[Federal Register Volume 63, Number 186 (Friday, September 25, 1998)]
[Rules and Regulations]
[Pages 51269-51271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25719]



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  Federal Register / Vol. 63, No. 186 / Friday, September 25, 1998 / 
Rules and Regulations  

[[Page 51269]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV98-955-1 IFR]


Vidalia Onions Grown in Georgia; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate from $0.10 to $0.07 
per 50-pound bag or equivalent of Vidalia onions established for the 
Vidalia Onion Committee (Committee) under Marketing Order No. 955 for 
the 1998-99 and subsequent fiscal periods. The Committee is responsible 
for local administration of the marketing order which regulates the 
handling of Vidalia onions grown in Georgia. Authorization to assess 
Vidalia onion handlers enables the Committee to incur expenses that are 
reasonable and necessary to administer the program. The fiscal period 
began September 16 and ends September 15. The assessment rate will 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective: September 28, 1998. Comments received by November 24, 
1998, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail: 
[email protected]. Comments should reference the docket number 
and the date and page number of this issue of the Federal Register and 
will be available for public inspection in the Office of the Docket 
Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing 
Field Office, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276, 
Winter Haven, FL 33883-2276; telephone: (941) 299-4770, Fax: (941) 299-
5169; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 205-6632. Small businesses may request information 
on compliance with this regulation by contacting Jay Guerber, Marketing 
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 
room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: 
(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 955, both as amended (7 CFR part 955), 
regulating the handling of Vidalia onions grown in Georgia, hereinafter 
referred to as the ``order.'' The marketing agreement and order are 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, Vidalia onion 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rate 
as issued herein will be applicable to all assessable Vidalia onions 
beginning September 16, 1998, and continue until amended, suspended, or 
terminated. This rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. Such handler is afforded the opportunity for a hearing on 
the petition. After the hearing the Secretary would rule on the 
petition. The Act provides that the district court of the United States 
in any district in which the handler is an inhabitant, or has his or 
her principal place of business, has jurisdiction to review the 
Secretary'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 rule deceases the assessment rate established for the 
Committee for the 1998-99 and subsequent fiscal periods from $0.10 to 
$0.07 per 50-pound bag or equivalent of Vidalia onions.
    The Vidalia onion marketing order provides authority for the 
Committee, with the approval of the Department, to formulate an annual 
budget of expenses and collect assessments from handlers to administer 
the program. The members of the Committee are producers and handlers of 
Vidalia onions. They are familiar with the Committee's needs and with 
the costs for goods and services in their local area and are thus in a 
position to formulate an appropriate budget and assessment rate. The 
assessment rate is formulated and discussed in a public meeting. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 1996-97 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by the Secretary upon recommendation and 
information submitted by the Committee or other information available 
to the Secretary.
    The Committee met on July 28, 1998, and unanimously recommended 
1998-99 expenditures of $373,577 and an assessment rate of $0.07 per 
50-pound bag or equivalent of Vidalia onions. In comparison, last 
year's budgeted expenditures were $429,800. The assessment rate of 
$0.07 is $0.03 lower than the rate currently in effect. For the past 
two seasons, the Committee has elected to refund excess funds to the 
handlers to reduce their costs. The Committee unanimously elected to 
reduce the assessment rate rather than

[[Page 51270]]

continue the practice of refunding excess funds.
    The major expenditures recommended by the Committee for the 1998-99 
fiscal period include $131,600 for marketing and promotion, $75,000 for 
research, $135,127 for program administration, and $31,850 for 
compliance. Budgeted expenses for these items in 1997-98 were $158,000, 
$108,300, $137,500, and $26,000, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Vidalia onions. 
Vidalia onion shipments for 1998-99 are estimated at 3,300,000 50-pound 
bags or equivalents for the year, 15,000 50-pound bags or equivalents 
of green Vidalias, 1,385,000 50-pound bags or equivalents of storage 
Vidalias, and 100,000 50-pound bags or equivalents of storage onions 
from the previous season, which should provide $336,000 in assessment 
income. Income derived from handler assessments, along with interest 
income and funds from the Committee's authorized reserve, will be 
adequate to cover budgeted expenses. Funds in the reserve (currently 
$174,073) will be kept within the maximum permitted by the order 
(approximately three fiscal periods' budgeted expenses; Sec. 955.44).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the 
Committee or other available information.
    Although this assessment rate is effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department will 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking will be undertaken as necessary. The Committee's 
1998-99 budget and those for subsequent fiscal periods will be reviewed 
and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this 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 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are currently approximately 136 producers of Vidalia onions 
in the production area and approximately 101 handlers subject to 
regulation under the marketing order. Small agricultural producers have 
been defined by the Small Business Administration (13 CFR 121.601) as 
those having annual receipts less than $500,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000.
    During the 1996-97 fiscal year, as a percentage, approximately 14 
percent of the handlers shipped approximately 2,771,000 50-pound bags 
or equivalents of Vidalia onions and approximately 86 percent of the 
handlers shipped approximately 1,262,940 50-pound bags or equivalents. 
Using an average f.o.b. price of $12.80 per 50-pound bag or equivalent, 
the majority of handlers could be considered small businesses under 
SBA's definition. The majority of handlers and producers of Vidalia 
onions may be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 1998-99 and subsequent 
fiscal periods from $0.10 to $0.07 per 50-pound bag or equivalent of 
Vidalia onions. The Committee unanimously recommended 1998-99 
expenditures of $373,577 and an assessment rate of $0.07 per 50-pound 
bag or equivalent. The assessment rate of $0.07 is $0.03 lower than the 
1997-98 rate. The quantity of assessable Vidalia onions for the 1998-99 
season is estimated at 4,800,000 50-pound bags or equivalents. Thus, 
the $0.07 rate should provide $336,000 in assessment income. Income 
derived from handler assessments, along with interest income and funds 
from the Committee's authorized reserve, will be adequate to cover 
budgeted expenses. Funds in the reserve (currently $174,073) will be 
kept within the maximum permitted by the order (approximately three 
fiscal periods' budgeted expenses; Sec. 955.44).
    The major expenditures recommended by the Committee for the 1998-99 
year include $131,600 for marketing and promotion, $75,000 for 
research, $135,127 for program administration, and $31,850 for 
compliance. Budgeted expenses for these items in 1997-98 were $158,000, 
$108,300, $137,500, and $26,000, respectively.
    For the past two seasons, the Committee has refunded excess funds 
to the handlers to reduce their costs. The Committee unanimously 
elected to reduce the assessment rate rather than continue the practice 
of refunding excess funds.
    The Committee reviewed and unanimously recommended 1998-99 
expenditures of $373,577 which included decreases in marketing and 
promotion and research. Prior to arriving at this budget, the Committee 
considered information from various sources, such as the Committee's 
Budget Subcommittee. Alternative expenditure levels were discussed by 
these groups, based upon the relative value of various research 
projects to the Vidalia onion industry. The assessment rate of $0.07 
per 50-pound bag or equivalent of assessable Vidalia onions was then 
determined by dividing the total recommended budget by the quantity of 
assessable Vidalia onions, estimated at 4,800,000 50-pound bags or 
equivalents for the 1998-99 season. This is approximately $37,577 below 
the anticipated expenses, which the Committee determined to be 
acceptable. The difference between assessment income and budgeted 
expenses will be covered by income from interest and the Committee's 
authorized reserve.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the f.o.b. 
price for the 1998-99 season could range between $12.80 and $15.25 per 
50-pound bag or equivalent of Vidalia onions. Therefore, the estimated 
assessment revenue for the 1998-99 fiscal period as a percentage of 
total handler revenue could range between .46 and .55 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the Vidalia onion industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee

[[Page 51271]]

meetings, the July 28, 1998, meeting was a public meeting and all 
entities, both large and small, were able to express views on this 
issue. Finally, interested persons are invited to submit information on 
the regulatory and informational impacts of this action on small 
businesses.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large Vidalia onion 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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) The 1998-99 fiscal period begins on September 16, 
1998, and the marketing order requires that the rate of assessment for 
each fiscal period apply to all assessable Vidalia onions handled 
during such fiscal period; (2) this action decreases the assessment 
rate for assessable Vidalia onions beginning with the 1998-99 and 
subsequent fiscal periods; (3) handlers are aware of this action which 
was unanimously recommended by the Committee at a public meeting and is 
similar to other assessment rate actions issued in past years; and (4) 
this interim final rule provides a 60-day comment period, and all 
comments timely received will be considered prior to finalization of 
this rule.

List of Subjects in 7 CFR Part 955

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 955 is 
amended as follows:

PART 955--VIDALIA ONIONS GROWN IN GEORGIA

    1. The authority citation for 7 CFR part 955 continues to read as 
follows:

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

    2. Section 955.209 is revised to read as follows:


Sec. 955.209  Assessment rate.

    On and after September 16, 1998, an assessment rate of $0.07 per 
50-pound bag or equivalent is established for Vidalia onions.

    Dated: September 21, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-25719 Filed 9-24-98; 8:45 am]
BILLING CODE 3410-02-U