days after the date of the entry of the ruling.

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (RFA), the Administrator of the Agricultural Marketing

Service (AMS) has considered the economic impact of this action on

small entities.

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 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 about 100 Florida citrus handlers subject to regulation

under the marketing order covering oranges, grapefruit, tangerines, and

tangelos grown in Florida, and about 11,000 growers of these citrus

fruits in Florida. Small agricultural service firms have been defined

by the Small Business Administration (13 CFR 121.601) as those having

annual receipts of less than $5,000,000, and small agricultural growers

are defined as those whose annual receipts are less than $500,000. A

minority of these handlers and a majority of the growers may be

classified as small entities.

The marketing order for Florida citrus provides for the

establishment of minimum grade and size requirements. The minimum grade

and size requirements are designed to provide fresh markets with fruit

of acceptable quality, thereby maintaining consumer confidence for

fresh Florida citrus. This helps create buyer confidence and

contributes to stable marketing conditions. This is in the interest of

producers, packers, and consumers, and is designed to increase returns

to Florida citrus growers.

The cultural practices of producers of organically grown citrus

differ from normal industry practices. Because of these differences,

organically grown fruit is usually required to meet a different grade

standard under the marketing order. This grade standard pertains only

to the external characteristics of the fruit, not the internal quality.

The different grade standard is needed to facilitate the marketing

of organic citrus. There are indications that organically grown citrus,

from a marketing standpoint, are a different commodity than

conventionally grown citrus. Organic citrus generally has higher

external damage. Organic fruit for the most part is marketed

differently, is not mixed with non-organic fruit, appeals only to

certain consumers, and is in many respects, a specialized commodity.

This action invites comments on changes to the administrative rules

and regulations prescribed under the Florida citrus marketing order.

This rule more precisely defines organic fruit, and the type of market

outlets which organically grown fruit may be sold in, free from certain

requirements imposed under the order. These changes were unanimously

recommended by the committee at its November 16, 1993 meeting.

Sections 905.146, 905.147, and 905.148 of the regulations provide

terms and conditions under which shippers may ship organically grown

Florida citrus fruit, as Special Purpose Shippers, with a conditional

release from certain grade requirements issued under Sec. 905.52 of the

order.

When the provisions concerning special purpose shipments were made

effective in 1978, there were no laws governing organic fruit and

vegetable growers in Florida. A ``Special Purpose Shipper'' was defined

under the marketing order as one who had certified that they would

handle only citrus fruit which they knew from their own personal

knowledge was produced on trees on which only compost, non-acidulated

fertilizer such as rock phosphate, dolomite, or ground limestone is

used, and to which no chemical insecticide or fungicide had been

applied. However, the State of Florida now requires all organically

grown fruits and vegetables to be certified. Accordingly, the committee

has recommended redefining the term ``Special Purpose Shipper'' in

Sec. 905.146 to mean a person who handles Florida citrus fruit that is

certified by a Florida Department of Agriculture and Consumer Services

licensed certifying agent as organically grown under Florida law. This

definition reflects that organic fruit has been certified under Florida

law, and also provides additional assurance that shippers claiming

organic status and utilizing the grade standards for organic fruit

qualify to do so.

Under Florida law, the Florida Department of Agriculture and

Consumer Services licenses independent third parties to act as

certifying agents. Growers who intend to sell organic fruit make an

application to a certifying agent. The certifying agent inspects and

certifies a grower's acreage as being in accordance with Florida law

and issues the grower a certificate. The certificate number is

transferred to a trip ticket which accompanies any shipments of fruit

grown on the certified acreage. When the handler receives the shipment,

a copy of the trip ticket is provided to the state inspector indicating

that the fruit is certified organic and can be packed using the

applicable organic grade standards.

The committee also recommended that Sec. 905.146 be revised to

require Special Purpose Shippers to certify that they will limit their

shipments of organically grown citrus fruit to outlets handling

organically grown fruits. This replaces the requirement that only

outlets registered and approved by the committee could receive such

fruit and ends the requirement that receivers of special purpose

shipments complete the applicable sections of the Report of Special

Purpose Shipments form.

The language in Sec. 905.146, 905.147, 905.148 concerning

Certificates of Privilege is being revised for clarity, and procedural

safeguards are being added to Sec. 905.147(c) dealing with suspensions

or denials of Certificates of Privilege.

This rule reflects the committee's and the Department's appraisal

of the need to revise the exemption provisions for special purpose

shipments, as specified. The Departmental view is that this rule may

have a beneficial impact on growers and shippers of organic citrus

fruit.

Based on the above, the Administrator of the AMS has determined

that this rule will not have a significant economic impact on a

substantial number of small entities.

In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.

chapter 35), the information collection requirements that are contained

in this rule have been previously approved by the Office of Management

and Budget (OMB) and have been assigned OMB number 0581-0094. This

action will reduce the reporting burden on approximately 95 receivers

of special purpose shipments of Florida citrus completing a section of

the Report of Special Purpose Shipments form, taking about .04 hour to

complete each report.

After consideration of all relevant material presented, including

the Committee's recommendation, and other available information, it is

found that this interim final 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) This rule updates provisions in the

regulations; (2) Florida citrus fruit handlers are aware of this rule

which was unanimously recommended by the committee at a public meeting

and they will need no additional time to comply with the revised

requirements; (3) shipment of the 1993-94 season Florida citrus fruit

crop is currently in progress; and (4) the rule provides a 30-day

comment period, and any comments received will be considered prior to

any finalization of this interim final rule.

List of Subjects in 7 CFR Part 905

Grapefruit, Marketing agreements, Oranges, Reporting and

recordkeeping requirements, Tangelos, Tangerines.

For the reasons set forth in the preamble, 7 CFR part 905 is

amended as follows:

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN

FLORIDA

1. The authority citation for 7 CFR part 905 continues to read as

follows:

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

2. Section 905.146 is revised to read as follows:

Sec. 905.146 Special purpose shipments.

(a) A Special Purpose Shipper is one who handles Florida citrus

fruit that is certified by a Florida Department of Agriculture and

Consumer Services licensed certifying agent as organically grown under

Florida law. In addition, the shipper shall certify that shipments will

be limited to outlets handling organically grown fruits. Any such

shipments shall be subject to a Certificate of Privilege issued by the

committee.

(b) To qualify for a Certificate of Privilege, each such shipper

must notify the committee prior to the first shipment of certified

organically grown Florida citrus fruit in the fiscal period of the

shipper's intent to ship such citrus, submit an application on forms

supplied by the committee, and agree to other requirements as set forth

in Secs. 905.147 and 905.148 inclusive, with respect to such shipments.

The shipper shall certify that no claims will be made, written or

verbal, concerning any alleged advantages of using, or any alleged

superiority of, fruit shipped under a Certificate of Privilege,

compared to other Florida produced citrus.

(c) Citrus meeting all other applicable requirements may be handled

without regard to grade regulations issued under Sec. 905.52 under the

following conditions:

(1) Such fruit meets requirements of the U.S. No. 2 Russet grade

and those requirements of the U.S. No. 1 grade relating to shape (form)

as such requirements are set forth in the revised U.S. Standards for

grades of Florida Oranges and Tangelos (7 CFR 2851.1140 through

2851.1180), the revised U.S. Standards for Florida Tangerines (7 CFR

2851.8180 through 2851.1835), or the revised U.S. Standards for Grades

of Florida Grapefruit (7 CFR 2851.750 through 2851.784). Such fruit

meets applicable minimum size requirements in effect for domestic

shipments of citrus fruits.

(2) All such citrus shall be inspected as required by Sec. 905.53

by the Federal or Federal-state Inspection Service prior to the time

such citrus is shipped from the packing facility, and certified as

meeting the applicable requirements.

(3) Be reported as required in Sec. 905.148.

4. Section 905.147, paragraphs (a) and (c) are revised to read as

follows:

Sec. 905.147 Certificate of privilege.

(a) Application. Application for Certificate of Privilege by a

Special Purpose Shipper shall be made on forms furnished by the

committee. Each application may contain, but need not be limited to,

the name and address of each handler; a list of certified organic

citrus fruit growers, including addresses; a list of receivers; the

quantity and variety of citrus to be shipped; a certification to the

Secretary of Agriculture and to the committee as to the truthfulness of

the information shown thereon; and any other appropriate information or

documents deemed necessary by the committee or its duly authorized

agents for the purposes stated in Sec. 905.146.

* * * * *

(c) Suspension or Denial of Certificate of Privilege. The committee

may investigate the handling of special purpose shipments under

Certificates of Privilege to determine whether Special Purpose Shippers

are complying with the requirements and regulations applicable to such

certificates. Whenever the committee finds that a Special Purpose

Shipper or consignee is failing to comply with the requirements and

regulations applicable to such certificates, the Certificate of

Privilege issued to such Special Purpose Shipper may be suspended or,

in the case of an application for the issuance of an initial

Certificate of Privilege, may be denied. Such suspension of a

certificate shall be for a reasonable period of time as determined by

the committee, but in no event shall it extend beyond the end of the

current fiscal period. In the case of the denial of an application for

the issuance of an initial certificate, such certificate shall be

denied until the applicant comes into compliance with the requirements

and regulations applicable to such certificates. Prior to suspending or

denying an application for a Certificate of Privilege, the committee

shall give the shipper or applicant reasonable advance notice in

writing of its intention and the facts and reasons therefor, and afford

the shipper or applicant an opportunity, either orally or in writing,

to present opposing facts and reasons. The shipper or applicant shall

be informed of the committee's determination in writing and in a timely

manner.

4. Section 905.148 is amended by revising paragraph (a) and the

first two sentences in paragraph (b) to read as follows:

Sec. 905.148 Reports of special purpose shipments under certificates

of privilege.

(a) Each handler of citrus shipping under Certificates of Privilege

shall supply the committee with reports on each shipment as requested

by the committee, on forms supplied by the committee, showing the name

and address of the shipper or shippers; name and address of the

certified organic Florida citrus fruit grower or growers supplying

fruit for such shipment; truck or other conveyance identification; the

loading point; destination, consignee; the inspection certificate

number; and any other information deemed necessary by the committee.

(b) One copy of the report on each shipment shall be forwarded by

the shipper to the committee within 10 days after such shipment, and

two copies of the report shall accompany each shipment to the receiver.

Upon the receipt of each shipment, the receiver shall complete the

applicable portion of the form and return one copy to the committee

within 10 days and one copy shall be retained by the shipper. * * *

Dated: May 18, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-12591 Filed 5-24-94; 8:45 am]

BILLING CODE 3410-02-P