[Federal Register Volume 64, Number 227 (Friday, November 26, 1999)]
[Proposed Rules]
[Pages 66411-66413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30813]


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 Proposed Rules
                                                 Federal Register
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 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.
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  Federal Register / Vol. 64, No. 227 / Friday, November 26, 1999 / 
Proposed Rules  

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. FV00-959-1 PR]


Onions Grown in South Texas; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would decrease the assessment rate established for 
the South Texas Onion Committee (Committee) for the 1999-2000 and 
subsequent fiscal periods from $0.05 to $0.04 per 50-pound container or 
equivalent of onions handled. The Committee is responsible for local 
administration of the marketing order which regulates the handling of 
onions grown in South Texas. Authorization to assess onion handlers 
enables the Committee to incur expenses that are reasonable and 
necessary to administer the program. The fiscal period began August 1 
and ends July 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by December 27, 1999.

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) 720-5698; 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: Belinda G. Garza, Regional Manager, 
McAllen Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, 1313 E. Hackberry, McAllen, Texas 78501; telephone: (956) 682-
2833, Fax: (956) 682-5942; 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) 720-5698. Small businesses may 
request information on complying with this regulation by contacting Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456; telephone (202) 720-2491, Fax: (202)720-5698, or E-mail: 
Jay.G[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 143 and Order No. 959, both as amended (7 CFR part 959), 
regulating the handling of onions grown in South Texas, 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, South Texas 
onion handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate as proposed herein would be applicable to all 
assessable onions beginning on August 1, 1999, 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 would decrease the assessment rate established for the 
Committee for the 1999-2000 and subsequent fiscal periods from $0.05 to 
$0.04 per 50-pound container or equivalent of onions handled.
    The South Texas 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 
South Texas 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 1997-98 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate of $0.05 
per 50-pound container or equivalent 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, in a mail vote, unanimously recommended 1999-2000 
expenses of $271,000 for personnel, office, compliance, promotion, and 
research expenses. These expenses were approved in July 1999. The 
assessment rate and specific funding for research and promotion 
projects were to be recommended at a later Committee meeting.
    The Committee subsequently met on September 16, 1999, and 
recommended 1999-2000 expenditures of $301,000 and an assessment rate 
of $0.04 per 50-pound container or equivalent of onions. In comparison, 
last year's budgeted expenditures were $271,000.

[[Page 66412]]

The assessment rate of $0.04 is $0.01 lower than the rate currently in 
effect. The Committee voted to lower its assessment rate because at the 
current rate of assessment, income would exceed anticipated expenses by 
about $74,000 and the projected reserve on July 31, 2000 ($458,720), 
would exceed the level the Committee believes to be adequate to 
administer the program.
    The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $97,200 for administrative expenses, $34,800 
for compliance, $36,000 for promotion, and $133,000 for research 
projects. Budgeted expenses for these items in 1998-99 were $94,000, 
$36,000, $33,000, and $108,000, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of South Texas 
onions. Onion shipments for the year are estimated at 7.5 million 50-
pound equivalents, which should provide $300,000 in assessment income. 
Income derived from handler assessments, along with interest income and 
funds from the Committee's authorized reserve, would be adequate to 
cover budgeted expenses. Funds in the reserve (currently $384,720) 
would be kept within the maximum permitted by the order (approximately 
two fiscal periods' expenses; Sec. 959.43).
    The proposed assessment rate would 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 would be in effect for an indefinite 
period, the Committee would 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 would 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking would be undertaken as necessary. The Committee's 
1999-2000 budget and those for subsequent fiscal periods would 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 approximately 80 producers of South Texas onions in the 
production area and approximately 37 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (SBA) (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.
    Most of the handlers are vertically integrated corporations 
involved in producing, shipping, and marketing onions. For the 1998-99 
marketing year, onions produced on 13,782 acres were shipped by the 
industry's 37 handlers with the average and median volume handled being 
147,669 and 102,478 fifty-pound bag equivalents, respectively. In terms 
of production value, total revenues for the 37 handlers were estimated 
to be $43.7 million, with average and median revenues being $1.1 
million, and $820,000, respectively.
    The South Texas onion industry is characterized by producers and 
handlers whose farming operations generally involve more than one 
commodity, and whose income from farming operations is not exclusively 
dependent on the production of onions. Alternative crops provide an 
opportunity to utilize many of the same facilities and equipment not in 
use when the onion production season is complete. For this reason, 
typical onion producers and handlers either produce multiple crops or 
alternate crops within a single year.
    Based on the SBA's definition of small entities, the Committee 
estimates that all the 37 handlers regulated by the order would be 
considered small entities if only their spring onion revenues are 
considered. However, revenues from other productive enterprises would 
likely push a large number of these handlers above the $5,000,000 
annual receipt threshold. All of the 80 producers may be classified as 
small entities based on the SBA definition if only their revenue from 
spring onions is considered. When revenues from all sources is 
considered, a majority of the producers would not be considered small 
entities because receipts would exceed $500,000.
    This rule would decrease the assessment rate established for the 
Committee and collected from handlers for the 1999-2000 and subsequent 
fiscal periods from $0.05 to $0.04 per 50-pound container or equivalent 
of onions. The Committee recommended 1999-2000 expenditures of $301,000 
and an assessment rate of $0.04 per 50-pound container or equivalent. 
The proposed assessment rate of $0.04 is $0.01 lower than the 1998-99 
rate. The quantity of assessable onions for the 1999-2000 fiscal period 
is estimated at 7.5 million 50-pound equivalents. Income derived from 
handler assessments, along with interest income and funds from the 
Committee's authorized reserve, would be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $97,200 for administrative expenses, $34,800 
for compliance, $36,000 for promotion, and $133,000 for research 
projects. Budgeted expenses for these items in 1998-99 were $94,000, 
$36,000, $33,000, and $108,000, respectively.
    The Committee voted to lower its assessment rate because at the 
current rate of assessment, income would exceed anticipated expenses by 
about $74,000 and the projected reserve on July 31, 2000 ($458,720), 
would exceed the level the Committee believes to be adequate to 
administer the program.
    The Committee reviewed and recommended 1999-2000 expenditures of 
$301,000, which included increases in administrative and office 
salaries, and research programs. Prior to arriving at this budget, the 
Committee considered information from various sources, including the 
Research Subcommittee and the Market Development Subcommittee. 
Alternative expenditure levels were discussed by these groups, based 
upon the relative value of various research projects to the onion 
industry. The assessment rate of $0.04 per 50-pound equivalent of 
assessable onions was then determined by dividing the total recommended 
budget by the quantity of assessable onions, estimated at 7.5 million 
50-pound equivalents for the 1999-2000 fiscal period. This is 
approximately $1,000 below the anticipated expenses, which the 
Committee determined to be acceptable. Funds from the Committee's 
reserve

[[Page 66413]]

will be used to make up the expected deficit.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 1999 marketing season could range between $7.00 and 
$12.00 per 50-pound container or equivalent of onions. Therefore, the 
estimated assessment revenue for the 1999-2000 fiscal period as a 
percentage of total grower revenue could range between .571 and .333 
percent.
    This action would decrease 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 would reduce the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the South Texas onion industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the September 
16, 1999, 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 proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large South Texas 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.
    A small business guide on complying with fruit, vegetable, and 
speciality crop marketing agreements and orders may be viewed at the 
following web site: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber 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 proposed rule. Thirty days is deemed appropriate 
because: (1) The 1999-2000 fiscal period began on August 1, 1999, and 
the marketing order requires that the rate of assessment for each 
fiscal period apply to all assessable onions handled during such fiscal 
period; (2) the proposed rule would decrease the assessment rate for 
assessable onions beginning with the 1999-2000 fiscal period; and (3) 
handlers are aware of this action which was recommended by the 
Committee at a public meeting and is similar to other assessment rate 
actions issued in past years.

List of Subjects in 7 CFR Part 959

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 959 is 
proposed to be amended as follows:

PART 959--ONIONS GROWN IN SOUTH TEXAS

    1. The authority citation for 7 CFR part 959 continues to read as 
follows:

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

    2. Section 959.237 is revised to read as follows:


Sec. 959.237  Assessment rate.

    On and after August 1, 1999, an assessment rate of $0.04 per 50-
pound container or equivalent is established for South Texas onions.

    Dated: November 8, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-30813 Filed 11-24-99; 8:45 am]
BILLING CODE 3410-02-P