Tomatoes Grown in Florida; Modification of Handling Requirements, 35222-35227 [2020-12183]

Download as PDF 35222 Proposed Rules Federal Register Vol. 85, No. 111 Tuesday, June 9, 2020 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. DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 966 [Doc. No. AMS–SC–20–0004; SC20–966–1 PR] Tomatoes Grown in Florida; Modification of Handling Requirements Agricultural Marketing Service, USDA. ACTION: Proposed rule. AGENCY: This proposed rule invites comment on recommendations from the Florida Tomato Committee (Committee) to change the handling requirements in the Marketing Order regulating the handling of tomatoes grown in Florida. This action would revise the exemption, container, and definition sections under the handling requirements and would update language to reflect current industry practices. DATES: Comments must be received by July 9, 2020. ADDRESSES: Interested persons are invited to submit written comments concerning this proposal. Comments must be sent to the Docket Clerk, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250–0237; Fax: (202) 720–8938; or internet: http://www.regulations.gov. All comments should reference the document 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, or can be viewed at: http:// www.regulations.gov. All comments submitted in response to this proposal will be included in the record and will be made available to the public. 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. jbell on DSKJLSW7X2PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 22:44 Jun 08, 2020 Jkt 250001 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: Steven.Kauffman@usda.gov or Christian.Nissen@usda.gov. 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: Richard.Lower@usda.gov. SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, proposes an amendment to 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 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 operating within the production area. The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this proposed 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’ ’’ (February 2, 2017). This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is not intended to have retroactive effect. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 section 608c(15)(A) of the Act, any handler subject to a marketing order may file with USDA a petition stating that the marketing order, any provision of the marketing order, or any obligation imposed in connection with the marketing order is not in accordance with law and request a modification of the marketing order or to be exempted therefrom. A 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 (U.S.) 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 invites comments on revising the exemption, container, and definition sections in the handling requirements of the Order. The Committee believes implementing the recommended changes would allow the tomato industry to meet its domestic market needs for quality, stabilize returns to producers, and bring the handling requirements in line with current industry practices. The Committee unanimously recommended these changes at its meeting on November 12, 2019. Section 966.5 defines ’’tomatoes’’ to include all varieties of the edible fruit (Lycopersicon esculentum) commonly known as tomatoes and grown within the production area. Section 966.52 provides authority to the Committee to establish handling requirements for tomatoes grown within the regulated area. This includes, in part, establishing grade, size, quality, and maturity requirements, as well as weight, capacity, dimensions, markings, and pack requirements, which may be used in the handling of tomatoes. Section 966.60 requires Florida tomatoes be inspected and certified by authorized representatives of the Federal or Federal-State Inspection Service (FSIS), or such other inspection service as the Secretary shall designate. Section 966.323 sets forth the handling requirements for Florida tomatoes, specifying the grade, size, and container requirements, including definitions and exemptions. The handling requirements also establish packout reporting requirements. E:\FR\FM\09JNP1.SGM 09JNP1 jbell on DSKJLSW7X2PROD with PROPOSALS Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Proposed Rules The Committee met on August 21, October 2, and November 12, 2019, to examine and discuss updates to the handling requirements. The Committee considered the major changes in the Florida tomato industry, including the types of tomatoes produced, production methods, and the container applications used at the handling operations. Following these discussions, the Committee’s recommendations were to: Remove the exemption for pear shaped or Roma type tomatoes, revise the exemption and definition sections for greenhouse and hydroponic tomatoes, adjust the pack and container requirements, and update language to reflect current industry practices. Over the last twenty years, the varieties of tomatoes produced in Florida for the fresh market have changed. When the handling requirements were created, Florida production of Roma tomatoes were a smaller portion of the fresh market and other varieties like Grape tomatoes were not yet developed. In recent years the production of Roma tomatoes has grown and is now a significantly larger portion of fresh market sales. The average volume of fresh Florida Roma tomato shipments from the last three seasons reported by USDA Market News is 7,324,400 25-pound containers. This number is consistent with the Committee estimates of fresh market Roma tomatoes handled in the production area. The average volume reported by USDA Market News over the three-year period from 1999 to 2001 is 6,217,200 25-pound containers. During the twenty-year period from 1999 to 2019, the total volume of regulated round tomatoes in Florida has decreased by half. According to USDA Market News shipping point data, total Florida production has decreased from approximately 60 million 25-pound containers for the 1999–20 season to 30 million for the 2018–19 season. Roma tomatoes have an increased market share representing nearly a quarter of the total tomato volume produced in the production area. Further, according to the Global Agricultural Trade System (GATS) and Committee data, imports of Roma tomatoes from Mexico has quadrupled from approximately 12 million in 1999 to 48 million 25-pound containers in 2019. Over this 20-year period, based on USDA Market News and Committee reports, total U.S. fresh round tomato shipments from Florida and imported from Mexico [during the regulated period] decreased from approximately 92 million to 76 million 25-pound containers while U.S. Roma shipments increased from approximately 18 VerDate Sep<11>2014 22:44 Jun 08, 2020 Jkt 250001 million to 52 million 25-pound containers. These shipment numbers indicate Roma production as a percentage of the entire fresh tomato market in the U.S. has increased dramatically. This trend is demonstrated in taking the change between the 1999–2000 and 2018–2019 seasonal volume of Roma tomatoes as a percentage of total production for comparison. The proportion of Roma tomatoes as a percentage of total tomato shipments from both Florida and Mexico has increased from 19.6 percent (18 million divided by 92 million × 100) to 68.4 percent (52 million divided by 76 million × 100) during the regulated months. The increase in Roma volume and its proportion of the U.S. fresh market has impacted the Florida industry and the U.S. tomato market. When Roma tomatoes were first exempt from the handling requirements, they were a niche market item and represented a minor portion of sales. With Roma production representing an increasing share of Florida tomato production, and a growing share of the domestic tomato market, the Committee discussed removing the handling requirements exemption for Roma tomatoes and requiring them to meet same grade and maturity requirements as round tomatoes. Committee members indicated that Roma tomatoes can have quality defects such as puffing and scars. The puffing makes the Roma tomato soft and scars are not favorable to consumers in the marketplace. Since these quality factors were not regulated, there were concerns the quality factors were negatively affecting the returns on Roma varieties as well as other fresh market varieties. The Committee recognized the benefits of having the existing grade and maturity requirements for round tomatoes and agreed that establishing requirements for Roma tomatoes would help improve quality and help stabilize returns to the industry’s producers by keeping low quality tomatoes out of the fresh market. Consequently, the Committee unanimously recommended removing the exemptions for Roma tomatoes except the size requirements. The Committee recommended leaving the size exemption in place for Roma tomatoes since they are naturally smaller than round varieties, which makes it difficult for them to meet the existing size requirements. Handlers of Roma varieties are not currently required to register with the Committee or pay assessments on Roma varieties shipped, since they are exempt from requirements in the Order. With this proposed change, Roma tomatoes would PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 35223 be subject to grade, pack and container, inspection, and reporting requirements, and handlers would be subject to paying assessment fees. Committee members and FSIS stated they are not aware of any Florida handlers that only handle Roma tomatoes. Members did indicate it is possible that some producers are only producing Roma tomatoes and that some small operations may be shipping Roma varieties inside the regulated area. The Committee estimates that handlers currently registered with the Committee are handling 90 to 95 percent of the Roma volume produced in the production area. Further, as registered handlers, they are familiar with the inspection, assessment, and reporting requirements established in the Order. Thus, handlers should be wellpositioned to accommodate this change. The Committee also discussed the growth in alternative production methods, especially in the area of protected culture production. Protected culture production is now more prevalent, sophisticated, and diverse than it was ten years ago, and includes the use of shade structures and other types of portable structures for use with field production. While most Florida growers still produce in an open-field environment, there has been some movement toward protected culture production in both high and low technology structures within the production area. Currently, greenhouse and hydroponic production are exempt from the handling requirements. The regulations define ‘‘greenhouse tomatoes’’ as tomatoes grown indoors. With more producers considering the use of protected culture production and other production technologies, there have been questions as to what meets the definition of greenhouse. Committee members agreed it was important to provide the industry with more clarity regarding this exemption, so producers are clear about which production types are exempt from the handling requirements. Protected culture tomato production can include rudimentary shade cloth and tunnel structures, to more sophisticated shade houses, to high-tech greenhouses and hothouses. Shadehouse production often utilizes structures placed in the open field environment in order to protect the plants from adverse weather conditions, and the structures are often portable in nature. Greenhouse and hydroponic production usually mean permanent structures built of glass or similar materials that provide a controlled environment. The costs and the E:\FR\FM\09JNP1.SGM 09JNP1 jbell on DSKJLSW7X2PROD with PROPOSALS 35224 Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Proposed Rules environmental factors that affect production are also vastly different between a controlled environment verses a shade-house operation in the field. Greenhouse and hydroponic tomatoes have been exempted from the handling requirements given that their cost of production, growing conditions, and market segment were historically different compared to field-grown tomatoes. However, there are some products in the national market grown in covered production, particularly those grown in lower technology shade houses, which may compete directly with tomatoes Florida growers produce in the open field. As such, the Committee believes it is important to be more precise in what production practices warrant an exemption. With the increase in shade-house and other in- field technologies competing with field grown tomatoes for markets at similar price points, the Committee determined the exemption definition should be adjusted to better reflect the growing conditions that are significantly different than an open-field environment and production methods utilized in the production area. Committee members agreed that shadehouse and similar production methods should not be granted an exemption since these methods of production do not significantly differ from that of open-field production. Further, these types of technologies are being used within the production area. Conversely, Committee staff has identified only one producer using permanent greenhouse structures in the production area. As such, the Committee recommended revising the exemption and definition paragraphs of the handling requirements pertaining to greenhouse and hydroponic tomatoes to better define what types of production methods are exempt. This action would eliminate the current exemptions for greenhouse and hydroponic production and would establish a new exemption and definition for controlled environment production. The new definition would define ‘‘controlled environment’’ to mean tomatoes grown in a soilless medium, in above ground containers, using hydroponic methods within a fullyenclosed permanent aluminum or fixed steel structure clad in glass, impermeable plastic, or polycarbonate, using automated irrigation and climate control, and with the surface dirt completely concealed under concrete or a synthetic lining (e.g. polypropylene ground cover). Tomatoes produced in a structure meeting the requirements of controlled environment would remain VerDate Sep<11>2014 22:44 Jun 08, 2020 Jkt 250001 exempt from the handling requirements. The controlled environment definition was developed with input from the production area greenhouse and hydroponic producer. The Committee expects greenhouse and hydroponic operations in the production area currently exempt to meet the proposed definition of ‘‘controlled environment.’’ The proposed definition would provide producers with better clarity on which production types would meet the exemption requirements. The Committee also recommended clarifying the exempt types of tomatoes under the handling requirements by adding tomatoes-on-the-vine or cluster type tomatoes (TOV), Campari (cocktail), and grape tomatoes. These varieties were not a large portion of the market when the handling requirements were last updated, but now are produced by growers in the production area. Like cherry tomatoes, which already have a specific exemption, these varieties are specialty varieties, and the Committee was not interested in regulating these varieties at this time. This change would clarify that these varieties are exempt from Order requirements, along with cherry tomatoes. The Committee also recommended modifying the exemption relating to net weight requirements to better reflect current industry practices. Specialty packed, yellow meated, and place packed tomatoes are currently exempt from the net weight and the weight marking requirements of the handling regulations. In its discussions, the Committee recognized there has been considerable innovation over the last 10 years in packaging for retail sales. While most retail packaging had been done by repackers, there has been an increase in such packaging by handlers. Several handlers now hand place tomatoes into single or two-layer containers known as place-packed. Some handlers also pack directly into sleeves, bags, and clamshells for retail-ready sales. With this type of packaging, it is very difficult to pack to any set weight requirement as they are normally packed to a count rather than based on weight. Consequently, the Committee recommended adding language that would also exempt retail-ready packaging from the net weight and marking requirements. The Committee also recommended defining ‘‘retailready packaging’’ as tomatoes packed by a first handler into consumer packs (sleeves, bags, clamshells) of two pounds or less. The Committee also recommended removing the definition for ‘‘specialty packed red ripe tomatoes’’ as no one in the production area packs PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 to meet that definition. The Committee believes these changes would make the regulations easier to understand and better reflect current market conditions. In another industry change, it has become more common for handlers to use Reusable Plastic Containers (RPCs) for packing tomatoes rather than corrugated cardboard containers. RPCs can be washed and sanitized for reuse and this makes them practical for packing at handling operations. Also, there are retailers that prefer to receive their tomatoes in RPCs. Additionally, the use of RPCs is more prevalent by those handlers packing Roma varieties that would also be required to meet container requirements under this action. However, RPCs and their use are not specifically included in the existing container requirements. As part of the recommended updates to the handling requirements, the Committee agreed that language regarding the use of RPCs should be added to the container requirements. Committee members voted to revise the container requirements to include the use of RPCs along with language to ensure containers used are clean and sanitized prior to reuse. The Committee also recommended modifying the current container language that states containers in which the tomatoes are packed ‘‘must be clean and bright in appearance without marks, stains, or other evidence of previous use’’ to specifically apply to corrugated cardboard containers, so use and guidance is provided for both RPCs and cardboard containers. Finally, this proposed rule would also make several other changes to the handling requirements to update language and to reflect current industry practices. Such changes include adding or revising paragraph headings to provide additional clarity, including Roma type tomatoes under the packout reporting requirements, and updating contact information. This action would revise the exemption, container, and definition sections in the handling requirements. Implementing the recommended changes would allow the Florida tomato industry to meet its domestic market needs for quality, stabilize returns to producers and make the requirements more reflective of current industry practices. Section 8e of the Act (7 U.S.C. 608e– 1) provides that when certain domestically produced commodities, including tomatoes, are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality, and maturity requirements. Since this E:\FR\FM\09JNP1.SGM 09JNP1 Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS change would adjust the exemption requirements to require previously exempt tomatoes to meet grade and/or size requirements, a corresponding change would need to be made to the import requirements for tomatoes. The corresponding changes to the import regulations are being addressed in a separate rulemaking. Initial 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 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 approximately 50 producers of Florida tomatoes in the production area and 37 handlers subject to regulation by the Order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $1,000,000 and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 (13 CFR 121.201). According to industry and Committee data, the average annual price for fresh Florida tomatoes during the 2018–19 season was approximately $12.56 per 25-pound container, and total fresh shipments were 25.9 million containers. Using the average price and shipment information, the number of handlers, and assuming a normal distribution, most handlers have average annual receipts of less than $30,000,000, ($12.56 times 25.9 million containers equals $325,304,000 divided by 37 handlers equals $8,792,000 per handler). In addition, based on production data, an estimated producer price of $6.00 per 25-pound container, the number of Florida tomato producers, and assuming a normal distribution, the average annual producer revenue is above $1,000,000 ($6.00 times 25.9 million containers equals $155,400,000 divided by 50 producers equals $3,108,000 per producer). Thus, most handlers of Florida tomatoes may be classified as small agricultural service firms while the majority of producers may be VerDate Sep<11>2014 22:44 Jun 08, 2020 Jkt 250001 classified as large entities under the SBA definition. This proposed rule invites comments on revising the exemption, container, and definition sections in the Order’s handling requirements. Implementing the recommended changes to the handling requirements would allow the tomato industry to meet its domestic market needs for quality, stabilize returns to producers and would bring the handling requirements in line with current industry practices. The Committee unanimously approved this recommendation at its public meeting held on November 12, 2019. This rule would revise § 966.323 as authorized by §§ 966.5, 966.52, and 966.60 of the Order. These proposed changes could result in some additional costs for the industry. This action would eliminate the exemption for Roma varieties, which would require handlers to pay assessments and meet inspection requirements on fresh Roma tomatoes shipped outside the regulated area. Consequently, for those handlers shipping Roma type tomatoes, this action would increase the assessment obligation and would mean additional inspection fees. The cost of inspection is $0.029 for each 25-pound container as set by the State of Florida, and the current assessment rate is $0.025 per 25pound container. As both costs are based on the volume of containers shipped, it is anticipated this action would increase the cost burden on both large and small handlers of Roma tomatoes proportionally. According to USDA Market News data and Committee estimates, there are approximately 7.3 million 25-pound containers of fresh market Roma tomatoes handled each season in the production area. With the additional assessments from Roma tomatoes, the Committee would collect approximately $182,500 ($.025 × 7,300,000 25-pound containers) more in assessments annually. Collecting additional assessments on Roma tomatoes would represent an increase of 27 percent of last year’s $647,500 collected from handlers. Additionally, handlers would be responsible for the cost of inspection on each 25-pound container of Roma type tomatoes. Using the Market News and Committee estimates above, handlers should expect to be responsible for an additional $0.029 per 25-pound container equivalent handled. The estimated additional inspection cost to the entire industry would total $211,700 (7,300,000 × $0.029) in inspection fees charged annually. PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 35225 Each handler who handles tomatoes grown in the production area must be certified as a registered handler by the Committee in order to ship tomatoes outside of the regulated area. Committee members and FSIS indicated that they were not aware of any handlers that only handled Roma varieties of tomatoes. When considering the approximate Roma volume of 7.3 million 25-pound containers, it is estimated that the handlers already registered with the Committee are handling 90 to 95 percent of the Roma volume in the Order’s production area. Therefore, most handlers that are shipping Roma tomatoes should already be registered with the Committee. These handlers are familiar with the inspection, assessment, and reporting requirements established in the Order. Thus, handlers should be wellpositioned to accommodate this change. Aside from the exemption change for Roma type tomatoes, it is not anticipated that the other changes to the exemption, container, and definition paragraphs would result in any additional cost, as most of these changes were recommended to align the requirements with current industry practices. Regarding the change in the exemptions for greenhouse and hydroponic production, the Committee worked to ensure that production area producers that were utilizing these exemptions would meet the new exemption requirements for controlled environment, so this change would not represent any additional costs for producers in the production area. It is not anticipated that this action would impose an additional reporting burden on handlers. The FSIS reports the volume inspected to the Committee, and all Roma inspections and reporting criteria would be reported on existing forms. Handlers are familiar with the reporting requirements and would just be reporting additional volume on existing forms. Consequently, this should not result in more than minimal additional costs. In addition to the potential costs, this change would also provide benefits to the overall industry. Roma tomatoes can have difficulty with certain quality requirements, which can have a negative impact on grower returns. Given the increased importance of Roma type tomatoes in the marketplace, establishing grade and maturity requirements for Roma type tomatoes would have a stabilizing effect on the market for Roma tomatoes and help increase returns to handlers and producers. The additional revenue to the Committee should help with marketing, research, and education E:\FR\FM\09JNP1.SGM 09JNP1 jbell on DSKJLSW7X2PROD with PROPOSALS 35226 Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Proposed Rules efforts. Thus, the additional costs for inspection and assessment should be offset by the benefits of this action. The benefits of this action are expected to be equally available to tomato producers and handlers, regardless of their size. The Committee considered alternatives to these proposed changes. Prior to this recommendation, the Committee discussed not providing any exemptions for greenhouse or hydroponic production operations in the handling requirements. However, after determining there is limited greenhouse production in the production area, the Committee agreed providing an exemption for growers that meet the new definition for controlled environment would best serve the industry. The Committee also considered establishing grade and maturity requirements for grape tomatoes, but members determined they are not interested in regulating these tomatoes at this time. The Committee considered continuing the exemption for Roma tomatoes, but after considering the proportion of the market that Roma tomatoes now represents, the Committee decided that regulating Roma varieties would benefit the industry. The Committee also considered not adding an additional paragraph to address RPCs, but with the use of RPCs becoming more common, it was determined container language should be updated to better reflect current industry practices. Therefore, the alternatives were rejected. 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 are necessary in those requirements as a result of this proposed action. 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. VerDate Sep<11>2014 22:44 Jun 08, 2020 Jkt 250001 USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this proposed rule. The Committee’s meetings were widely publicized throughout the Florida tomato industry, and all interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the August 21, October 2, and November 12, 2019, meetings were public meetings, and all entities, both large and small, were able to express their views on these issues. Interested persons are invited to submit comments on this proposed rule, including the regulatory and information collection impacts of this proposed action on small businesses. 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. A 30-day comment period is provided to allow interested persons to respond to this proposal. All written comments timely received will be considered before a final determination is made on this matter. List of Subjects in 7 CFR Part 966 Marketing agreements, Reporting and recordkeeping requirements, Tomatoes. For the reasons set forth in the preamble, the Agriculture Marketing Services proposes to amend 7 CFR part 966 as follows: PART 966—TOMATOES GROWN IN FLORIDA 1. The authority citation for 7 CFR part 966 continues to read as follows: ■ Authority: 7 U.S.C. 601–674. 2. Amend § 966.323 by: a. Revising the section heading; b. Revising paragraph (a)(3)(iii); c. Adding paragraph (a)(3)(iv); d. Revising paragraphs (d), (e) and (g). The revisions and additions read as follows: ■ ■ ■ ■ ■ § 966.323 Handling Requirements. * * * * * (a) * * * (3) * * * (iii) The cardboard container in which the tomatoes are packed must be clean and bright in appearance without marks, stains, or other evidence of previous use. (iv) The Reusable Plastic Containers (RPCs) in which the tomatoes are PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 packed must be cleaned and sanitized prior to use. * * * * * (d) Exemptions (1) For types. The following types of tomatoes are exempt from these requirements: (i) Cherry tomatoes; (ii) Grape tomatoes; (iii) Cocktail-type tomatoes commonly referred to as Campari tomatoes; (iv) Tomatoes-on-the-vine, also known as Cluster tomatoes or TOVs. (2) For plum tomato types commonly referred to as Roma tomatoes. Roma tomatoes must meet the requirements of this section, except they are exempt from the size requirements specified in paragraph (a)(2) of this section. (3) For yellow meated tomatoes. Yellow meated tomatoes are exempt from the container net weight requirements specified in paragraph (a)(3)(i) of this section, and the requirement that each container or lid shall be marked to indicate the designated net weight as specified in paragraph (a)(3)(ii) of this section, but must meet the other requirements of this section. (4) For special packed tomatoes. Single layer and two layer place packed tomatoes, and tomatoes packed in retailready packaging, are exempt from the container net weight requirements specified in paragraph (a)(3)(i) of this section, and the requirement that each container or lid shall be marked to indicate the designated net weight as specified in paragraph (a)(3)(ii) of this section, but must meet the other requirements of this section. (5) For growing environment. Tomatoes grown in a controlled environment are exempt from the requirements in this section. (6) For field-packed tomatoes. Producer field-packed tomatoes must meet all of the requirements of this section except for the requirement that all containers must be packed at registered handler facilities as specified in paragraph (a)(3)(ii) of this section, and the requirement that such tomatoes designated as size 6 × 6 must meet the maximum diameter requirement specified in paragraph (a)(2)(i) of this section: Provided, That 6 × 6 and larger is used to indicate the listed size designation on containers. (7) For minimum quantity. Each person subject to the Order may handle up to but not to exceed 50 pounds of tomatoes per day without regard to the requirements of this section, but this exemption shall not apply to any shipment or any portion thereof of over 50 pounds of tomatoes. E:\FR\FM\09JNP1.SGM 09JNP1 jbell on DSKJLSW7X2PROD with PROPOSALS Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Proposed Rules (8) For repacked tomatoes. Tomatoes that met the inspection requirements of paragraph (a)(4) of this section which are resorted, regraded, and repacked by a handler who has been designated as a ‘‘Certified Tomato Repacker’’ by the committee are exempt from: (i) The tomato grade classifications of paragraph (a)(1) of this section; (ii) The size classifications of paragraph (a)(2) of this section, except that the tomatoes shall be at least 29⁄32 inches in diameter; and (iii) The container weight requirements of paragraph (a)(3) of this section. (9) For adverse growing conditions. Upon recommendation of the committee, tomatoes that are elongated or otherwise misshapen due to adverse growing conditions may be exempted by the Secretary from the provisions of paragraph (a)(2) of this section. (10) For UglyRipeTM and Vintage RipesTM tomatoes. UglyRipeTM and Vintage RipesTM tomatoes must meet all the requirements of this section: Provided, That UglyRipeTM and Vintage RipesTM tomatoes shall be graded and at least meet the requirements specified for U.S. No. 2 under the U.S. Standards for Grades of Fresh Tomatoes, except they are exempt from the requirements that they be reasonably well formed and not more than slightly rough, and Provided, Further that the UglyRipeTM and Vintage RipesTM tomatoes meet the requirements of the Identity Preservation program, Specialty Crops Inspection Division, Specialty Crops Program, AMS, USDA. (e) Report of packouts. Each registered handler shall, at the end of each day handling activities have been conducted, or the following morning as the committee may prescribe, provide to the committee or its designated agent a complete and accurate accounting of the number of containers of non-exempt tomatoes packed that day. The report shall include an accounting of the tomato type (e.g. Round, Roma), grade, size, maturity, and net weight of the containers packed in each category. The total packout report shall be provided to the committee or its authorized agent in a timely fashion that allows the committee to compile a daily, industrywide packout report. * * * * * (g) Definitions. Certified Tomato Repacker means a repacker of tomatoes in the regulated area that has the facilities for handling, regrading, resorting, and repacking tomatoes into consumer sized packages and has been certified as such by the committee. VerDate Sep<11>2014 22:44 Jun 08, 2020 Jkt 250001 Controlled environment means tomatoes grown in a soilless medium, in above ground containers, using hydroponic methods within a fullyenclosed permanent aluminum or fixed steel structure clad in glass, impermeable plastic, or polycarbonate, using automated irrigation and climate control, and with the surface dirt completely concealed under concrete or a synthetic lining (e.g., polypropylene ground cover). Pickling as used in §§ 966.120 and 966.323 means to preserve tomatoes in a brine or vinegar solution. Processing as used in §§ 966.120 and 966.323 means the manufacture of any tomato product that has been converted into juice, or preserved by any commercial process, including canning, dehydrating, drying, and the addition of chemical substances. Further, all processing procedures must result in a product that does not require refrigeration until opened. Producer field-packed tomatoes means tomatoes that at the time of inspection are #3 color or higher (according to color classification requirements in the U.S. tomato standards), that are picked and placepacked in new containers in the field by a producer as defined in § 966.150 and transferred to a registered handler’s facilities for final preparation for market. Retail-ready packaging means tomatoes packed by a first handler into consumer packs (e.g., sleeves, bags, clamshells) of two pounds or less. U.S. tomato standards means the revised United States Standards for Fresh Tomatoes (7 CFR 51.1855 through 51.1877) effective October 1, 1991, as amended, or variations thereof specified in this section, provided that § 51.1863 shall not apply to tomatoes covered by this part. Other terms in this section shall have the same meaning as when used in this part and the U.S. tomato standards. Bruce Summers, Administrator, Agricultural Marketing Service. [FR Doc. 2020–12183 Filed 6–8–20; 8:45 am] BILLING CODE P PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 35227 DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2020–0561; Product Identifier 2019–SW–019–AD] RIN 2120–AA64 Airworthiness Directives; Bell Textron Inc. (Type Certificate Previously Held by Bell Helicopter Textron Inc.) Helicopters Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). AGENCY: The FAA proposes to adopt a new airworthiness directive (AD) for Bell Textron Inc. (Type Certificate previously held by Bell Helicopter Textron Inc.) (Bell), Model 204B, 205A– 1, and 212 helicopters. This proposed AD was prompted by reports of corrosion on main rotor hub tensiontorsion strap (TT strap) assemblies. This proposed AD would require reducing the life limit of a certain part-numbered TT strap assembly and prohibit installing this TT strap assembly on any helicopter. The FAA is proposing this AD to address the unsafe condition on these products. DATES: The FAA must receive comments on this proposed AD by July 24, 2020. ADDRESSES: You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods: • Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments. • Fax: 202–493–2251. • Mail: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE, Washington, DC 20590. • Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. For service information identified in this NPRM, contact Bell Textron Inc., P.O. Box 482, Fort Worth, TX 76101; telephone 817–280–3391; fax 817–280– 6466; or at https:// www.bellcustomer.com. You may view the referenced service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N–321, Fort Worth, TX 76177. SUMMARY: E:\FR\FM\09JNP1.SGM 09JNP1

Agencies

[Federal Register Volume 85, Number 111 (Tuesday, June 9, 2020)]
[Proposed Rules]
[Pages 35222-35227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12183]


========================================================================
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.

========================================================================


Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / 
Proposed Rules

[[Page 35222]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Doc. No. AMS-SC-20-0004; SC20-966-1 PR]


Tomatoes Grown in Florida; Modification of Handling Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule invites comment on recommendations from the 
Florida Tomato Committee (Committee) to change the handling 
requirements in the Marketing Order regulating the handling of tomatoes 
grown in Florida. This action would revise the exemption, container, 
and definition sections under the handling requirements and would 
update language to reflect current industry practices.

DATES: Comments must be received by July 9, 2020.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-
0237; Fax: (202) 720-8938; or internet: http://www.regulations.gov. All 
comments should reference the document 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, or can be viewed at: http://www.regulations.gov. All 
comments submitted in response to this proposal will be included in the 
record and will be made available to the public. 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, 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, 
proposes an amendment to 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 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 operating within 
the production area.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed 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' '' (February 2, 2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have 
retroactive effect.
    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 a marketing order may file with USDA a 
petition stating that the marketing order, any provision of the 
marketing order, or any obligation imposed in connection with the 
marketing order is not in accordance with law and request a 
modification of the marketing order or to be exempted therefrom. A 
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 (U.S.) 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 invites comments on revising the exemption, 
container, and definition sections in the handling requirements of the 
Order. The Committee believes implementing the recommended changes 
would allow the tomato industry to meet its domestic market needs for 
quality, stabilize returns to producers, and bring the handling 
requirements in line with current industry practices. The Committee 
unanimously recommended these changes at its meeting on November 12, 
2019.
    Section 966.5 defines ''tomatoes'' to include all varieties of the 
edible fruit (Lycopersicon esculentum) commonly known as tomatoes and 
grown within the production area. Section 966.52 provides authority to 
the Committee to establish handling requirements for tomatoes grown 
within the regulated area. This includes, in part, establishing grade, 
size, quality, and maturity requirements, as well as weight, capacity, 
dimensions, markings, and pack requirements, which may be used in the 
handling of tomatoes. Section 966.60 requires Florida tomatoes be 
inspected and certified by authorized representatives of the Federal or 
Federal-State Inspection Service (FSIS), or such other inspection 
service as the Secretary shall designate.
    Section 966.323 sets forth the handling requirements for Florida 
tomatoes, specifying the grade, size, and container requirements, 
including definitions and exemptions. The handling requirements also 
establish packout reporting requirements.

[[Page 35223]]

    The Committee met on August 21, October 2, and November 12, 2019, 
to examine and discuss updates to the handling requirements. The 
Committee considered the major changes in the Florida tomato industry, 
including the types of tomatoes produced, production methods, and the 
container applications used at the handling operations. Following these 
discussions, the Committee's recommendations were to: Remove the 
exemption for pear shaped or Roma type tomatoes, revise the exemption 
and definition sections for greenhouse and hydroponic tomatoes, adjust 
the pack and container requirements, and update language to reflect 
current industry practices.
    Over the last twenty years, the varieties of tomatoes produced in 
Florida for the fresh market have changed. When the handling 
requirements were created, Florida production of Roma tomatoes were a 
smaller portion of the fresh market and other varieties like Grape 
tomatoes were not yet developed. In recent years the production of Roma 
tomatoes has grown and is now a significantly larger portion of fresh 
market sales.
    The average volume of fresh Florida Roma tomato shipments from the 
last three seasons reported by USDA Market News is 7,324,400 25-pound 
containers. This number is consistent with the Committee estimates of 
fresh market Roma tomatoes handled in the production area. The average 
volume reported by USDA Market News over the three-year period from 
1999 to 2001 is 6,217,200 25-pound containers.
    During the twenty-year period from 1999 to 2019, the total volume 
of regulated round tomatoes in Florida has decreased by half. According 
to USDA Market News shipping point data, total Florida production has 
decreased from approximately 60 million 25-pound containers for the 
1999-20 season to 30 million for the 2018-19 season. Roma tomatoes have 
an increased market share representing nearly a quarter of the total 
tomato volume produced in the production area.
    Further, according to the Global Agricultural Trade System (GATS) 
and Committee data, imports of Roma tomatoes from Mexico has quadrupled 
from approximately 12 million in 1999 to 48 million 25-pound containers 
in 2019. Over this 20-year period, based on USDA Market News and 
Committee reports, total U.S. fresh round tomato shipments from Florida 
and imported from Mexico [during the regulated period] decreased from 
approximately 92 million to 76 million 25-pound containers while U.S. 
Roma shipments increased from approximately 18 million to 52 million 
25-pound containers.
    These shipment numbers indicate Roma production as a percentage of 
the entire fresh tomato market in the U.S. has increased dramatically. 
This trend is demonstrated in taking the change between the 1999-2000 
and 2018-2019 seasonal volume of Roma tomatoes as a percentage of total 
production for comparison. The proportion of Roma tomatoes as a 
percentage of total tomato shipments from both Florida and Mexico has 
increased from 19.6 percent (18 million divided by 92 million x 100) to 
68.4 percent (52 million divided by 76 million x 100) during the 
regulated months. The increase in Roma volume and its proportion of the 
U.S. fresh market has impacted the Florida industry and the U.S. tomato 
market.
    When Roma tomatoes were first exempt from the handling 
requirements, they were a niche market item and represented a minor 
portion of sales. With Roma production representing an increasing share 
of Florida tomato production, and a growing share of the domestic 
tomato market, the Committee discussed removing the handling 
requirements exemption for Roma tomatoes and requiring them to meet 
same grade and maturity requirements as round tomatoes.
    Committee members indicated that Roma tomatoes can have quality 
defects such as puffing and scars. The puffing makes the Roma tomato 
soft and scars are not favorable to consumers in the marketplace. Since 
these quality factors were not regulated, there were concerns the 
quality factors were negatively affecting the returns on Roma varieties 
as well as other fresh market varieties. The Committee recognized the 
benefits of having the existing grade and maturity requirements for 
round tomatoes and agreed that establishing requirements for Roma 
tomatoes would help improve quality and help stabilize returns to the 
industry's producers by keeping low quality tomatoes out of the fresh 
market.
    Consequently, the Committee unanimously recommended removing the 
exemptions for Roma tomatoes except the size requirements. The 
Committee recommended leaving the size exemption in place for Roma 
tomatoes since they are naturally smaller than round varieties, which 
makes it difficult for them to meet the existing size requirements. 
Handlers of Roma varieties are not currently required to register with 
the Committee or pay assessments on Roma varieties shipped, since they 
are exempt from requirements in the Order. With this proposed change, 
Roma tomatoes would be subject to grade, pack and container, 
inspection, and reporting requirements, and handlers would be subject 
to paying assessment fees.
    Committee members and FSIS stated they are not aware of any Florida 
handlers that only handle Roma tomatoes. Members did indicate it is 
possible that some producers are only producing Roma tomatoes and that 
some small operations may be shipping Roma varieties inside the 
regulated area. The Committee estimates that handlers currently 
registered with the Committee are handling 90 to 95 percent of the Roma 
volume produced in the production area. Further, as registered 
handlers, they are familiar with the inspection, assessment, and 
reporting requirements established in the Order. Thus, handlers should 
be well-positioned to accommodate this change.
    The Committee also discussed the growth in alternative production 
methods, especially in the area of protected culture production. 
Protected culture production is now more prevalent, sophisticated, and 
diverse than it was ten years ago, and includes the use of shade 
structures and other types of portable structures for use with field 
production. While most Florida growers still produce in an open-field 
environment, there has been some movement toward protected culture 
production in both high and low technology structures within the 
production area.
    Currently, greenhouse and hydroponic production are exempt from the 
handling requirements. The regulations define ``greenhouse tomatoes'' 
as tomatoes grown indoors. With more producers considering the use of 
protected culture production and other production technologies, there 
have been questions as to what meets the definition of greenhouse. 
Committee members agreed it was important to provide the industry with 
more clarity regarding this exemption, so producers are clear about 
which production types are exempt from the handling requirements.
    Protected culture tomato production can include rudimentary shade 
cloth and tunnel structures, to more sophisticated shade houses, to 
high-tech greenhouses and hothouses. Shade-house production often 
utilizes structures placed in the open field environment in order to 
protect the plants from adverse weather conditions, and the structures 
are often portable in nature. Greenhouse and hydroponic production 
usually mean permanent structures built of glass or similar materials 
that provide a controlled environment. The costs and the

[[Page 35224]]

environmental factors that affect production are also vastly different 
between a controlled environment verses a shade-house operation in the 
field.
    Greenhouse and hydroponic tomatoes have been exempted from the 
handling requirements given that their cost of production, growing 
conditions, and market segment were historically different compared to 
field-grown tomatoes. However, there are some products in the national 
market grown in covered production, particularly those grown in lower 
technology shade houses, which may compete directly with tomatoes 
Florida growers produce in the open field. As such, the Committee 
believes it is important to be more precise in what production 
practices warrant an exemption.
    With the increase in shade-house and other in- field technologies 
competing with field grown tomatoes for markets at similar price 
points, the Committee determined the exemption definition should be 
adjusted to better reflect the growing conditions that are 
significantly different than an open-field environment and production 
methods utilized in the production area. Committee members agreed that 
shade-house and similar production methods should not be granted an 
exemption since these methods of production do not significantly differ 
from that of open-field production. Further, these types of 
technologies are being used within the production area. Conversely, 
Committee staff has identified only one producer using permanent 
greenhouse structures in the production area.
    As such, the Committee recommended revising the exemption and 
definition paragraphs of the handling requirements pertaining to 
greenhouse and hydroponic tomatoes to better define what types of 
production methods are exempt. This action would eliminate the current 
exemptions for greenhouse and hydroponic production and would establish 
a new exemption and definition for controlled environment production.
    The new definition would define ``controlled environment'' to mean 
tomatoes grown in a soilless medium, in above ground containers, using 
hydroponic methods within a fully-enclosed permanent aluminum or fixed 
steel structure clad in glass, impermeable plastic, or polycarbonate, 
using automated irrigation and climate control, and with the surface 
dirt completely concealed under concrete or a synthetic lining (e.g. 
polypropylene ground cover). Tomatoes produced in a structure meeting 
the requirements of controlled environment would remain exempt from the 
handling requirements. The controlled environment definition was 
developed with input from the production area greenhouse and hydroponic 
producer. The Committee expects greenhouse and hydroponic operations in 
the production area currently exempt to meet the proposed definition of 
``controlled environment.'' The proposed definition would provide 
producers with better clarity on which production types would meet the 
exemption requirements.
    The Committee also recommended clarifying the exempt types of 
tomatoes under the handling requirements by adding tomatoes-on-the-vine 
or cluster type tomatoes (TOV), Campari (cocktail), and grape tomatoes. 
These varieties were not a large portion of the market when the 
handling requirements were last updated, but now are produced by 
growers in the production area. Like cherry tomatoes, which already 
have a specific exemption, these varieties are specialty varieties, and 
the Committee was not interested in regulating these varieties at this 
time. This change would clarify that these varieties are exempt from 
Order requirements, along with cherry tomatoes.
    The Committee also recommended modifying the exemption relating to 
net weight requirements to better reflect current industry practices. 
Specialty packed, yellow meated, and place packed tomatoes are 
currently exempt from the net weight and the weight marking 
requirements of the handling regulations. In its discussions, the 
Committee recognized there has been considerable innovation over the 
last 10 years in packaging for retail sales. While most retail 
packaging had been done by repackers, there has been an increase in 
such packaging by handlers. Several handlers now hand place tomatoes 
into single or two-layer containers known as place-packed. Some 
handlers also pack directly into sleeves, bags, and clamshells for 
retail-ready sales.
    With this type of packaging, it is very difficult to pack to any 
set weight requirement as they are normally packed to a count rather 
than based on weight. Consequently, the Committee recommended adding 
language that would also exempt retail-ready packaging from the net 
weight and marking requirements. The Committee also recommended 
defining ``retail-ready packaging'' as tomatoes packed by a first 
handler into consumer packs (sleeves, bags, clamshells) of two pounds 
or less. The Committee also recommended removing the definition for 
``specialty packed red ripe tomatoes'' as no one in the production area 
packs to meet that definition. The Committee believes these changes 
would make the regulations easier to understand and better reflect 
current market conditions.
    In another industry change, it has become more common for handlers 
to use Reusable Plastic Containers (RPCs) for packing tomatoes rather 
than corrugated cardboard containers. RPCs can be washed and sanitized 
for reuse and this makes them practical for packing at handling 
operations. Also, there are retailers that prefer to receive their 
tomatoes in RPCs. Additionally, the use of RPCs is more prevalent by 
those handlers packing Roma varieties that would also be required to 
meet container requirements under this action. However, RPCs and their 
use are not specifically included in the existing container 
requirements. As part of the recommended updates to the handling 
requirements, the Committee agreed that language regarding the use of 
RPCs should be added to the container requirements.
    Committee members voted to revise the container requirements to 
include the use of RPCs along with language to ensure containers used 
are clean and sanitized prior to reuse. The Committee also recommended 
modifying the current container language that states containers in 
which the tomatoes are packed ``must be clean and bright in appearance 
without marks, stains, or other evidence of previous use'' to 
specifically apply to corrugated cardboard containers, so use and 
guidance is provided for both RPCs and cardboard containers.
    Finally, this proposed rule would also make several other changes 
to the handling requirements to update language and to reflect current 
industry practices. Such changes include adding or revising paragraph 
headings to provide additional clarity, including Roma type tomatoes 
under the packout reporting requirements, and updating contact 
information.
    This action would revise the exemption, container, and definition 
sections in the handling requirements. Implementing the recommended 
changes would allow the Florida tomato industry to meet its domestic 
market needs for quality, stabilize returns to producers and make the 
requirements more reflective of current industry practices.
    Section 8e of the Act (7 U.S.C. 608e-1) provides that when certain 
domestically produced commodities, including tomatoes, are regulated 
under a Federal marketing order, imports of that commodity must meet 
the same or comparable grade, size, quality, and maturity requirements. 
Since this

[[Page 35225]]

change would adjust the exemption requirements to require previously 
exempt tomatoes to meet grade and/or size requirements, a corresponding 
change would need to be made to the import requirements for tomatoes. 
The corresponding changes to the import regulations are being addressed 
in a separate rulemaking.

Initial 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 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 approximately 50 producers of Florida tomatoes in the 
production area and 37 handlers subject to regulation by the Order. 
Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts less than 
$1,000,000 and small agricultural service firms are defined as those 
whose annual receipts are less than $30,000,000 (13 CFR 121.201).
    According to industry and Committee data, the average annual price 
for fresh Florida tomatoes during the 2018-19 season was approximately 
$12.56 per 25-pound container, and total fresh shipments were 25.9 
million containers. Using the average price and shipment information, 
the number of handlers, and assuming a normal distribution, most 
handlers have average annual receipts of less than $30,000,000, ($12.56 
times 25.9 million containers equals $325,304,000 divided by 37 
handlers equals $8,792,000 per handler).
    In addition, based on production data, an estimated producer price 
of $6.00 per 25-pound container, the number of Florida tomato 
producers, and assuming a normal distribution, the average annual 
producer revenue is above $1,000,000 ($6.00 times 25.9 million 
containers equals $155,400,000 divided by 50 producers equals 
$3,108,000 per producer). Thus, most handlers of Florida tomatoes may 
be classified as small agricultural service firms while the majority of 
producers may be classified as large entities under the SBA definition.
    This proposed rule invites comments on revising the exemption, 
container, and definition sections in the Order's handling 
requirements. Implementing the recommended changes to the handling 
requirements would allow the tomato industry to meet its domestic 
market needs for quality, stabilize returns to producers and would 
bring the handling requirements in line with current industry 
practices. The Committee unanimously approved this recommendation at 
its public meeting held on November 12, 2019. This rule would revise 
Sec.  966.323 as authorized by Sec. Sec.  966.5, 966.52, and 966.60 of 
the Order.
    These proposed changes could result in some additional costs for 
the industry. This action would eliminate the exemption for Roma 
varieties, which would require handlers to pay assessments and meet 
inspection requirements on fresh Roma tomatoes shipped outside the 
regulated area. Consequently, for those handlers shipping Roma type 
tomatoes, this action would increase the assessment obligation and 
would mean additional inspection fees. The cost of inspection is $0.029 
for each 25-pound container as set by the State of Florida, and the 
current assessment rate is $0.025 per 25-pound container. As both costs 
are based on the volume of containers shipped, it is anticipated this 
action would increase the cost burden on both large and small handlers 
of Roma tomatoes proportionally.
    According to USDA Market News data and Committee estimates, there 
are approximately 7.3 million 25-pound containers of fresh market Roma 
tomatoes handled each season in the production area. With the 
additional assessments from Roma tomatoes, the Committee would collect 
approximately $182,500 ($.025 x 7,300,000 25-pound containers) more in 
assessments annually. Collecting additional assessments on Roma 
tomatoes would represent an increase of 27 percent of last year's 
$647,500 collected from handlers.
    Additionally, handlers would be responsible for the cost of 
inspection on each 25-pound container of Roma type tomatoes. Using the 
Market News and Committee estimates above, handlers should expect to be 
responsible for an additional $0.029 per 25-pound container equivalent 
handled. The estimated additional inspection cost to the entire 
industry would total $211,700 (7,300,000 x $0.029) in inspection fees 
charged annually.
    Each handler who handles tomatoes grown in the production area must 
be certified as a registered handler by the Committee in order to ship 
tomatoes outside of the regulated area. Committee members and FSIS 
indicated that they were not aware of any handlers that only handled 
Roma varieties of tomatoes. When considering the approximate Roma 
volume of 7.3 million 25-pound containers, it is estimated that the 
handlers already registered with the Committee are handling 90 to 95 
percent of the Roma volume in the Order's production area. Therefore, 
most handlers that are shipping Roma tomatoes should already be 
registered with the Committee. These handlers are familiar with the 
inspection, assessment, and reporting requirements established in the 
Order. Thus, handlers should be well-positioned to accommodate this 
change.
    Aside from the exemption change for Roma type tomatoes, it is not 
anticipated that the other changes to the exemption, container, and 
definition paragraphs would result in any additional cost, as most of 
these changes were recommended to align the requirements with current 
industry practices. Regarding the change in the exemptions for 
greenhouse and hydroponic production, the Committee worked to ensure 
that production area producers that were utilizing these exemptions 
would meet the new exemption requirements for controlled environment, 
so this change would not represent any additional costs for producers 
in the production area.
    It is not anticipated that this action would impose an additional 
reporting burden on handlers. The FSIS reports the volume inspected to 
the Committee, and all Roma inspections and reporting criteria would be 
reported on existing forms. Handlers are familiar with the reporting 
requirements and would just be reporting additional volume on existing 
forms. Consequently, this should not result in more than minimal 
additional costs.
    In addition to the potential costs, this change would also provide 
benefits to the overall industry. Roma tomatoes can have difficulty 
with certain quality requirements, which can have a negative impact on 
grower returns. Given the increased importance of Roma type tomatoes in 
the marketplace, establishing grade and maturity requirements for Roma 
type tomatoes would have a stabilizing effect on the market for Roma 
tomatoes and help increase returns to handlers and producers. The 
additional revenue to the Committee should help with marketing, 
research, and education

[[Page 35226]]

efforts. Thus, the additional costs for inspection and assessment 
should be offset by the benefits of this action. The benefits of this 
action are expected to be equally available to tomato producers and 
handlers, regardless of their size.
    The Committee considered alternatives to these proposed changes. 
Prior to this recommendation, the Committee discussed not providing any 
exemptions for greenhouse or hydroponic production operations in the 
handling requirements. However, after determining there is limited 
greenhouse production in the production area, the Committee agreed 
providing an exemption for growers that meet the new definition for 
controlled environment would best serve the industry. The Committee 
also considered establishing grade and maturity requirements for grape 
tomatoes, but members determined they are not interested in regulating 
these tomatoes at this time. The Committee considered continuing the 
exemption for Roma tomatoes, but after considering the proportion of 
the market that Roma tomatoes now represents, the Committee decided 
that regulating Roma varieties would benefit the industry. The 
Committee also considered not adding an additional paragraph to address 
RPCs, but with the use of RPCs becoming more common, it was determined 
container language should be updated to better reflect current industry 
practices. Therefore, the alternatives were rejected.
    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 are necessary in those requirements as a 
result of this proposed action. 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule.
    The Committee's meetings were widely publicized throughout the 
Florida tomato industry, and all interested persons were invited to 
attend the meetings and participate in Committee deliberations on all 
issues. Like all Committee meetings, the August 21, October 2, and 
November 12, 2019, meetings were public meetings, and all entities, 
both large and small, were able to express their views on these issues. 
Interested persons are invited to submit comments on this proposed 
rule, including the regulatory and information collection impacts of 
this proposed action on small businesses.
    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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments timely received will be 
considered before a final determination is made on this matter.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.

    For the reasons set forth in the preamble, the Agriculture 
Marketing Services 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. Amend Sec.  966.323 by:
0
a. Revising the section heading;
0
b. Revising paragraph (a)(3)(iii);
0
c. Adding paragraph (a)(3)(iv);
0
d. Revising paragraphs (d), (e) and (g).
    The revisions and additions read as follows:


Sec.  966.323  Handling Requirements.

* * * * *
    (a) * * *
    (3) * * *
    (iii) The cardboard container in which the tomatoes are packed must 
be clean and bright in appearance without marks, stains, or other 
evidence of previous use.
    (iv) The Reusable Plastic Containers (RPCs) in which the tomatoes 
are packed must be cleaned and sanitized prior to use.
* * * * *
    (d) Exemptions
    (1) For types. The following types of tomatoes are exempt from 
these requirements:
    (i) Cherry tomatoes;
    (ii) Grape tomatoes;
    (iii) Cocktail-type tomatoes commonly referred to as Campari 
tomatoes;
    (iv) Tomatoes-on-the-vine, also known as Cluster tomatoes or TOVs.
    (2) For plum tomato types commonly referred to as Roma tomatoes. 
Roma tomatoes must meet the requirements of this section, except they 
are exempt from the size requirements specified in paragraph (a)(2) of 
this section.
    (3) For yellow meated tomatoes. Yellow meated tomatoes are exempt 
from the container net weight requirements specified in paragraph 
(a)(3)(i) of this section, and the requirement that each container or 
lid shall be marked to indicate the designated net weight as specified 
in paragraph (a)(3)(ii) of this section, but must meet the other 
requirements of this section.
    (4) For special packed tomatoes. Single layer and two layer place 
packed tomatoes, and tomatoes packed in retail-ready packaging, are 
exempt from the container net weight requirements specified in 
paragraph (a)(3)(i) of this section, and the requirement that each 
container or lid shall be marked to indicate the designated net weight 
as specified in paragraph (a)(3)(ii) of this section, but must meet the 
other requirements of this section.
    (5) For growing environment. Tomatoes grown in a controlled 
environment are exempt from the requirements in this section.
    (6) For field-packed tomatoes. Producer field-packed tomatoes must 
meet all of the requirements of this section except for the requirement 
that all containers must be packed at registered handler facilities as 
specified in paragraph (a)(3)(ii) of this section, and the requirement 
that such tomatoes designated as size 6 x 6 must meet the maximum 
diameter requirement specified in paragraph (a)(2)(i) of this section: 
Provided, That 6 x 6 and larger is used to indicate the listed size 
designation on containers.
    (7) For minimum quantity. Each person subject to the Order may 
handle up to but not to exceed 50 pounds of tomatoes per day without 
regard to the requirements of this section, but this exemption shall 
not apply to any shipment or any portion thereof of over 50 pounds of 
tomatoes.

[[Page 35227]]

    (8) For repacked tomatoes. Tomatoes that met the inspection 
requirements of paragraph (a)(4) of this section which are resorted, 
regraded, and repacked by a handler who has been designated as a 
``Certified Tomato Repacker'' by the committee are exempt from:
    (i) The tomato grade classifications of paragraph (a)(1) of this 
section;
    (ii) The size classifications of paragraph (a)(2) of this section, 
except that the tomatoes shall be at least 2\9/32\ inches in diameter; 
and
    (iii) The container weight requirements of paragraph (a)(3) of this 
section.
    (9) For adverse growing conditions. Upon recommendation of the 
committee, tomatoes that are elongated or otherwise misshapen due to 
adverse growing conditions may be exempted by the Secretary from the 
provisions of paragraph (a)(2) of this section.
    (10) For UglyRipeTM and Vintage RipesTM 
tomatoes. UglyRipeTM and Vintage RipesTM tomatoes 
must meet all the requirements of this section: Provided, That 
UglyRipeTM and Vintage RipesTM tomatoes shall be 
graded and at least meet the requirements specified for U.S. No. 2 
under the U.S. Standards for Grades of Fresh Tomatoes, except they are 
exempt from the requirements that they be reasonably well formed and 
not more than slightly rough, and Provided, Further that the 
UglyRipeTM and Vintage RipesTM tomatoes meet the 
requirements of the Identity Preservation program, Specialty Crops 
Inspection Division, Specialty Crops Program, AMS, USDA.
    (e) Report of packouts. Each registered handler shall, at the end 
of each day handling activities have been conducted, or the following 
morning as the committee may prescribe, provide to the committee or its 
designated agent a complete and accurate accounting of the number of 
containers of non-exempt tomatoes packed that day. The report shall 
include an accounting of the tomato type (e.g. Round, Roma), grade, 
size, maturity, and net weight of the containers packed in each 
category. The total packout report shall be provided to the committee 
or its authorized agent in a timely fashion that allows the committee 
to compile a daily, industry-wide packout report.
* * * * *
    (g) Definitions.
    Certified Tomato Repacker means a repacker of tomatoes in the 
regulated area that has the facilities for handling, regrading, 
resorting, and repacking tomatoes into consumer sized packages and has 
been certified as such by the committee.
    Controlled environment means tomatoes grown in a soilless medium, 
in above ground containers, using hydroponic methods within a fully-
enclosed permanent aluminum or fixed steel structure clad in glass, 
impermeable plastic, or polycarbonate, using automated irrigation and 
climate control, and with the surface dirt completely concealed under 
concrete or a synthetic lining (e.g., polypropylene ground cover).
    Pickling as used in Sec. Sec.  966.120 and 966.323 means to 
preserve tomatoes in a brine or vinegar solution.
    Processing as used in Sec. Sec.  966.120 and 966.323 means the 
manufacture of any tomato product that has been converted into juice, 
or preserved by any commercial process, including canning, dehydrating, 
drying, and the addition of chemical substances. Further, all 
processing procedures must result in a product that does not require 
refrigeration until opened.
    Producer field-packed tomatoes means tomatoes that at the time of 
inspection are #3 color or higher (according to color classification 
requirements in the U.S. tomato standards), that are picked and place-
packed in new containers in the field by a producer as defined in Sec.  
966.150 and transferred to a registered handler's facilities for final 
preparation for market.
    Retail-ready packaging means tomatoes packed by a first handler 
into consumer packs (e.g., sleeves, bags, clamshells) of two pounds or 
less.
    U.S. tomato standards means the revised United States Standards for 
Fresh Tomatoes (7 CFR 51.1855 through 51.1877) effective October 1, 
1991, as amended, or variations thereof specified in this section, 
provided that Sec.  51.1863 shall not apply to tomatoes covered by this 
part. Other terms in this section shall have the same meaning as when 
used in this part and the U.S. tomato standards.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-12183 Filed 6-8-20; 8:45 am]
 BILLING CODE P