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Federal Register / Vol. 72, No.

10 / Wednesday, January 17, 2007 / Rules and Regulations 1919

Research Subcommittee, and Education A proposed rule concerning this § 966.234 Assessment rate.
and Promotion Subcommittee. action was published in the Federal On and after August 1, 2006, an
Alternative expenditure levels were Register on November 16, 2006 (71 FR assessment rate of $0.035 per 25-pound
discussed by these groups, based upon 66702). Copies of the proposed rule container or equivalent is established
the relative value of various research were also mailed or sent via facsimile to for Florida tomatoes.
projects to the tomato industry. The all Florida tomato handlers. Finally, the Dated: January 11, 2007.
assessment rate of $0.035 per 25-pound proposal was made available through
Lloyd C. Day,
container of assessable tomatoes was the Internet by USDA and the Office of
Administrator, Agricultural Marketing
determined by examining the the Federal Register. A 15-day comment
Service.
anticipated expenses and expected period ending December 1, 2006, was
[FR Doc. 07–149 Filed 1–11–07; 4:45 pm]
shipments and considering available provided for interested persons to
BILLING CODE 3410–02–P
reserves. The assessment rate should respond to the proposal. No comments
generate $1,750,000 in income. were received.
Considering income from interest and A small business guide on complying DEPARTMENT OF AGRICULTURE
other sources of $190,000, with with fruit, vegetable, and specialty crop
assessments, total income should be marketing agreements and orders may Agricultural Marketing Service
approximately $253,700 below the be viewed at: http://www.ams.usda.gov/
anticipated expenses, which the fv/moab.html. Any questions about the 7 CFR Part 966
Committee determined to be acceptable. compliance guide should be sent to Jay
A review of historical information and Guerber at the previously mentioned [Docket No. FVO6–966–1 FR]
preliminary information pertaining to address in the FOR FURTHER INFORMATION Tomatoes Grown in Florida; Partial
the upcoming season indicates that the CONTACT section.
Exemption to the Minimum Grade
grower price for the 2006–07 season After consideration of all relevant Requirements
could range between $8.27 and $12.95 material presented, including the
per 25-pound container or equivalent of information and recommendation AGENCY: Agricultural Marketing Service,
tomatoes. Therefore, the estimated submitted by the Committee and other USDA.
assessment revenue for the 2006–07 available information, it is hereby found ACTION: Final rule.
fiscal period as a percentage of total that this rule, as hereinafter set forth,
grower revenue could range between 0.3 will tend to effectuate the declared SUMMARY: This rule provides a partial
and 0.4 percent. policy of the Act. exemption to the minimum grade
This action increases the assessment Pursuant to 5 U.S.C. 553, it also found requirements under the marketing order
obligation imposed on handlers. While and determined that good cause exists for tomatoes grown in Florida (order).
assessments impose some additional for not postponing the effective date of The Florida Tomato Committee
costs on handlers, the costs are minimal this rule until 30 days after publication (Committee) locally administers the
and uniform on all handlers. Some of in the Federal Register because: (1) The order. Under the order, Florida tomatoes
the additional costs may be passed on 2006–07 fiscal period began on August must meet at least a U.S. No. 2 grade
to producers. However, these costs are 1, 2006, and the marketing order before they can be shipped and sold
offset by the benefits derived by the requires that the rate of assessment for outside the regulated area. This rule
operation of the marketing order. In each fiscal period apply to all assessable exempts UglyRipeTM (UglyRipe)
addition, the Committee’s meeting was Florida tomatoes handled during such tomatoes from the shape requirements
widely publicized throughout the fiscal period; (2) the Committee needs to associated with the U.S. No. 2 grade.
Florida tomato industry and all have sufficient funds to pay its expenses This change increases the volume of
interested persons were invited to which are incurred on a continuous UglyRipe tomatoes that will meet the
attend the meeting and participate in basis; and (3) handlers are aware of this order requirements, and will help
Committee deliberations on all issues. action which was unanimously increase shipments and availability of
Like all Committee meetings, the August recommended by the Committee at a these tomatoes for consumers.
22, 2006, meeting was a public meeting public meeting and is similar to other EFFECTIVE DATE: This final rule becomes
and all entities, both large and small, assessment rate actions issued in past effective January 18, 2007.
were able to express views on this issue. fiscal periods. Also, a 15-day comment FOR FURTHER INFORMATION CONTACT:
This rule imposes no additional period was provided for in the proposed William Pimental, Marketing Specialist,
reporting or recordkeeping requirements rule. or Christian Nissen, Regional Manager,
on either small or large Florida tomato Southeast Marketing Field Office,
handlers. As with all Federal marketing List of Subjects in 7 CFR Part 966 Marketing Order Administration
order programs, reports and forms are Marketing agreements, Reporting and Branch, Fruit and Vegetable Programs,
periodically reviewed to reduce recordkeeping requirements, Tomatoes. AMS, USDA; Telephone: (863) 324–
information requirements and 3375, Fax: (863) 325–8793, or e-mail:
■ For the reasons set forth in the
duplication by industry and public William.Pimental@USDA.gov, or
sector agencies. preamble, 7 CFR part 966 is amended as
follows: Christian.Nissen@usda.gov.
The AMS is committed to complying Small businesses may request
with the E-Government Act, to promote PART 966—TOMATOES GROWN IN information on complying with this
the use of the Internet and other FLORIDA regulation by contacting Jay Guerber,
information technologies to provide Marketing Order Administration
increased opportunities for citizen ■ 1. The authority citation for 7 CFR Branch, Fruit and Vegetable Programs,
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access to Government information and part 966 continues to read as follows: AMS, USDA, 1400 Independence
services, and for other purposes. Avenue SW., STOP 0237, Washington,
USDA has not identified any relevant Authority: 7 U.S.C. 601–674. DC 20250–0237; telephone: (202) 720–
Federal rules that duplicate, overlap, or ■ 2. Section 966.234 is revised to read 2491, Fax: (202) 720–8938, or e-mail:
conflict with this rule. as follows: Jay.Guerber@usda.gov.

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1920 Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Rules and Regulations

SUPPLEMENTARY INFORMATION: This final part of the elements of grade. Section concern that providing an exemption for
rule is issued under Marketing 966.323 of the order’s rules and UglyRipe tomatoes could result in the
Agreement No. 125 and Marketing regulations specifies, in part, the shipment of U.S. No. 3 grade tomatoes
Order No. 966, both as amended (7 CFR minimum grade requirements for of other varieties, contrary to the
part 966), regulating the handling of Florida tomatoes. The current minimum objectives of the exemption and the
tomatoes grown in certain designated grade requirement for Florida tomatoes order.
counties in Florida, hereinafter referred is a U.S. No. 2. The specifics of this To address this concern, the
to as the ‘‘order.’’ The marketing grade requirement are listed under the producers of UglyRipe tomatoes
agreement and order are effective under U.S. Standards for Grades of Fresh pursued entry into USDA’s Identity
the Agricultural Marketing Agreement Tomatoes (7 CFR 51.1855–51.1877). Preservation (IP) program. This program
Act of 1937, as amended (7 U.S.C. 601– The U.S. Standards for Grades of was developed by the Agricultural
674), hereinafter referred to as the Fresh Tomatoes (Standards) specify the Marketing Service to assist companies
‘‘Act.’’ criteria tomatoes must meet to grade a in marketing products having unique
The Department of Agriculture U.S. No. 2, including that they must be traits. The program provides
(USDA) is issuing this rule in reasonably well formed, and not more independent, third-party verification of
conformance with Executive Order than slightly rough. These two elements the segregation of a company’s unique
12866. relate specifically to the shape of the product at every stage, from seed,
This final rule has been reviewed tomato. The definitions section of the production and processing, to
under Executive Order 12988, Civil Standards defines reasonably well distribution. UglyRipe tomatoes were
Justice Reform. This rule is not intended formed as not decidedly kidney shaped, granted positive program status in early
to have retroactive effect. This rule will lopsided, elongated, angular, or 2006.
not preempt any State or local laws, otherwise decidedly deformed. The This partial exemption only extends
regulations, or policies, unless they term slightly rough means that the to UglyRipe tomatoes covered under the
present an irreconcilable conflict with tomato is not decidedly ridged or IP program. As such, this should help
this rule. grooved. This rule amends § 966.323 to ensure that only UglyRipe tomatoes are
The Act provides that administrative exempt UglyRipe tomatoes from these shipped under the exemption. In
proceedings must be exhausted before shape requirements as specified under addition, this exemption is contingent
parties may file suit in court. Under the grade for a U.S. No. 2. upon UglyRipe tomatoes continuing to
section 608c(15)(A) of the Act, any UglyRipe tomatoes are a trademarked meet the requirements of the IP
handler subject to an order may file tomato variety bred to look and taste program.
with USDA a petition stating that the like an heirloom-type tomato. One of the This rule exempts UglyRipe tomatoes
order, any provision of the order, or any characteristics of this variety is its from the shape requirements associated
obligation imposed in connection with appearance. UglyRipe tomatoes are with the U.S. No. 2 grade. This change
the order is not in accordance with law often shaped differently from other increases the volume of UglyRipe
and request a modification of the order round tomatoes. Depending on the time tomatoes that will meet order
or to be exempted therefrom. A handler of year and the weather, UglyRipe requirements, and will help increase
is afforded the opportunity for a hearing tomatoes are concave on the stem end shipments and availability of these
on the petition. After the hearing USDA with deep, ridged shoulders. They can tomatoes. In addition, it is hoped that
would rule on the petition. The Act also appear kidney shaped and this change will help promote
provides that the district court of the lopsided. Because of this variance in continued innovation within the
United States in any district in which shape and appearance, UglyRipe industry.
the handler is an inhabitant, or has his tomatoes can have difficulty meeting the Section 8e of the Act provides that
or her principal place of business, has shape requirements of the U.S. No. 2 when certain domestically produced
jurisdiction to review USDA’s ruling on grade. commodities, including tomatoes, are
the petition, provided an action is filed This rule provides UglyRipe tomatoes regulated under a Federal marketing
not later than 20 days after the date of with a partial exemption from the grade order, imports of that commodity must
the entry of the ruling. requirements under the order. UglyRipe meet the same or comparable grade,
This final rule provides a partial tomatoes are only exempt from the size, quality, and maturity requirements.
exemption to the minimum grade shape requirements of the grade and are Since this rule provides a partial
requirements prescribed under the still required to meet all other aspects of exemption to the minimum grade
order. The order’s rules and regulations the U.S. No. 2 grade. UglyRipe tomatoes requirements under the domestic
specify that Florida tomatoes must meet also continue to be required to meet all handling regulations, a corresponding
at least a U.S. No. 2 grade before they other requirements under the marketing change to the import regulations is also
can be shipped and sold outside the order, such as size, pack and container, needed. A final rule providing the same
regulated area. This rule exempts and inspection. partial exemption to the minimum grade
UglyRipe tomatoes from the shape Prior to the 1998–99 season, the requirements under the import
requirements associated with the U.S. Committee recommended that the regulations will be issued as a separate
No. 2 grade. This change increases the minimum grade be increased from a action.
volume of UglyRipe tomatoes that will U.S. No. 3 to a U.S. No. 2. Committee
meet the order requirements, and will members agree that increasing the grade Final Regulatory Flexibility Analysis
help increase shipments and availability requirement has been very beneficial to Pursuant to requirements set forth in
of these tomatoes for consumers. In the industry and in the marketing of the Regulatory Flexibility Act (RFA), the
addition, it is anticipated that this Florida tomatoes. Further, some Agricultural Marketing Service (AMS)
change will help promote continued Committee members have stated that a has considered the economic impact of
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innovation within the industry. large part of the volume of the standard this action on small entities.
Section 966.52 of the order provides commercial varieties of tomatoes which Accordingly, AMS has prepared this
the authority for the establishment of fail to make the grade are rejected final regulatory flexibility analysis.
grade and size requirements for Florida because of their shape and appearance. The purpose of the RFA is to fit
tomatoes. Form and shape represent Consequently, there was some industry regulatory actions to the scale of

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Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Rules and Regulations 1921

business subject to such actions in order tomatoes were involved with the IP Eighty-eight comments were received
that small businesses will not be unduly program prior to this rule and have during the comment period in response
or disproportionately burdened. already received a successful audit. to the proposal. Of the comments
Marketing orders issued pursuant to the Therefore, the additional costs received, 79 were in support of the
Act, and rules issued thereunder, are associated with this action are those regulation and 9 were in opposition.
unique in that they are brought about costs related to maintaining and One comment was received after the
through group action of essentially complying with the IP program. It is close of the comment period.
small entities acting on their own anticipated that these costs will be The comments in support of the
behalf. Thus, both statutes have small minimal and will be offset by the proposal expressed appreciation for the
entity orientation and compatibility. increased sales of UglyRipe tomatoes. taste of UglyRipe tomatoes, and
There are approximately 100 Finally, UglyRipe tomatoes are still supported a greater market availability
producers of tomatoes in the production required to meet the majority of the for UglyRipe tomatoes. Several
area and approximately 70 handlers requirements for a U.S. No. 2 grade, and commenters stated that UglyRipe
subject to regulation under the are usually priced higher than U.S. No. tomatoes compared favorably with
marketing order. Small agricultural 2 graded standard commercial variety homegrown tomatoes. Other
producers are defined by the Small tomatoes. Therefore, this action should commenters compared the taste as being
Business Administration (SBA) as those not have a price depressing effect on equal to local tomatoes, even in winter
having annual receipts less than standard varieties, and because of the when local tomatoes were not available.
$750,000, and small agricultural service difference in price, this exemption Several of the comments stated that
firms are defined as those whose annual should not have a significant impact on good taste was of greater importance
receipts are less than $6,500,000 (13 the market share for standard than appearance. Commenters also
CFR 121.201). commercial varieties of Florida expressed that they have had difficulty
Based on industry and Committee tomatoes. in finding UglyRipe tomatoes available
data, the average annual price for fresh One alternative to this action that was for purchase and supported this rule
Florida tomatoes during the 2004–05 considered was to not provide an and its efforts to increase availability.
season was approximately $12.50 per exemption from shape requirements for Nine comments were received in
25-pound container, and fresh UglyRipe tomatoes. This option would opposition to the proposed rule. Of
shipments totaled 53,025,915 25-pound not have allowed for an increase in the these comments, five expressed
cartons of tomatoes. Committee data volume of UglyRipe tomatoes that concerns regarding this proposal’s
indicates approximately 27 percent of would meet the order requirements, and impact on orderly marketing. Four
the handlers handle 95 percent of the would not help increase shipment and commenters stated that the current
total volume shipped outside the availability of these tomatoes. Therefore, marketing order requirements provide
regulated area. Based on the average this alternative was rejected. stability to the industry. One commenter
price, about 75 percent of handlers This final rule provides a partial stated that the standards established
could be considered small businesses exemption to the minimum grade under the order are key to the
under SBA’s definition. In addition, requirements under the Florida tomato establishment of an orderly market for
based on production, grower prices as marketing order. Accordingly, this rule Florida growers and that this rule will
reported by the National Agricultural will not impose any additional reporting weaken the industry’s ability to
Statistics Service, and the total number or recordkeeping requirements on either maintain an orderly market. Another
of Florida tomato growers, the average small or large tomato handlers. As with commenter stated that the proposed rule
annual grower revenue is below all Federal marketing order programs, does not establish, maintain, or support
$750,000. Thus, the majority of handlers reports and forms are periodically orderly marketing conditions, but does
and producers of Florida tomatoes may reviewed to reduce information the exact opposite.
be classified as small entities. requirements and duplication by One of the main goals of marketing
This final rule provides a partial industry and public sector agencies. orders is to establish orderly marketing
exemption to the minimum grade The AMS is committed to complying conditions for those commodities
requirements for tomatoes grown in with the E-Government Act, to promote covered under marketing orders. As
Florida. Under the order, Florida the use of the Internet and other previously noted, this partial exemption
tomatoes must meet at least a U.S. No. information technologies to provide only extends to UglyRipe tomatoes.
2 grade before they can be shipped and increased opportunities for citizen Further, this rule only provides
sold outside the regulated area. This access to Government information and UglyRipe tomatoes with a partial
final rule exempts UglyRipe tomatoes services, and for other purposes. exemption from the shape requirements
from the shape requirements specified As noted in the initial regulatory of the U.S. No. 2 grade. UglyRipe
under the Standards for a U.S. No. 2 flexibility analysis, USDA has not tomatoes are still subject to the
grade. This change increases the volume identified any relevant Federal rules requirements for maturity, ripeness,
of UglyRipe tomatoes that will meet the that duplicate, overlap or conflict with softness, development, decay, and
order requirements, and will help this final rule. damage as specified under the
increase shipments and availability of A proposed rule concerning this Standards for a U.S. No. 2 grade. Even
these tomatoes for consumers. This final action was published in the Federal with this partial exemption, the
rule amends the provisions of § 966.323. Register on June 29, 2006 (71 FR 37014). requirements for UglyRipe tomatoes are
Authority for this action is provided in Copies of the rule were mailed or sent still significantly higher than those for
§ 966.52 of the order. via facsimile to all Committee members U.S. No. 3 grade tomatoes.
This change represents a small and tomato handlers. Finally, the rule Because this partial exemption is
increase in costs for producers and was made available through the Internet narrowly defined, the vast majority of
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handlers of UglyRipe tomatoes, by USDA and the Office of the Federal the tomatoes shipped from Florida will
primarily from costs associated with Register. A 60-day comment period still meet the requirements for a U.S.
developing and maintaining the IP ending August 28, 2006, was provided No. 2 grade. Therefore, this change will
program. However, the majority of to allow interested persons to respond not diminish the overall benefits of the
facilities associated with UglyRipe to the proposal. established grade standard.

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1922 Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Rules and Regulations

Consequently, this change should not impact on the tomato industry. One compliance guide should be sent to Jay
have an adverse impact on the orderly commenter stated that this rule will Guerber at the previously mentioned
market for Florida tomatoes. cause a market share loss and loss of address in the FOR FURTHER INFORMATION
Five commenters stated that this sales. Another comment states that this CONTACT section.
change would allow UglyRipe tomatoes will increase supply, which will
After consideration of all relevant
to circumvent the requirements of the negatively affect price.
order. Two comments declared that this We disagree because this partial matter presented, including the
rule would allow all UglyRipe tomatoes exemption is so narrowly defined, and information and recommendation
produced to be sold outside of the only applies to UglyRipe tomatoes, it submitted by the Committee and other
regulated area. Another comment stated should not result in a significant available information, it is hereby found
that this rule would allow UglyRipe increase in the overall supply of that this rule, as hereinafter set forth,
tomatoes to escape the standards tomatoes. Also, this action should not will tend to effectuate the declared
applicable to all other tomatoes. have a significant impact on price. Prior policy of the Act.
This partial exemption will not allow to the 1998–99 season, the Committee It is further found that good cause
UglyRipe tomatoes to circumvent the recommended that the minimum grade exists for not postponing the effective
requirements of the order, or allow all be increased from a U.S. No. 3 to a U.S. date of this rule until 30 days after
UglyRipe tomatoes produced in Florida No. 2. The reason for this action was publication in the Federal Register (5
to be shipped outside the regulated area. that U.S. No. 3 grade tomatoes were U.S.C. 553) because the regulatory
As stated above, UglyRipe tomatoes will having a price depressing effect on the period will begin October 10, 2006.
still have to meet the majority of the market. This is because U.S. No. 3 grade Also, a 60-day comment period was
requirements for U.S. No. 2 grade tomatoes of standard commercial provided for in the proposed rule.
tomatoes, and will have to be inspected varieties sell at prices below those for
to ensure these requirements are met. U.S. No. 2 grade tomatoes. However, in List of Subjects in 7 CFR Part 966
UglyRipe tomatoes also continue to be the case of UglyRipe tomatoes, they are
required to meet all other requirements still required to meet the majority of the Marketing agreements, Reporting and
under the marketing order, such as size, requirements for a U.S. No. 2 grade, and recordkeeping requirements, Tomatoes.
pack and container, and assessment are usually priced higher than U.S. No. ■ For the reasons set forth in the
provisions. In addition, UglyRipe 2 graded standard commercial variety preamble, 7 CFR part 966 is amended as
tomatoes must meet the requirements of tomatoes. Therefore this action should follows:
the IP program. not have a price depressing effect on
Five commenters expressed concern standard varieties, and because of the PART 966—TOMATOES GROWN IN
that providing this exemption for the difference in price this exemption FLORIDA
UglyRipe tomato will create a loophole, should not have a significant impact on
which will result in the shipment of the market share for standard ■ 1. The authority citation for 7 CFR
U.S. No. 3 grade tomatoes of other commercial varieties of Florida part 966 continues to read as follows:
varieties by other producers. One of the tomatoes.
commenters stated that with this Two commenters also stated that this Authority: 7 U.S.C. 601–674.
change, every farmer in Florida will be regulation would have a negative impact
selling his off shaped fruit. Another on small growers. The commenters ■ 2. Amend § 966.323, by adding a new
commenter wrote that this action stated that when USDA did its initial paragraph (d)(5) to read as follows:
presents too many opportunities for regulatory flexibility analysis USDA § 966.323 Handling regulation.
domestic growers and importers to sell only considered the impact on
tomatoes of inferior quality. Another producers and handlers of UglyRipe * * * * *
commenter stated that they had no tomatoes. The commenters stated that (d) * * *
doubt that efforts will be made to this rule would have a negative impact (5) For UglyRipeTM tomatoes.
market U.S. No. 3 grade tomatoes that on small producers and handlers of UglyRipeTM tomatoes must meet all the
resemble UglyRipe tomatoes. standard commercial varieties. requirements of this section: Provided,
We disagree with these comments. In its initial regulatory flexibility That UglyRipeTM tomatoes shall be
There are safeguards in place to address analysis, USDA found that this change graded and at least meet the
these issues. In addition to the existing represents a small increase in costs for requirements specified for U.S. No. 2
inspection requirements, and producers and handlers of UglyRipe under the U.S. Standards for Grades of
compliance efforts, this partial tomatoes, primarily from costs
Fresh Tomatoes, except they are exempt
exemption only extends to UglyRipe associated with developing and
tomatoes covered under the IP program. from the requirements that they be
maintaining the IP program. As
This program was developed by AMS reasonably well formed and not more
discussed above, this rule should not
and provides independent, third-party than slightly rough, and Provided,
significantly impact demand or price for
verification of the segregation of a Further that the UglyRipeTM tomatoes
standard commercial varieties.
company’s product at every stage, from Consequently, we do not agree that this meet the requirements of the Identity
seed, production and processing, to action will negatively impact growers Preservation program, Fresh Products
distribution. This will help ensure that and handlers of standard commercial Branch, Fruit and Vegetable Programs,
only UglyRipe tomatoes are shipped varieties. AMS, USDA.
using this partial exemption, as only Accordingly, no changes will be made * * * * *
handlers covered under the IP program to the rule as proposed, based on Dated: January 12, 2007.
will be allowed to pack under the comments received.
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A small business guide on complying Lloyd C. Day,


exemption. Further, USDA plans to
closely monitor compliance with this with fruit, vegetable, and specialty crop Administrator, Agricultural Marketing
exemption. marketing agreements and orders may Service.
Three commenters stated that this be viewed at: http://www.ams.usda.gov/ [FR Doc. 07–162 Filed 1–12–07; 11:58 am]
rule will have a negative economic fv/moab.html. Any questions about the BILLING CODE 3410–02–P

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