Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules 53761

essential that fees be increased when

necessary to cover the cost of

maintaining a financially selfsupporting program. The last fee

increase under this program became

effective on January 5, 1997. On the

same effective date, Congress increased

the salaries of Federal employees by 3.0

percent which included locality pay.

Also, there have been normal increases

in other nonpay operating costs that

include utilities, office space, and

reimbursable travel. In addition, recent

congressional action will result in

additional salary increases of

appoximately 3.0 percent in 1998.

Although the program’s operating

reserves were adequate to cover the

January 5, 1997, salary increase, this

will not be the case for 1998 salary

increases, and a fee increase is needed.

The grading program fees need to be

increased to cover the costs associated

with maintaining adequate levels of

service during shifting production

patterns within the dairy industry. The

industry changes include plant

consolidations, geographical shifts of

dairy production areas, and changes in

the types of dairy products being

manufactured and offered for inspection

and grading services. To minimize the

necessary fee increase, the Department

has initiated cost-reduction efforts

which include the reduction of staff and

program overhead.

Proposed Changes

This rule proposes the following

changes in the regulations

implementing the dairy inspection and

grading program:

1. Increase the hourly fee for

nonresident services from $52.00 to

$56.00 for services performed between

6:00 a.m. and 6:00 p.m. The nonresident

hourly rate is charged to users who

request an inspector or grader for

particular dates and amounts of time to

perform specific grading and inspection

activities. These users of nonresident

services are charged for the amount of

time required to perform the task and

undertake related travel plus travel

costs.

2. Increase the hourly fee for

continuous resident services from

$47.00 to $51.00. The resident hourly

rate is charged to those who are using

grading and inspection services

performed by an inspector or grader

assigned to a plant on a continuous,

year-round resident basis.

Timing of Fee Increase

It is contemplated that the proposed

fee increases would be implemented on

an expedited basis in order to minimize

the period of revenue shortfall.

Accordingly, it is anticipated that the

fee increases, if adopted, would become

effective upon publication, or very soon

after publication, of the final rule in the

Federal Register. An approximate

effective date would be January 4, 1998.

Also, a thirty day comment period is

deemed appropriate in view of the need

to implement any fee increases as early

as possible in FY 1998.

All written submissions made

pursuant to this notice will be made

available for public inspection in the

Dairy Division during regular business

hours.

List of Subjects in 7 CFR Part 58

Dairy products, Food grades and

standards, Food labeling, Reporting and

recordkeeping requirements.

For the reasons set forth in the

preamble, it is proposed that 7 CFR Part

58 be amended as follows:

PART 58—GRADING AND

INSPECTION, GENERAL

SPECIFICATIONS FOR APPROVED

PLANTS AND STANDARDS FOR

GRADES OF DAIRY PRODUCTS

1. The authority citation for Part 58

continues to read as follows:

Authority: 7 U.S.C. 1621–1627.

Subpart A—[Amended]

2. In subpart A, § 58.43 is revised to

read as follows:

§ 58.43 Fees for inspection, grading, and

sampling.

Except as otherwise provided in

§§ 58.38 through 58.46, charges shall be

made for inspection, grading, and

sampling service at the hourly rate of

$56.00 for service performed 6 a.m., for

the time required to perform the service

calculated to the nearest 15-minute

period, including the time required for

preparation of certificates and reports

and the travel time of the inspector or

grader in connection with the

performance of the service. A minimum

charge of one-half hour shall be made

for service pursuant to each request or

certificate issued.

3. Section 58.45 is revised to read as

follows:

§ 58.45 Fees for continuous resident

services.

Irrespective of the fees and charges

provided in §§ 58.39 and 58.43, charges

for the inspector(s) and grader(s)

assigned to a continuous resident

program shall be made at the rate of

$51.00 per hour for services performed

during the assigned tour of duty.

Charges for service performed in excess

of the assigned tour of duty shall be

made at a rate of 11⁄2 times the rate

stated in this section.

Dated: October 8, 1997.

Lon Hatamiya,

Administrator, Agricultural Marketing

Service.

[FR Doc. 97–27324 Filed 10–15–97; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection

Service

7 CFR Parts 300 and 319

[Docket No. 97–016–1]

Importation of Tomatoes From France,

Morocco and Western Sahara, Chile,

and Spain

AGENCY: Animal and Plant Health

Inspection Service, USDA.

ACTION: Proposed rule.

SUMMARY: We are proposing to amend

the regulations governing fruits and

vegetables to allow tomatoes from

France, Morocco and Western Sahara,

and Chile to be imported into the

United States subject to certain

conditions. The proposed action would

provide importers and consumers in the

United States with additional sources of

tomatoes, while continuing to provide

protection against the introduction and

dissemination of injurious plant pests.

We are also proposing to amend the

regulations pertaining to importation of

tomatoes from Spain by requiring

containers of pink or red tomatoes to be

sealed before shipment if the containers

will transit any other fruit fly

supporting areas while en route to the

United States, and by requiring records

to be kept by Spain’s plant protection

service regarding trapping practices and

fruit fly captures. These actions appear

necessary to prevent the introduction of

exotic fruit flies into the United States.

DATES: Consideration will be given only

to comments received on or before

December 15, 1997.

ADDRESSES: Please send an original and

three copies of your comments to

Docket No. 97–016–1, Regulatory

Analysis and Development, PPD,

APHIS, suite 3C03, 4700 River Road

Unit 118, Riverdale, MD 20737–1238.

Please state that your comments refer to

Docket No. 97–016–1. Comments

received may be inspected at USDA,

room 1141, South Building, 14th Street

and Independence Avenue SW.,

Washington, DC, between 8 a.m. and

4:30 p.m., Monday through Friday,

except holidays. Persons wishing to
53762 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules

1 Information on these pest risk analyses and any

other pest risk analysis referred to in this document

may be obtained by writing to the person listed

under FOR FURTHER INFORMATION CONTACT or by

calling the Plant Protection and Quarantine (PPQ)

fax vault at 301–734–3560.

inspect comments are requested to call

ahead on (202) 690–2817 to facilitate

entry into the comment reading room.

FOR FURTHER INFORMATION CONTACT: Mr.

Ronald C. Campbell, Staff Officer,

Phytosanitary Issues Management Team,

PPQ, APHIS, 4700 River Road Unit 140,

Riverdale, MD 20737–1236, (301) 734–

6799; fax (301)734–5786; E-mail:

rcampbell@aphis.usda.gov.

SUPPLEMENTARY INFORMATION:

Background

The regulations in 7 CFR 319.56

through 319.56–8 (referred to below as

‘‘the regulations’’) prohibit or restrict

the importation of fruits and vegetables

into the United States from certain parts

of the world to prevent the introduction

and dissemination of plant pests,

including fruit flies, that are new to or

not widely distributed within the

United States.

Tomatoes from France, Morocco and

Western Sahara, and Chile

We are proposing to amend the

regulations to allow tomatoes

(Lycopersicon esculentum) from France,

Morocco and Western Sahara, and Chile

to be imported into the United States

under certain conditions, which are

discussed below. We are proposing to

allow these importations at the request

of various importers and foreign

ministries of agriculture, and after

conducting pest risk analyses 1 that

indicate the tomatoes can be imported

under the proposed conditions without

presenting any significant risk of

introducing fruit flies or other injurious

plant pests into the United States.

The imported tomatoes would be

subject to the requirements in § 319.56–

6 of the regulations. Section 319.56–6

provides, among other things, that all

imported fruits and vegetables, as a

condition of entry, shall be subject to

inspection, disinfection, or both, at the

port of first arrival, as may be required

by a United States Department of

Agriculture (USDA) inspector to detect

and eliminate plant pests. Section

319.56–6 also provides that any

shipment of fruits and vegetables may

be refused entry if the shipment is

infested with fruit flies or other

injurious plant pests and an inspector

determines that it cannot be cleaned by

disinfection or treatment.

In this proposed rule, as well as in the

current regulations for importing

tomatoes from Spain, contained in

§§ 319.56–2t and 319.56–2dd, we use

the terms ‘‘pink or red’’ and ‘‘green’’

tomatoes. Green tomatoes are unripened

tomatoes. Once tomatoes start to ripen,

they show more and more pink coloring,

which deepens to red as the tomatoes

ripen.

Tomatoes From France

We are proposing to allow tomatoes to

be imported from France under

conditions very similar to current

requirements for importing tomatoes

from Spain. Section 319.56–2t includes

green tomatoes from Spain in the list of

fruits and vegetables that may be

imported subject to inspection and

disinfection at the port of arrival, in

accordance with § 319.56–6 of the

regulations. Section 319.56–2t allows

green, or unripened, tomatoes to be

imported into the United States from

any area of Spain, including Almeria

Province. Because green tomatoes are

not a host to the Mediterranean fruit fly

(Medfly), which is known to occur in

Spain, or, in Spain, to any other pest of

concern to the United States, they are

not subject to the special conditions in

§ 319.56–2dd. Pink and red tomatoes

from Spain are hosts, albeit poor ones,

to the Medfly. Therefore, the regulations

at § 319.56–2dd currently allow the

importation of pink and red tomatoes

only from the Almeria Province and

only under certain conditions, which

protect the tomatoes from Medfly

infestation.

As in Spain, the pest of concern for

tomatoes in France is Medfly. We are

proposing to add green tomatoes from

France to the list of fruits and vegetables

in § 319.56–2t that may be imported into

the United States subject to inspection

and disinfection at the port of arrival in

accordance with § 319.56–6 of the

regulations. Green tomatoes are not a

host to Medfly, or, in France, to any

other pest of concern to the United

States. We would require that, to be

eligible for importation, the tomatoes

must still be green upon arrival in the

United States. This requirement would

ensure that the tomatoes at no time,

either in France or en route, become

suitable Medfly host material. (As

discussed later in this document, we are

also proposing to add this requirement

for the importation of green tomatoes

from Spain.) We are also proposing to

allow pink or red tomatoes to be

imported into the United States from

France if they are grown in the Region

of Brittany and meet certain conditions.

Although Medfly is not known to

exist in Brittany, incidental

introductions are possible. Therefore,

we propose to require that the tomatoes

be grown in Brittany in greenhouses

registered with, and inspected by, the

Service de la Protection Vegetaux

(SRPV). From June 1 through September

30, SRPV would be required to set and

maintain Medfly traps baited with

trimedlure at a rate of one inside and

one outside each greenhouse. All traps

would have to be checked every 7 days.

Brittany, in the northeast of France, has

a temperate climate. Temperatures from

October through May are too cold for

Medfly to survive. It is unlikely that

Medfly would become even temporarily

established in Brittany during the

months of June through September, but

trapping would help ensure detection of

Medfly should it be introduced. Capture

of a single Medfly inside or outside a

registered greenhouse would

immediately result in cancellation of

exports to the United States from that

greenhouse until the source of

infestation is determined, the Medfly

infestation is eradicated, and measures

have been taken to preclude any future

infestation. The Animal and Plant

Health Inspection Service (APHIS)

generally considers eradication to have

occurred when there is no evidence of

reproducing populations of Medfly (for

example, no finding of Medfly larvae,

mated females, or both male and female

flies) for two life cycles of the Medfly.

We propose to require SRPV to maintain

records of trap placement, checking of

traps, and any Medfly captures, and to

make the records available to APHIS

upon request.

Also from June 1 through September

30, we would require that the tomatoes

be packed within 24 hours of harvest,

safeguarded by fruit fly-proof mesh

screen or plastic tarpaulin while in

transit to the packing house and while

awaiting packing, and packed in fruit

fly-proof containers for transit to the

airport and subsequent shipping to the

United States. These requirements do

not appear to be necessary during other

times of the year when the climate

would not support fruit flies. At all

times of the year, however, we are

proposing to require the fruit fly-proof

containers of tomatoes to be sealed by

SRPV before shipment, and the seal

number recorded on a phytosanitary

certificate that must accompany the

tomatoes, if the containers will transit

any other fruit fly supporting areas

while en route to the United States. This

would ensure that the containers are not

opened and exposed to fruit flies, or

contaminated with fruit fly infested fruit

during shipment to the United States.

Flight over a fruit fly supporting area

without stopping does not constitute
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules 53763

‘‘transit’’ and thus does not trigger the

SRPV seal and records requirements.

SRPV would be responsible for export

certification inspection and issuance of

phytosanitary certificates. We propose

to require each shipment of pink or red

tomatoes to be accompanied by a

phytosanitary certificate issued by SRPV

and bearing the declaration, ‘‘These

tomatoes were grown in registered

greenhouses in the Brittany Region of

France.’’

The provisions for importing pink or

red tomatoes from France would be

added to § 319.56–2dd, and the heading

for that section, which now refers only

to pink or red tomatoes from Spain,

would be changed.

Tomatoes From Morocco and Western

Sahara

As in France and Spain, the pest of

concern for tomatoes in Morocco and

Western Sahara is Medfly. We are

proposing to add green tomatoes from

Morocco and Western Sahara to the list

of fruits and vegetables in § 319.56–2t

that may be imported, provided that the

tomatoes are still green upon arrival in

the United States, subject to inspection

and disinfection at the port of arrival in

accordance with § 319.56–6 of the

regulations. Green tomatoes are not a

host to Medfly, or, in Morocco and

Western Sahara, to any other pest of

concern to the United States.

We are also proposing to add

provisions to § 319.56–2dd to allow

pink tomatoes to be imported into the

United States from El Jadida and Safi

Provinces, Morocco, and from Dahkla

Province, Western Sahara, under

conditions similar to those discussed

above for tomatoes from France. We are

proposing to allow pink, but not fully

ripe, red tomatoes, as an additional

precaution because of the endemic

presence of Medflies and Medfly host

material in Morocco and Western

Sahara, and the free movement of

Medfly host materials throughout

Morocco and Western Sahara. The

surface area of a pink tomato is more

than 30 percent but not more than 60

percent pink and/or red. A red tomato

is more than 60 percent pink and/or red.

Tomatoes at any stage of ripeness are

poor hosts for Medfly, and pink

tomatoes are less suitable Medfly host

material than red tomatoes.

The tomatoes would have to be grown

in greenhouses registered with, and

inspected by, the Moroccan Ministry of

Agriculture, Division of Plant

Protection, Inspection, and Enforcement

(DPVCTRF). Because of the prevalence

of Medfly in Morocco and Western

Sahara, the greenhouses would have to

be insect-proof.

The tomatoes would only be allowed

to be shipped from Morocco and

Western Sahara between December 1

and April 30, inclusive. Although

Morocco and Western Sahara are

capable of supporting year-round

populations of Medfly, population

levels are lower during these months

than during late spring through early

autumn.

Commercial greenhouses in Morocco

and Western Sahara range in size from

less than 1 hectare to more than 14

hectares. Beginning 2 months prior to

the start of the shipping season and

continuing through the end of the

shipping season, DPVCTRF would be

required to set and maintain Medfly

traps baited with trimedlure inside the

registered greenhouses at a rate of four

traps per hectare. In Morocco traps

would also be required outside

registered greenhouses within a 2

kilometer radius at a rate of four traps

per square kilometer. In Western Sahara,

a single trap outside each registered

greenhouse would be required. Fewer

traps would be required in Western

Sahara because of the scarcity of

endemic Medfly host material and arid

conditions in the tomato production

areas. All traps in Morocco and Western

Sahara would have to be checked every

7 days. We propose to require DPVCTRF

to maintain records of trap placement,

checking of traps, and any Medfly

captures, and to make the records

available to APHIS upon request.

Capture of a single Medfly in a

registered greenhouse would

immediately result in cancellation of

exports to the United States from that

greenhouse until the source of the

infestation is determined, the Medfly

infestation has been eradicated, and

measures are taken to preclude any

future infestation. Capture of a single

Medfly within 200 meters of a registered

greenhouse would necessitate

increasing trap density in order to

determine whether there is a

reproducing population in the area. Six

additional traps would have to be

placed within a radius of 200 meters

surrounding the trap where the Medfly

was captured. Capture of two Medflies

within 200 meters of a registered

greenhouse and within a 1-month time

period would require Malathion bait

sprays within 200 meters of the trap or

traps where Medflies were caught every

7 to 10 days for 60 days to ensure

eradication.

As with pink and red tomatoes from

France and Spain, we propose to require

pink tomatoes from Morocco and

Western Sahara to be packed within 24

hours of harvest, safeguarded by fruit

fly-proof mesh screen or plastic

tarpaulin while in transit to the packing

house and while awaiting packing, and

packed in fruit fly-proof containers for

transit to the airport and subsequent

shipping to the United States. The

tomatoes must be pink at the time of

packing. In addition, we are proposing

to require that the fruit fly-proof

containers of tomatoes be sealed by the

Moroccan Ministry of Agriculture, Fresh

Product Export (EACCE), before

shipment, and the seal number recorded

on a phytosanitary certificate that must

accompany the tomatoes, if the

containers will transit any other fruit fly

supporting areas while en route to the

United States. This action appears

necessary to ensure that the containers

are not opened and exposed to fruit

flies, or contaminated with fruit fly

infested fruit during shipment to the

United States.

EACCE would be responsible for

export certification inspection and

issuance of phytosanitary certificates.

We propose to require each shipment of

pink tomatoes to be accompanied by a

phytosanitary certificate issued by

EACCE and bearing the declaration,

‘‘These tomatoes were grown in

registered greenhouses in El Jadida or

Safi Province, Morocco and were pink at

the time of packing’’ or ‘‘These tomatoes

were grown in registered greenhouses in

Dahkla Province, Western Sahara and

were pink at the time of packing.’’

The provisions for importing pink

tomatoes from Morocco and Western

Sahara would be added to § 319.56–2dd.

Tomatoes From Chile

In Chile the primary pests of concern

in tomatoes are the tomato fruit moth

(Scrobopalpula absoluta) and the

tomato fruit fly (Rhagoletis tomatis).

These are temperate pests that infest

tomatoes at all stages of ripeness,

including when they are green. USDA

has determined that a methyl bromide

treatment, developed in Chile, is an

effective treatment for these pests in

tomatoes. The treatment schedule is as

follows: Methyl bromide at the rate of

48 ounces per 1,000 cubic feet at 70 °F

for 2 hours. We are proposing to allow

tomatoes from Chile to be imported into

the United States if the tomatoes are

treated in Chile with methyl bromide as

described above. The treatment would

have to be conducted in facilities

registered with the Secretario de

Agricultura y Ganaderia (SAG) and with

APHIS personnel monitoring the

treatments. Requiring the treatment

under these conditions would ensure

that the treatments were effectively

administered.

In addition, we would require that the

tomatoes be treated and packed within
53764 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules

24 hours of harvest. They would have to

be safeguarded by a fruit fly-proof mesh

screen or plastic tarpaulin while in

transit to the packing house and while

awaiting packing, and be packed in fruit

fly-proof containers under APHIS

monitoring for transit to the airport and

subsequent shipping to the United

States. We believe these requirements

are necessary to protect the tomatoes

against reinfestation by the tomato fruit

moth and fruit flies between the time of

treatment and the arrival of the tomatoes

in the United States.

The proposed methyl bromide

treatment of tomatoes in Chile under

APHIS monitoring prior to export of the

tomatoes to the United States would be

required due to the nature of tomato

production in Chile. Tomatoes in Chile

would be produced in open fields under

normal cultural practices that do not

incorporate safeguards to mitigate the

risk of introducing tomato fruit fly and

tomato fruit moth into the United States.

Furthermore, the tomato fruit fly and

tomato fruit moth are temperate pests

that could potentially impact domestic

tomato production in the United States.

Post harvest methyl bromide treatment

in Chile would be the only mitigative

measure to ensure that tomato fruit flies

and tomato fruit moths are not

inadvertently shipped to the United

States. By contrast, tomatoes from

France, Morocco and Western Sahara,

and Spain would be produced in

greenhouses under a systems approach

that incorporates multiple safeguards

that mitigate the risk of introducing

Medflies into the United States.

We propose that SAG enter into a

trust fund agreement with APHIS before

tomatoes from Chile could be precleared

for import into the United States. A trust

fund agreement is required to recover

APHIS costs associated with monitoring

the preclearance program in Chile. The

trust fund agreement would require

SAG to pay in advance all estimated

costs to be incurred by APHIS in

providing preclearance services during a

shipping season. These costs would

include administrative expenses

incurred in conducting preclearance, as

well as all salaries (including overtime

and the Federal share of employee

benefits), travel expenses (including per

diem expenses), and other incidental

expenses incurred by the inspectors in

providing these services. SAG would be

required to deposit a certified or

cashier’s check with APHIS for the

amount of these costs for the entire

shipping season, as estimated by APHIS

based on projected shipment volumes

and cost figures from previous

inspections. The agreement would

further require that, if the deposit does

not meet the actual costs incurred by

APHIS, SAG would deposit with APHIS

a certified or cashier’s check for the

amount of the known remaining costs,

as determined by APHIS, before

completion of the inspections. The

agreement would also specify that

unanticipated end-of-season costs must

be paid upon demand, and that further

service will be withheld until payment

is made. If the amount SAG pays during

a shipping season exceeds the total costs

incurred by APHIS in providing

preclearance services, the difference

would be refunded to SAG by APHIS at

the end of the shipping season.

Requiring payment of costs in advance

is necessary to help defray the costs to

APHIS of providing inspection services

in Chile.

The provisions for importing tomatoes

from Chile would be added to § 319.56–

2dd. The treatment schedule for methyl

bromide would be added to the Plant

Protection and Quarantine Treatment

Manual (PPQ Treatment Manual), which

is incorporated into the regulations by

reference (see 7 CFR 300.1).

Tomatoes From Spain

The regulations at § 319.56–2dd for

importing pink or red tomatoes from

Almeria Province in Spain already

require, among other things, that the

greenhouse grown pink or red tomatoes

be packed within 24 hours of harvest, be

safeguarded by a fruit fly-proof mesh

screen or plastic tarpaulin while in

transit to the packing house and while

awaiting packing, and be packed in fruit

fly-proof containers for transit to the

airport and subsequent shipping to the

United States. We are proposing to

require the fruit fly-proof containers of

tomatoes to be sealed by the Spanish

Ministry of Agriculture, Fisheries, and

Food (MAFF) before shipment, and the

seal number recorded on the

phytosanitary certificate that must

accompany the tomatoes to the United

States, if the containers will transit any

other fruit fly supporting areas while en

route to the United States. We believe

the additional requirements for

containers that will transit fruit fly

supporting areas are necessary to ensure

that the shipments are not opened and

exposed to fruit flies or contaminated

with fruit-fly infested fruit during

shipment to the United States.

The regulations at § 319.56–2dd for

importing pink or red tomatoes from

Spain also require MAFF to maintain

Medfly traps inside and outside the

registered greenhouses, but do not

require MAFF to maintain records

regarding the trapping. We propose to

require MAFF to maintain records of

trap placement, checking of traps, and

any Medfly captures, and to make the

records available to APHIS upon

request. This would help ensure that

trapping is done properly and that

appropriate action is taken when fruit

flies are found.

As discussed previously in this

document, the regulations at § 319.56–2t

for importing green tomatoes from Spain

do not now require that the tomatoes

still be green upon arrival in the United

States. We propose to require that green

tomatoes from Spain still be green upon

arrival in the United States. This

requirement would ensure that the

tomatoes at no time, either in Spain or

en route, become suitable host material

for Medfly.

Executive Order 12866 and the

Regulatory Flexibility Act

This proposed rule has been reviewed

under Executive Order 12866. The rule

has been determined to be not

significant for the purposes of Executive

Order 12866 and, therefore, has not

been reviewed by the Office of

Management and Budget.

This proposed rule would allow

tomatoes from France, Morocco and

Western Sahara, and Chile to be

imported into the United States subject

to certain conditions. This proposed

action would provide importers and

consumers in the United States with

additional sources of tomatoes, while

continuing to provide protection against

the introduction and dissemination of

injurious plant pests. The proposal

would also make some minor changes to

the provisions for importing tomatoes

from Spain, but these changes are not

expected to have any effect on the

volume of tomatoes imported from

Spain, and, therefore, are not expected

to have any economic impact. Under the

Federal Plant Pest Act and the Plant

Quarantine Act (7 U.S.C. 150dd, 150ee,

150ff, 151–165, and 167), the Secretary

of Agriculture is authorized to regulate

the importation of fruits and vegetables

to prevent the introduction of injurious

plant pests.

During 1995 about 12.3 million metric

tons of tomatoes were supplied to the

United States market. Domestic

production accounted for about 95.4

percent of total supply. Imports from

Spain accounted for less than one-tenth

of one percent of total tomatoes

supplied to United States consumers

during 1995. Prices and sources of

tomatoes supplied to the United States

market are summarized in the following

table.
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules 53765

2The demand elasticity is obtained from J.E.

Epperson and L.F. Lei, ‘‘A Regional Analysis of

Vegetable Production with Changing Demand for

Row Crops Using quadratic Programming,’’

Southern Journal of Agricultural Economics,

Volume 21, Number 1, July 1989, pp. 87–96.

3Small Business Administration; Washington,

DC. SBA data was modified by tomato specific

information contained in the 1992 Census of

Agriculture.

Source of U.S. tomato supply Quantity

(metric tons)

Total value

($1,000,000)

Average value per

metric ton

Percentage (% of

total supply) 2

Domestic Production .............................................................. 11,719,214 $1,576.01 $134.48 95.44

Imported Tomatoes 1 .............................................................. 559,117 404.95 724.27 4.45

Spanish Imports ...................................................................... 657 1.11 1,695.58 0.0001

Total Supply ................................................................. 12,278,988 1,982.07 161.42 100.0

1From countries other than Spain.

2Percentage column may not sum due to rounding.

Sources: Agricultural Statistics 1995–96; Table 233 (figures converted to metric tons); USDA-NASS; Washington, DC.

Foreign Agriculture Trade of the United States—FY 1995 Supplement; Table 25; USDA-ERS; Washington, DC.

It is estimated that annual tomato

imports will increase by about 13,700

metric tons under this proposed rule.

About 6,000 metric tons are expected

from Chile; the remaining 7,700 metric

tons would arrive from France and

Morocco and Western Sahara. Currently,

Spanish imports arrive during the offseason for tomato production in the

United States (December 1 through

April 30) and, therefore, do not directly

compete with United States tomatoes

produced during the spring and summer

months. Proposed tomato imports from

Morocco and Western Sahara will also

be restricted to arrival during the offseason. Imports from Chile and France

will be allowed entry throughout the

year. However, Chilean tomatoes are

expected to be primarily imported

during the off-season due to seasonal

growing differences between the

northern and southern hemispheres,

and shipments from France are likely to

fill a special market niche (for higher

quality fresh tomatoes).

Therefore, proposed imports would

largely compete with existing imports

rather than with domestic production.

This is further supported by the price

per ton that imports currently command

in the United States market. The value

of imported tomatoes (from countries

other than Spain) averaged $724 per

metric ton during 1995. Spanish imports

averaged $1,695 per metric ton during

the same year. This price discrepancy is

likely due to the relatively high quality

of off-season tomato imports from

Spain. In contrast to imports, prices for

U.S. produced tomatoes averaged about

$161 per metric ton. Price discrepancies

between the import and domestic

markets indicate that imports cannot

compete with domestic supplies unless

they arrive during the off-season or for

specialty markets. During the off-season

there may be some U.S. producers who

grow greenhouse tomatoes at higher

than average prices. However, this price

differential is not reflected in the data.

Even if all the proposed imports were

directly substitutable for domestic

supplies, the net impact on United

States society is anticipated to be

positive. Assuming a perfectly inelastic

supply, a demand elasticity of ¥0.5584,

an initial quantity supplied of 12.3

million metric tons, and an increase in

imports of 13,700 metric tons, it is

estimated that average U.S. tomato

prices will decline from $161.42 to

$161.10 per metric ton.2 This represents

a price decrease of $0.32 per metric ton.

Consumer welfare would increase by

$3,935,852. United States producers,

however, would experience a revenue

decrease of $3,933,660, or about 0.2

percent of the total value of domestic

tomato supplies. This would result in a

positive, albeit small, net impact to

United States society totaling about

$2,192. Foreign producers realize a gain

of about $2,207,070. These results are

summarized in the following table.

U.S. consumer gain U.S. producer revenue loss Net gain to U.S. society Foreign producer gain

$3,935,852 $3,933,660 $2,192 $2,207,070

This proposed rule would provide

U.S. consumers with additional sources

of tomatoes during winter months and

for specialty markets. Domestic

producers who propagate greenhouse

tomatoes during the off-season may be

slightly impacted. However, it is

estimated that this proposed rule will

have a negligible economic impact on

domestic tomato producers. Most

imports from Chile and Morocco and

Western Sahara will arrive during the

off-season and not directly compete

with U.S. produced tomatoes. Even if

imports could be readily substituted for

domestic production, U.S. producers

would only be marginally impacted due

to the low volume of expected imports.

A relatively small annual quantity

increase (13,700 metric tons valued at

$2.2 million) of imported tomatoes

would not likely erode the market share

of domestic producers.

The Regulatory Flexibility Act

requires that APHIS specifically

consider the economic impact of this

proposed rule on ‘‘small’’ entities. The

SBA has set forth size criteria by

Standard Industrial Classification (SIC)

which was used as a guide in

determining which economic entities

meet the definition of a ‘‘small’’

business.

The SBA does not maintain specific

size standards for domestic entities that

either import or produce tomatoes.

Therefore, this analysis uses the size

standards established for Vegetable and

Melon Producers (SIC code 0161) and

Wholesale Traders of Fresh Fruits and

Vegetables (SIC code 5148). The SBA’s

definition of a ‘‘small’’ entity included

in the vegetable and melon producer

classification is one that generates less

than $500,000 in annual receipts.3

Wholesale traders of fresh fruits and

vegetables are classified as ‘‘small’’ if

they employ fewer than 100 people.

Currently there are about 15,438

‘‘small’’ tomato producers and 5,122

‘‘small’’ wholesale traders of fresh fruits

and vegetables according to the SBA

criteria. The proposed rule change could

negligibly impact some ‘‘small’’

domestic entities. However, because the

supply of tomatoes in the United States

market would only increase by about
53766 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules

13,700 metric tons (less than one-tenth

of one percent of total domestic supply)

and domestic producers would continue

to supply more than 95 percent of the

tomatoes consumed in the United States

each year, it does not appear that this

proposed rule would have a significant

economic impact on ‘‘small’’ entities.

However, APHIS invites public

comments concerning the potential

economic effects of this proposed rule

change on ‘‘small’’ United States

entities. The Agency is particularly

interested in identifying potential

economic impacts on United States

entities that produce tomatoes during

the winter months. All comments will

be considered prior to finalization of

this Regulatory Flexibility Analysis.

Reporting and recordkeeping

requirements of the proposed rule are

described below under ‘‘The Paperwork

Reduction Act’’ section of this

document.

Executive Order 12778

This proposed rule would allow the

importation of tomatoes from France,

Morocco and Western Sahara, and Chile

under certain conditions. If this

proposed rule is adopted, State and

local laws and regulations regarding

tomatoes imported under this rule

would be preempted while the fruit is

in foreign commerce. Tomatoes are

generally imported for immediate

distribution and sale to the consuming

public, and would remain in foreign

commerce until sold to the ultimate

consumer. The question of when foreign

commerce ceases in other cases must be

addressed on a case-by-case basis. If this

proposed rule is adopted, no retroactive

effect would be given to this rule, and

this rule would not require

administrative proceedings before

parties may file suit in court challenging

this rule.

Paperwork Reduction Act

In accordance with section 3507(d) of

the Paperwork Reduction Act of 1995

(44 U.S.C. 3501 et seq.), the information

collection or recordkeeping

requirements included in this proposed

rule have been submitted for approval to

the Office of Management and Budget

(OMB). Please send written comments

to the Office of Information and

Regulatory Affairs, OMB, Attention:

Desk Officer for APHIS, Washington, DC

20503. Please state that your comments

refer to Docket No. 97–016–1. Please

send a copy of your comments to: (1)

Docket No. 97–016–1, Regulatory

Analysis and Development, PPD,

APHIS, suite 3C03, 4700 River Road

Unit 118, Riverdale, MD 20737–1238,

and (2) Clearance Officer, OIRM, USDA,

room 404–W, 14th Street and

Independence Avenue SW.,

Washington, DC 20250. A comment to

OMB is best assured of having its full

effect if OMB receives it within 30 days

of publication of this proposed rule.

We are proposing to allow tomatoes

from France, Morocco and Western

Sahara, and Chile to be imported into

the United States subject to certain

conditions. We are also proposing to

amend the regulations pertaining to

importation of tomatoes from Spain by

requiring containers of pink or red

tomatoes to be sealed before shipment if

the containers will transit any other

fruit fly supporting areas while en route

to the United States, and by requiring

records to be kept by Spain’s plant

protection service regarding trapping

practices and fruit fly captures. These

proposed regulatory revisions would

facilitate the importation of tomatoes

from France, Morocco and Western

Sahara, Chile and Spain while ensuring

that tomatoes imported into the United

States do not harbor insect pests such as

the Mediterranean fruit fly, tomato fruit

moth, and tomato fruit fly.

The implementation of these

proposed regulatory actions would

require us to engage in certain

information collection activities. We are

seeking approval from the Office of

Management and Budget (OMB) to

engage in these information collection

activities, which are described below.

Phytosanitary certificate: The

proposed rule would require that pink

or red tomatoes imported into the

United States from registered

greenhouses in the Brittany Region of

France and pink tomatoes imported into

the United States from registered

greenhouses in El Jadida and Safi

Provinces, Morocco, and Dahkla

Province, Western Sahara, be

accompanied by a phytosanitary

certificate. The certificate would be

issued by a representative of the plant

protection agency in the respective

country of origin after the representative

examines the shipment and ensures that

it has been prepared in compliance with

our regulations.

Records of Medfly trap placement and

Medfly captures: The proposed rule

would require that Medfly traps be

placed in and/or around registered

greenhouses in Almeria Province,

Spain; El Jadida and Safi Provinces,

Morocco; Dahkla Province, Western

Sahara; and the Brittany Region of

France. Representatives from the

respective national plant protection

agencies would be responsible for

recording trap placement, checking of

traps, and Medfly captures. This

information would be made available to

APHIS upon request.

We are soliciting comments from the

public (as well as affected agencies)

concerning our proposed information

collection requirements. We need this

outside input to help us:

(1) Evaluate whether the information

collection is necessary for the proper

performance of our agency’s functions,

including whether the information will

have practical utility;

(2) Evaluate the accuracy of our

estimate of the burden of the

information collection, including the

validity of the methodology and

assumptions used;

(3) Enhance the quality, utility, and

clarity of the information to be

collected; and

(4) Minimize the burden of the

information collection on those who are

to respond such as through the use of

appropriate automated, electronic,

mechanical, or other technological

collection techniques or other forms of

information technology, e.g., permitting

electronic submission of responses.

Estimate of burden: Public reporting

burden for this collection of information

is estimated to average 0.670 hours per

response.

Respondents: Foreign plant health

protection authorities.

Estimated number of respondents: 6.

Estimated annual number of

responses: 328.

Estimated average number of

responses per respondent: 54.66.

Estimated total annual burden on

respondents: 220 hours.

Copies of this information collection

can be obtained from: Clearance Officer,

OIRM, USDA, Room 404–W, 14th Street

and Independence Ave., SW.,

Washington, DC 20250.

List of Subjects

7 CFR Part 300

Incorporation by reference, Plant

diseases and pests, Quarantine.

7 CFR Part 319

Bees, Coffee, Cotton, Fruits, Honey,

Imports, Incorporation by reference,

Nursery Stock, Plant diseases and pests,

Quarantine, Reporting and

recordkeeping requirements, Rice, and

Vegetables.

Accordingly, title 7, chapter III, of the

Code of Federal Regulations would be

amended as follows:

PART 300—INCORPORATION BY

REFERENCE

1. The authority citation for part 300

would continue to read as follows:
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules 53767

1The surface area of a pink tomato is more than

30 percent but not more than 60 percent pink and/

or red. The surface area of a red tomato is more than

60 percent pink and/or red. Green tomatoes may be

imported in accordance with § 319.56–2t of this

subpart.

Authority: 7 U.S.C. 150ee, 154, 161, 162

and 167; 7 CFR 2.22, 2.80, and 371.2(c).

2. In § 300.1, paragraph (a),

introductory text, would be revised to

read as follows:

§ 300.1 Materials incorporated by

reference.

(a) Plant Protection and Quarantine

Treatment Manual. The Plant Protection

and Quarantine Treatment Manual,

which was reprinted November 30,

1992, and includes all revisions through

[insert date], has been approved for

incorporation by reference in 7 CFR

chapter III by the Director of the Office

of the Federal Register in accordance

with 5 U.S.C. 552(a) and 1 CFR part 51.

* * * * *

PART 319—FOREIGN QUARANTINE

NOTICES

3. The authority citation for part 319

would continue to read as follows:

Authority: 7 U.S.C. 150dd, 150ee, 150ff,

151–167, 450, 2803, and 2809; 21 U.S.C. 136

and 136a; 7 CFR 2.22, 2.80, and 371.2(c).

4. In § 319.56–2t, the table would be

amended by revising the entry for

tomato from Spain and by adding new

entries for tomato from France and

Morocco and Western Sahara, in

alphabetical order, to read as follows:

§ 319.56–2t Administrative instructions:

conditions governing the entry of certain

fruits and vegetables.

* * * * *

Country/locality Common

name Botanical name Plant part(s)

* * * * * * *

France ......................................... Tomato .... (Lycopersicon esculentum) ....... Fruit, only if it is green upon arrival in the United States (pink

or red fruit may only be imported from the Region of Brittany and only in accordance with § 319.56–2dd of this subpart).

* * * * * * *

Morocco and Western Sahara .... Tomato .... (Lycopersicon esculentum) ....... Fruit, only if it is green upon arrival in the United States (pink

fruit may only be imported from El Jadida or Safi Province,

Morocco, or Dahkla Province, Western Sahara, and only in

accordance with § 319.56–2dd of this subpart).

* * * * * * *

Spain ........................................... Tomato .... (Lycopersicon esculentum) ....... Fruit, only if it is green upon arrival in the United States (pink

or red fruit may only be imported from Almeria Province

and only in accordance with § 319.56–2dd of this subpart).

* * * * * * *

* * * * *

5. Section 319.56–2dd would be

revised to read as follows:

§ 319.56–2dd Administrative instructions:

conditions governing the entry of tomatoes.

(a) Tomatoes (fruit) (Lycopersicon

esculentum) from Spain. Pink or red

tomatoes may be imported into the

United States from Spain only under the

following conditions: 1

(1) The tomatoes must be grown in the

Almeria Province of Spain in

greenhouses registered with, and

inspected by, the Spanish Ministry of

Agriculture, Fisheries, and Food

(MAFF);

(2) The tomatoes may be shipped only

from December 1 through April 30,

inclusive;

(3) Two months prior to shipping, and

continuing through April 30, MAFF

must set and maintain Mediterranean

fruit fly (Medfly) traps baited with

trimedlure inside the greenhouses at a

rate of four traps per hectare. In all areas

outside the greenhouses and within 8

kilometers, including urban and

residential areas, MAFF must place

Medfly traps at a rate of four traps per

square kilometer. All traps must be

checked every 7 days;

(4) Capture of a single Medfly in a

registered greenhouse will immediately

result in cancellation of exports from

that greenhouse until the source of

infestation is determined, the Medfly

infestation is eradicated, and measures

are taken to preclude any future

infestation. Capture of a single Medfly

within 2 kilometers of a registered

greenhouse will necessitate increasing

trap density in order to determine

whether there is a reproducing

population in the area. Capture of two

Medflies within 2 kilometers of a

registered greenhouse and within a 1-

month time period will result in

cancellation of exports from all

registered greenhouses within 2

kilometers of any of the finds until the

source of infestation is determined and

the Medfly infestation is eradicated;

(5) MAFF must maintain records of

trap placement, checking of traps, and

any Medfly captures, and must make the

records available to APHIS upon

request;

(6) The tomatoes must be packed

within 24 hours of harvest. They must

be safeguarded by a fruit fly-proof mesh

screen or plastic tarpaulin while in

transit to the packing house and while

awaiting packing, and packed in fruit

fly-proof containers for transit to the

airport and subsequent shipping to the

United States. Transit through other

fruit fly supporting areas is prohibited

unless the fruit fly-proof containers are

sealed by MAFF before shipment and

the official seal number is recorded on

the phytosanitary certificate; and

(7) MAFF is responsible for export

certification inspection and issuance of

phytosanitary certificates. Each

shipment of tomatoes must be

accompanied by a phytosanitary

certificate issued by MAFF and bearing

the declaration, ‘‘These tomatoes were

grown in registered greenhouses in

Almeria Province in Spain.’’

(b) Tomatoes (fruit) (Lycopersicon

esculentum) from France. Pink or red

tomatoes may be imported into the

United States from France only under

the following conditions: 1

(1) The tomatoes must be grown in the

Brittany Region of France in

greenhouses registered with, and
53768 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules

inspected by, the Service de la

Protection Vegetaux (SRPV);

(2) From June 1 through September

30, SRPV must set and maintain one

Medfly trap baited with trimedlure

inside and one outside the greenhouse

and must check the traps every 7 days;

(3) Capture of a single Medfly inside

or outside a registered greenhouse will

immediately result in cancellation of

exports from that greenhouse until the

source of the infestation is determined,

the Medfly infestation is eradicated, and

measures are taken to preclude any

future infestation;

(4) SRPV must maintain records of

trap placement, checking of traps, and

any Medfly captures, and must make

them available to APHIS upon request;

(5) From June 1 through September

30, the tomatoes must be packed within

24 hours of harvest. They must be

safeguarded by fruit fly-proof mesh

screen or plastic tarpaulin while in

transit to the packing house and while

awaiting packing, and be packed in fruit

fly-proof containers for transit to the

airport and subsequent shipping to the

United States. At all times of the year,

transit through other fruit fly supporting

areas is prohibited unless the fruit flyproof containers are sealed by SRPV

before shipment and the official seal

number is recorded on the

phytosanitary certificate; and

(6) SRPV is responsible for export

certification inspection and issuance of

phytosanitary certificates. Each

shipment of tomatoes must be

accompanied by a phytosanitary

certificate issued by SRPV and bearing

the declaration, ‘‘These tomatoes were

grown in registered greenhouses in the

Brittany Region of France.’’

(c) Tomatoes (fruit) (Lycopersicon

esculentum) from Morocco and Western

Sahara. Pink tomatoes may be imported

into the United States from Morocco

and Western Sahara only under the

following conditions: 1

(1) The tomatoes must be grown in the

provinces of El Jadida or Safi in

Morocco or in the province of Dahkla in

Western Sahara in insect-proof

greenhouses registered with, and

inspected by, the Moroccan Ministry of

Agriculture, Division of Plant

Protection, Inspection, and Enforcement

(DPVCTRF);

(2) The tomatoes may be shipped from

Morocco and Western Sahara only

between December 1 and April 30,

inclusive;

(3) Beginning 2 months prior to the

start of the shipping season and

continuing through the end of the

shipping season, DPVCTRF must set

and maintain Mediterranean fruit fly

(Medfly) traps baited with trimedlure

inside the greenhouses at a rate of four

traps per hectare. In Morocco, traps

must also be placed outside registered

greenhouses within a 2 kilometer radius

at a rate of four traps per square

kilometer. In Western Sahara, a single

trap must be placed outside each

registered greenhouse. All traps in

Morocco and Western Sahara must be

checked every 7 days;

(4) DPVCTRF must maintain records

of trap placement, checking of traps,

and any Medfly captures, and make the

records available to APHIS upon

request;

(5) Capture of a single Medfly in a

registered greenhouse will immediately

result in cancellation of exports from

that greenhouse until the source of the

infestation is determined, the Medfly

infestation has been eradicated, and

measures are taken to preclude any

future infestation. Capture of a single

Medfly within 200 meters of a registered

greenhouse will necessitate increasing

trap density in order to determine

whether there is a reproducing

population in the area. Six additional

traps must be placed within a radius of

200 meters surrounding the trap where

the Medfly was captured. Capture of

two Medflies within 200 meters of a

registered greenhouse and within a 1

month time period will necessitate

Malathion bait sprays in the area every

7 to 10 days for 60 days to ensure

eradication;

(6) The tomatoes must be packed

within 24 hours of harvest. They must

be safeguarded by a fruit fly-proof mesh

screen or plastic tarpaulin while in

transit to the packing house and while

awaiting packing, and packed in fruit

fly-proof containers for transit to the

airport and subsequent shipping to the

United States. The tomatoes must be

pink at the time of packing. Transit

through other fruit fly supporting areas

is prohibited unless the fruit fly-proof

containers are sealed by the Moroccan

Ministry of Agriculture, Fresh Product

Export (EACCE), before shipment and

the official seal number is recorded on

the phytosanitary certificate; and

(7) EACCE is responsible for export

certification inspection and issuance of

phytosanitary certificates. Each

shipment of tomatoes must be

accompanied by a phytosanitary

certificate issued by EACCE and bearing

the declaration, ‘‘These tomatoes were

grown in registered greenhouses in El

Jadida or Safi Province, Morocco, and

were pink at the time of packing’’ or

‘‘These tomatoes were grown in

registered greenhouses in Dahkla

Province, Western Sahara and were pink

at the time of packing.’’

(d) Tomatoes from Chile. Tomatoes

(fruit) (Lycopersicon esculentum) from

Chile, whether green or at any stage of

ripeness, may be imported into the

United States only under the following

conditions:

(1) The tomatoes must be treated in

Chile with methyl bromide in

accordance with the PPQ Treatment

Manual. The treatment must be

conducted in facilities registered with

the Secretario de Agricultura y

Ganaderia (SAG) and with APHIS

personnel monitoring the treatments;

(2) The tomatoes must be treated and

packed within 24 hours of harvest. Once

treated, the tomatoes must be

safeguarded by a fruit fly-proof mesh

screen or plastic tarpaulin while in

transit to the packing house and while

awaiting packing, and be packed in fruit

fly-proof containers under APHIS

monitoring for transit to the airport and

subsequent shipping to the United

States; and

(3) Tomatoes may be imported into

the United States from Chile only if

SAG has entered into a trust fund

agreement with APHIS for that shipping

season. This agreement requires SAG to

pay in advance all costs that APHIS

estimates it will incur in providing the

preclearance services prescribed in this

section for that shipping season. These

costs will include administrative

expenses incurred in conducting the

preclearance services; and all salaries

(including overtime and the Federal

share of employee benefits), travel

expenses (including per diem expenses),

and other incidental expenses incurred

by the inspectors in providing these

services. The agreement requires SAG to

deposit a certified or cashier’s check

with APHIS for the amount of these

costs for the entire shipping season, as

estimated by APHIS based on projected

shipment volumes and cost figures from

previous inspections. The agreement

further requires that, if the initial

deposit is not sufficient to meet all costs

incurred by APHIS, SAG must deposit

with APHIS another certified or

cashier’s check for the amount of the

remaining costs, as determined by

APHIS, before the inspections will be

completed. The agreement also requires

that, in the event of unexpected end-ofseason costs, SAG must deposit with

APHIS a certified cashier’s check

sufficient to meet such costs as

estimated by APHIS, before any further

preclearance services will be provided.

If the amount SAG deposits during a

shipping season exceeds the total cost

incurred by APHIS in providing

preclearance services, the difference

will be returned to SAG by APHIS at the

end of the shipping season.
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Proposed Rules 53769

Done in Washington, DC, this 9th day of

October 1997.

Terry L. Medley,

Administrator, Animal and Plant Health

Inspection Service.

[FR Doc. 97–27427 Filed 10–15–97; 8:45 am]

BILLING CODE 3410–34–P

NORTHEAST DAIRY COMPACT

COMMISSION

7 CFR Chapter XIII

Compact Over-Order Price Regulation

AGENCY: Northeast Dairy Compact

Commission.

ACTION: Notice of Meeting.

SUMMARY: The Compact Commission

will hold its monthly meeting to

consider whether to adopt a Final Rule

extending the current over-order price

regulation beyond its present December

31, 1997 deadline, and whether to

amend the regulation, generally. The

Commission will also review

procedures relating to ongoing studies

and consider matters of administration.

DATES: The meeting is scheduled for

October 23, 1997, 9:00 a.m. to 4:00 p.m.

ADDRESS: The meeting will be held at

the Grist Mill Restaurant, 520 South

Street in Bow, NH.

FOR FUTHER INFORMATION CONTACT:

Daniel Smith, Executive Director,

Northeast Dairy Compact Commission,

43 State Street, PO Box 1058,

Montpelier, VT 05601. Telephone (802)

229–1941.

SUPPLEMENTARY INFORMATION: Notice is

hereby given that the Compact

Commission will hold its regular

monthly meeting. The Commission will

consider whether to adopt a Final Rule

extending the current over-order price

regulation beyond its present December

31, 1997 deadline, and whether to

amend the regulation, generally. See

Proposed Rule, 62 FR 47156 (September

8, 1997). The Commission will also

review procedures for conducting a

study of regional dairy farm cost of

production and a study for assessing the

regional impact of over-order price

regulation. The Commission will also

consider certain matters relating to

administration.

Daniel Smith,

Executive Director.

(Authority: (a) Article V, Section 11 of the

Northeast Interstate Dairy Compact, and all

other applicable Articles and Sections, as

approved by Section 147, of the Federal

Agriculture Improvement and Reform Act

(FAIR ACT), Pub. L. 104–127, and as thereby

set forth in S.J. Res. 28(1)(b) of the 104th

Congress (codified at 7 U.S.C. 7256); Finding

of Compelling Public Interest by United

States Department of Agriculture Secretary

Dan Glickman, August 8, 1996 and March 20,

1997. (b) Bylaws of the Northeast Dairy

Compact Commission, adopted November 21,

1996.)

[FR Doc. 97–27572 Filed 10–15–97; 8:45 am]

BILLING CODE 1650–01–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 329

RIN 3064–AC13

Interest on Deposits

AGENCY: Federal Deposit Insurance

Corporation.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Deposit

Insurance Corporation (FDIC) is

proposing to amend its regulation

entitled ‘‘Interest on Deposits.’’ Section

18(g) of the Federal Deposit Insurance

Act (FDI Act) requires that the FDIC by

regulation prohibit the payment of

interest or dividends on demand

deposits in insured nonmember banks

and in insured branches of foreign

banks. This regulation implements this

prohibition. The proposed rule provides

as an exception to the prohibition, the

payment of interest or other

remuneration on any deposit which, if

held by a member bank, would be

allowable under 12 U.S.C. 371a and 461,

or by regulation of the Board of

Governors of the Federal Reserve

System (FRB). This proposal is in

accordance with the FDIC’s review of its

regulations under section 303 of the

Riegle Community Development and

Regulatory Improvement Act of 1994.

DATES: Written comments must be

received by the FDIC on or before

December 15, 1997.

ADDRESSES: Send written comments to

Robert E. Feldman, Executive Secretary,

Attention: Comments/OES, Federal

Deposit Insurance Corporation, 550 17th

Street, NW., Washington, DC 20429.

Comments may be hand delivered to the

guard station at the rear of the 17th

Street Building (located on F Street), on

business days between 7:00 a.m. and

5:00 p.m. [Fax number: (202) 898–3838;

Internet address: comments@fdic.gov].

Comments may be inspected and

photocopied in the FDIC Public

Information Center, Room 100, 801 17th

Street, NW., Washington, DC 20429,

between 9:00 a.m. and 4:30 p.m. on

business days.

FOR FURTHER INFORMATION CONTACT:

Marc Goldstrom, Counsel, Regulation

and Legislation Section, Legal Division,

(202–898–8807); Louise Kotoshirodo,

Review Examiner, Division of

Compliance and Consumer Affairs,

(202–942–3599).

SUPPLEMENTARY INFORMATION:

Background

Section 18(g) of the FDI Act provides

that the Board of Directors of the FDIC

shall by regulation prohibit the payment

of interest or dividends on demand

deposits in insured nonmember banks

and in insured branches of foreign

banks. (12 U.S.C. 1828(g)). Accordingly,

the FDIC promulgated regulations

prohibiting the payment of interest or

dividends on demand deposits at 12

CFR part 329. Section 11 of the Banking

Act of 1933 (12 U.S.C. 371a) prohibits

member banks from paying interest on

demand deposits and is implemented by

Regulation Q, (12 CFR part 217) of the

FRB.

Section 18(g) of the FDI Act also

provides that the FDIC shall make such

exceptions to this prohibition as are

prescribed with respect to demand

deposits in member banks by section 19

of the Federal Reserve Act, as amended,

or by regulation of the FRB (12 U.S.C.

1828(g)). Generally, member banks, state

nonmember banks and insured branches

of foreign banks are subject to the same

prohibition and exceptions to such

prohibition, albeit under different

statutes and regulations.

From time to time the FRB issues or

authorizes a new exception to the

prohibition applicable to member banks,

and the FDIC later issues or authorizes

a similar exception affecting state

nonmember banks and insured branches

of foreign banks. For example, the FRB

recently amended its interpretation with

respect to limitations on premiums

given on demand deposits (62 FR 26736

(May 15, 1997)) and the FDIC later

issued a similar interpretive rule

affecting state nonmember banks and

insured branches of foreign banks (62

FR 40731 (July 30, 1997)).

In the periods of time in which the

FRB has issued or authorized an

exception to the prohibition, but the

FDIC has yet to act, state nonmember

banks and insured branches of foreign

banks faced a possible competitive

disadvantage with respect to member

banks. In order to eliminate the

potential for any such competitive

disadvantage in the future and in light

of the FDIC’s statutory mandate to make

such exceptions to this prohibition as

are prescribed with respect to demand

deposits in member banks, the FDIC is

proposing to create an omnibus

exception to the prohibition on the

payment of interest on demand