Tomatoes Grown in Florida; Amendment of Rules and Regulations

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV94-966-1FIR]

Tomatoes Grown in Florida; Amendment of Rules and Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a

final rule, without change, the provisions of an interim final rule

which clarified registered handler application and approval procedures

and the Florida Tomato Committee's (committee) authority to cancel a

handler's certificate of registration for good cause. That rule also

clarified that only registered handlers of Florida tomatoes may ship

such tomatoes in interstate commerce. The interim final rule also added

special purpose shipment outlets, redefined one of those outlets, and

brought the order's special purpose shipment provisions into conformity

with each other. Finally, that rule provided that handlers must report

packout information on a daily basis to the committee or an authorized

agent of the committee. Continuation of these changes is expected to

enhance compliance with the order.

EFFECTIVE DATE: January 23, 1995.

FOR FURTHER INFORMATION CONTACT: Aleck Jonas, Marketing Specialist,

Southeast Marketing Field Office, Fruit and Vegetable Division, AMS,

USDA, P.O. Box 2276, Winter Haven, Florida 33883-2276; (813) 299-4770

or FAX (813) 299-5169, or Shoshana Avrishon, Marketing Specialist,

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, Room 2523-S., P.O. Box 96456, Washington, DC 20090-6456;

telephone: (202) 720-3610, or FAX (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing

Agreement and Order No. 966 [7 CFR part 966], both as amended,

regulating the handling of tomatoes grown in Florida. The order is

authorized by the Agricultural Marketing Agreement Act of 1937, as

amended [7 U.S.C. 601-674], hereinafter referred to as the ``Act.''

The Department is issuing this rule in accordance with Executive

Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform and is not intended to have retroactive effect. 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 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 a 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 entry of the ruling.

Pursuant to requirements set forth in the Regulatory Flexibility

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

(AMS) has considered the economic impact of this rule 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 approximately 50 handlers of Florida tomatoes subject to

regulation under the marketing order and approximately 250 producers in

the production area. Small agricultural service firms, including tomato

handlers, are defined by the Small Business Administration [13 CFR

121.601] as those whose annual receipts are less than $5,000,000, and

small agricultural producers have been defined as those having annual

receipts of less than $500,000. The majority of the tomato handlers and

producers may be classified as small entities.

This rule finalizes an interim final rule that added a daily

packout report and special purpose shipment outlets, redefined one of

those outlets, and brought the order's special purpose shipment

provisions into conformity with each other. That rule clarified

registered handler application and approval procedures and the Florida

Tomato Committee's (committee) authority to cancel a handler's

certificate of registration for good cause. That rule also clarified

that only registered handlers of Florida tomatoes may ship such

tomatoes in interstate commerce. These changes were unanimously

recommended by the committee. In addition, the Department made

conforming changes.

The interim final rule was published in the Federal Register [59 FR

51087, October 7, 1994], with an effective date of October 7, 1994. The

rule amended Secs. 966.113, 966.120, and 966.323. Interested persons

were invited to submit written comments until November 7, 1994. Three

comments were received in support of the changes.

On May 31, 1994, the committee met to discuss the difficulty it had

experienced in collecting assessments from a few handlers and in

receiving complete, up-to-date packout information from some handlers.

The committee recommended several modifications to the order's existing

rules and regulations to improve these situations.

Handler Certification

Pursuant to Sec. 966.323 Handling regulation, fresh market

shipments of tomatoes by handlers to points outside the regulated area

must meet grade, size, inspection, and container requirements. Fresh

market shipments within the regulated area are not subject to such

requirements. Fresh market shipments within and outside the regulated

area are subject to assessments. The regulated area is defined as the

portion of the State of Florida which is bounded by the Suwannee River,

the Georgia Border, the Atlantic Ocean, and the Gulf of Mexico.

Basically, it is the entire State of Florida, except the Panhandle. The

production area is part of the regulated area.

Under Sec. 966.113 Registered handler, and for the purpose of this

order, registered handlers are persons who have adequate facilities for

grading tomatoes for market and who assume initial responsibility for

compliance with inspection, assessment, reporting, and other regulatory

requirements concerning tomatoes grown in the production area. Any

person who wishes to become a registered handler is required to make an

application for registration with the committee on forms prescribed by,

and available at the principle office of, the committee. If the

applicant has facilities which are determined by the committee as

adequate for grading tomatoes, the applicant may be approved as a

registered handler. ``Adequate facilities'' had been defined as those

being in a permanent location with nonportable equipment for the proper

grading, sizing and packing of tomatoes. The committee recommended two

minor additions to the definition: (1) The term ``washing'' was added

to the definition, as that activity is an integral part of the handling

process; and (2) the phrase ``grown in the production area'' was added

at the end of the definition to further identify the tomatoes being

handled. These changes were implemented by the interim final rule.

Most tomatoes produced in Florida are shipped fresh to markets

outside the regulated area. The committee's goal is to avoid marketing

problems associated with poor quality tomato shipments. The industry

has spent substantial sums of money to promote Florida tomatoes to the

trade and consumers. Such expenditures are predicated on the shipment

by handlers of good quality tomatoes, which buyers have come to expect

from Florida.

The committee reported that it had been difficult to collect

assessments from some handlers in the past. One handler indicated no

intention of paying assessments this year. Because of these compliance

difficulties, and to foster shipments of good quality tomatoes, the

committee recommended changes in the rules and regulations to

strengthen the registered handler procedures, clarify handler

responsibilities under the order, and enhance the committee's

compliance capabilities.

The committee recommended amending Sec. 966.113 and adopting new

provisions which: (1) Established that registered handlers must be

certified by the committee; (2) provided the committee with the

authority, criteria, and procedures for approving registered handler

certifications and for cancelling such certifications for failure to

pay assessments or provide reports to the committee; and (3) allowed

only registered handlers to lawfully ship tomatoes outside of the

regulated area. After considering the committee's recommendations, the

Department determined that the changes were necessary to effectuate the

declared policy of the Act.

New Sec. 966.113 contained an introductory statement explaining the

criteria that a handler must meet to be registered under the order.

These provisions include having adequate facilities and being certified

by the committee as a registered handler, handling tomatoes in

compliance with order requirements, obtaining inspection, submitting

required reports, and paying applicable assessments. Four of these

provisions were specified in Sec. 966.113. The provisions for

certification as a registered handler and submission of reports were

added to Sec. 966.113 to help the committee with its compliance

responsibilities and improve marketing assistance provided to handlers

under the order.

New paragraph (a) established qualifications for registered handler

certification. The committee or its duly authorized agent inspects

handling facilities to determine if those facilities meet the

requirements for certification. The facilities must be located in the

regulated area and be permanent, nonportable buildings. The equipment

in the facilities must also be nonportable and capable of properly

washing, grading, sizing, and packing tomatoes grown in the production

area. These requirements were the same as those in the former

definition for Adequate facilities in paragraph (e) of Sec. 966.323,

with the addition of washing as an activity and the reference to where

the tomatoes are produced. The definition was removed from paragraph

(e) of Sec. 966.323 and, as modified, added to new paragraph (a) of

Sec. 966.113 to define, in the appropriate place in the rules and

regulations, the kind of facilities and equipment needed for

certification as a registered handler.

New paragraph (b) of Sec. 966.113 specified the information

requested by the committee in the application for registered handler

certification. The information requested is common business

identification information.

New paragraph (c) of Sec. 966.113 provided that the committee or an

agent of the committee make the determination that an applicant's

facilities meet requirements. Such certification is made in writing by

the committee. Denial of certification, and the basis thereof, is also

made in writing to the applicant by the committee.

New paragraph (d) of Sec. 966.113 established criteria for

cancellation of a registered handler's certification, with the approval

of the Secretary, based on failure to pay assessments on a timely basis

and failure to provide required reports. A registered handler's

certification is also subject to cancellation, with the approval of the

Secretary, if the handler no longer has adequate facilities, as that

term is defined in Sec. 966.113(a). A cancelled certification is

reinstated once a handler demonstrates compliance with assessment,

reporting and facility requirements. New paragraph (d) also included

the exemption, currently in Sec. 966.113, concerning persons who make

deliveries of ungraded tomatoes to handling facilities.

New paragraph (e) of Sec. 966.113 provided that any inspection

certificate of tomatoes offered for inspection by a non-registered

handler contains a statement to that effect. The inspection certificate

for all such tomato lots reads ``Fails to meet the requirements of

Marketing Order No. 966 because the handler is not a registered

handler.'' Such failing certificate is issued, regardless of the grade,

size, or containerization of the tomatoes inspected. The committee

keeps the Federal State Inspection Service (inspection service) abreast

of all handlers' status. Any handler who is denied a registered handler

certificate or who has a registered handler certificate cancelled, may

appeal to the committee for reconsideration. Such appeal must be made

in writing.

The Florida Road Guard Bureau of the Florida Department of

Agriculture and Consumer Services releases tomato shipments for

interstate commerce only if the inspection certificates indicate that

such shipments meet marketing order requirements. Thus, persons or

handlers not certified as a registered handler by the committee will

not be able to ship tomatoes outside the regulated area.

The committee recommended that this provision be included under a

separate title and paragraph. Because inspection certification is

dependent on handler certification, the Department included this

recommendation as part of the new provision on certified registered

handlers in Sec. 966.113. For emphasis and to provide consistency in

regulations, the Department also added this requirement to paragraph

(a)(4) Inspection. in Sec. 966.323.

Section 966.113 provides that handlers must pay assessments on a

timely basis to maintain their registered handler certification. For

emphasis and to provide consistency in regulations, the Department also

added this requirement as new paragraph (e) Assessments. under

Sec. 966.323.

Certificates of Privilege

The committee recommended changing an incorrect citation in the

first sentence of Sec. 966.120 Application for Certificate of Privilege

which incorrectly referred to Sec. 966.53 of the order. The committee

stated that the intent of the section is to require Certificates of

Privilege for special purpose shipments authorized in Sec. 966.54

Shipments for special purposes. Thus, Sec. 966.54 was referenced in the

first sentence of Sec. 966.120. This adjustment did not change former

practices as the committee's use of Certificates of Privilege is

consistent with Sec. 966.54 of the order.

The interim final rule also changed Sec. 966.120 to be consistent

with the outlets specified in Sec. 966.323 Handling regulations. One

outlet currently specified in Sec. 966.120 was changed and three new

outlets were added. The term ``processing'' replaced the term

``canning'' to make the regulations consistent with current industry

practice. Pickling, experimental purposes and export, which were

specified in Sec. 966.323(b), are added to Sec. 966.120. The committee

also proposed that it have the authority, with the Secretary's

approval, to add other outlets to meet changing food technologies and

services which could benefit from receiving tomatoes shipped under

Certificate of Privilege. This authority was added to Sec. 966.120.

The Department made conforming changes to paragraph (b) of

Sec. 966.323 to make that paragraph consistent with the changes to

Sec. 966.120. The term ``canning'' was changed to ``processing'' and

committee authority to add special purpose outlets, with the

Secretary's approval, was added.

The Department also added a definition for ``processing'' to

paragraph (e) Sec. 966.323 Definitions. ``Processing'' was defined as

the manufacture of any tomato product which has been converted into

juice, or preserved by any commercial process, including canning,

dehydrating, drying, and the addition of chemical substances. Also,

paragraph (e) of Sec. 966.323 was redesignated as paragraph (g).

Packout Reports

The committee also recommended that all handlers be required to

present daily packout reports to the inspection service. The inspection

service collects these reports from most handlers for inspection

billing purposes and sends a daily packout report to the committee.

All handlers maintain records of their daily packout activity based

on the grade, size, and containers of tomatoes handled. The inspection

service collects this data at the end of each work day for inspection

billing purposes. As a service to the committee and tomato handlers,

the inspection service compiles this information (received from its

various inspectors) and reports it to the committee at the end of the

day or the following morning. The committee compiles this data into a

daily, industry-wide, packout report. The report is considered an

indispensable tool for handlers to assess daily tomato market

conditions and is disseminated, upon request, to registered handlers.

However, some handlers had failed to provide their packout data to

the inspection service on a timely basis to allow inclusion of the

handler's data in each daily, industry-wide report. To be a useful

tool, the industry-wide report must be accurate and include, to the

extent possible, the total industry packout. Because the report is such

a valuable marketing tool for handlers, the committee voted unanimously

to propose that each registered handler be required to report the

handler's daily packout data to the inspection service in a timely

manner.

The packout data that handlers provide to the inspection service,

to the committee directly, or to another agent of the committee is data

that is routinely compiled by each handler as part of the handler's

normal, daily operating records. The reporting deadline of the end of

the working day, as designated by the committee, has not presented an

undue burden on handlers because the data requested is routinely

recorded by handlers at the end of each working day. Individual handler

data collated and disseminated in an industry-wide report has not

disclosed confidential information or the business position of

individual handlers.

The committee recommended that this change be added to the rules

and regulations as a separate, new number, title and paragraph.

However, because the new provision established a reporting requirement

on handlers, the Department inserted the provision as a separate, new

paragraph under Sec. 966.323. Thus, a new paragraph (e) was added to

the handling regulation and former paragraph (e) Definitions. was

redesignated as paragraph (g).

Assessments

Finally, the committee recommended that a clarification be added to

the rules and regulations to clearly state that handlers must pay

assessments to maintain their certification as registered handlers.

Failure of some handlers to pay their assessments places an unfair

burden upon those handlers who comply with order requirements. The

Department added this clarification to Sec. 966.323 Handling regulation

because payment of assessments is a requirement of handlers under the

order. A new paragraph (f) Assessments. was added to Sec. 966.323. This

paragraph stated that failure of a registered handler to pay

assessments in a timely manner will result in cancellation of the

registered handler's status, thus making that handler ineligible to

ship tomatoes outside of the regulated area. Current committee

collection procedures are:

(1) Weekly assessment billings during the harvest season;

(2) Payment within 30 days;

(3) Followed by a demand letter specifying the end of a 15-day

extended notice period; and

(4) Referral to the Department for legal action. Under this rule, a

handler who has not paid assessments after expiration of the extended

notice period provided in the demand letter is considered out of

compliance and is reported to the inspection service as a non-

registered handler.

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

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

substantial number of small entities.

In accordance with the Paper Work Reduction Act of 1980, [44 U.S.C.

Chapter 35], the information collection requirements contained in the

interim final rule were submitted to the Office of Management and

Budget (OMB) for approval and assigned OMB No. 0581-0073. Because

handlers complete a form to be certified as a registered handler, no

additional OMB approval was needed for such registration. However, that

rule provided that each registered handler, at the end of each day in

which tomatoes were handled by the registered handler, furnish the

committee or it's designated agent an accurate accounting of the number

of tomato containers packed that day. This report provides the grade,

size, and containers of tomatoes packed by the handler each packing

day. Because the information is readily available from each day's

packout, the report takes five minutes to complete. The committee needs

this information to compile a daily packout report which is used by

handlers in their marketing efforts. This provision is consistent with

current industry practice. It is estimated that 50 handlers submit

daily reports and receive marketing assistance during the marketing

period October 10, through June 15 each year. The OMB approved this

information collection request on November 18, 1994.

After consideration of all relevant material presented, the

information and recommendations submitted by the committee, and other

information, it is found that finalizing the interim final rule,

without change, as published in the Federal Register [59 FR 51087,

October 7, 1994], 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

Accordingly, the interim final amending 7 CFR part 966 which was

published at 59 FR 51087 on October 7, 1994, is adopted as a final rule

without change.

Dated: December 19, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-31612 Filed 12-22-94; 8:45 am]

BILLING CODE 3410-02-P