[Federal Register Volume 64, Number 238 (Monday, December 13, 1999)]
[Proposed Rules]
[Pages 69419-69421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32233]


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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. 238 / Monday, December 13, 1999 / 
Proposed Rules  

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV00-955-1 PR]


Vidalia Onions Grown in Georgia; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposal would increase the assessment rate established 
for the Vidalia Onion Committee (Committee) for fiscal period 2000 and 
subsequent fiscal periods from $0.07 to $0.10 per 50-pound bag of 
Vidalia onions handled. 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 begins on 
January 1 and ends December 31. The assessment rate would remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by January 12, 2000.

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: William Pimental, Marketing 
Specialist, Southeast Marketing Field Office, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 2276, Winter Haven, FL 33883-2276; 
telephone: (863) 299-4770, Fax: (863) 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) 720-
5698, or E-mail: Jay.G[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 955 (7 CFR part 955), regulating the handling 
of Vidalia onions grown in Georgia area, 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 proposed herein would be applicable to all assessable Vidalia onions 
beginning on January 1, 2000, 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 increase the assessment rate established for the 
Committee for the fiscal period 2000 and subsequent fiscal periods from 
$0.07 to $0.10 per 50-pound bag of Vidalia onions handled.
    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 1998-99 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 September 30, 1999, and unanimously 
recommended fiscal period 2000 expenditures of $421,600 and an 
assessment rate of $0.10 per 50-pound bag of Vidalia onions. In 
comparison, 1998-99 budgeted expenditures were $373,577. However, 
during the 1998-99 fiscal period the Committee recommended and the 
Department approved a change in the fiscal period under the order to 
January 1-December 31 from September 16-September 15 to make the fiscal 
period consistent with the Vidalia onion marketing season (64 FR 48243, 
September 3, 1999). To provide for continuous operation of the order, 
the 1998-99 fiscal period was extended by 3 and \1/2\ months (from 
September 16 to

[[Page 69420]]

December 31, 1999). As a result, actual expenditures for 1998-99 are 
expected to total about $475,577. In addition, the quantity of 
assessable onions for 1998-99 and assessment income is much less than 
expected. The Committee projected the quantity of assessable onions for 
1998-99 at 4,842,857 50-pound bags and assessment revenue at $339,000. 
The actual quantity of assessable onions is expected to be 3,617,017 
50-pound bags, and assessment revenue is expected to total $253,191. 
Because of this shortfall, the Committee will have to use more of its 
operating reserve to cover approved expenses than it expected.
    The assessment rate of $0.10 is $0.03 higher than the rate 
currently in effect. The increase is needed so the Committee can 
maintain its operating reserve at an acceptable level, and to cover 
increases in the Committee's promotion expenses for fiscal period 2000.
    The major expenditures recommended by the Committee for fiscal 
period 2000 include $135,127 for administrative costs, $31,800 for 
compliance activities, $175,000 for promotional activities, and $47,000 
for research projects. Budgeted expenses for these items in 1998-99 
(including the 3\1/2\ month extension) are $151,127 for administrative 
costs, $37,850 for compliance activities, $161,600 for promotional 
activities, and $125,000 for research projects.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Vidalia onions. 
Onion shipments for fiscal period 2000 are estimated at 4,200,000 50-
pound bags or equivalent which should provide $420,000 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 for fiscal period 2000. Funds in 
the reserve (currently projected to be $83,000 on December 31, 1999), 
would be kept within the maximum permitted by the order (about three 
fiscal period's budgeted expenses; Sec. 955.44).
    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 
fiscal period 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 133 producers of Vidalia onions in the 
production area and approximately 91 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.
    Based on the Georgia Agricultural Statistical Service and committee 
data, the average price for fresh Vidalia onions during the 1998-99 
season was $15.45 per 50-pound bag or equivalent and total shipments 
were 3,617,017 bags. Approximately 28 percent of all handlers handled 
83 percent of Vidalia onion shipments. Many Vidalia onion handlers ship 
other vegetable products which are not included in the committee data 
but would contribute further to handler receipts.
    Using the average price, about 97.4 percent of the Vidalia onion 
handlers could be considered small businesses under the SBA definition. 
The majority of Vidalia Onion producers and handlers may be classified 
as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for fiscal period 2000 and 
subsequent fiscal periods from $0.07 to $0.10 per 50-pound bag or 
equivalent of assessable onions. The Committee unanimously recommended 
fiscal period 2000 expenditures of $421,600 and an assessment rate of 
$0.10 per 50-pound bag or equivalent. The proposed assessment rate of 
$0.10 is $0.03 higher than the 1998-99 rate. The quantity of assessable 
Vidalia onions for fiscal period 2000 is estimated at 4,200,000 50-
pound bags. Thus, the $0.10 rate should provide $420,000 in assessment 
income. Income derived from handler assessments, along with interest 
income and funds from the Committee's authorized reserve, would be a 
dequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for fiscal 
period 2000 include $135,127 for administrative costs, $31,800 for 
compliance activities, $175,000 for promotional activities, and $47,000 
for research projects. Budgeted expenses for these items in 1998-99 
(including the 3\1/2\ month extension) were $151,127 for administrative 
costs, $37,850 for compliance activities, $161,600 for promotional 
activities, and $125,000 for research projects.
    As mentioned earlier, in an effort to recover from its assessment 
income shortfall in 1998-99, maintain its operating reserve at an 
acceptable level, and expand its promotion activities, the Committee 
voted unanimously to increase its assessment rate to cover operating 
expenses during fiscal period 2000. The Committee believes that 
increased promotion activities are needed to help the Vidalia onion 
industry remain competitive in the marketplace.
    The Committee reviewed and unanimously recommended fiscal period 
2000 expenditures of $421,600. Prior to arriving at this budget, the 
Committee considered information from various sources, such as the 
Budget Subcommittee, the Research Subcommittee, and the Advertising and 
Promotion Subcommittee. Alternative expenditure levels were discussed 
by these groups, based upon the relative value of various promotion and 
research projects to the Vidalia onion industry. The assessment rate of 
$0.10 per 50-pound bag or equivalent of assessable Vidalia onions was 
then determined by dividing the total recommended budget by the 
quantity of assessable onions, estimated at 4,200,000 50-pound bags for 
fiscal period 2000. This rate will generate $420,000, which is $1,600

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below the anticipated expenses. The Committee found this acceptable 
because interest income and reserve funds are available to make up the 
deficit.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for fiscal period 2000 could range between $10.00 and $15.00 per 
50-pound bag of Vidalia onions. Therefore, the estimated assessment 
revenue for fiscal period 2000 as a percentage of total grower revenue 
could range between 0.7 and 1.0 percent.
    While assessments impose some additional costs on handlers, the 
costs are minimal and uniform on all handlers. Some of the additional 
costs may be passed on to producers. However, these costs would be 
offset by the benefits derived by the operation of the marketing order. 
In addition, the Committee's meeting was widely publicized throughout 
the Vidalia onion production area and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the September 
30, 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 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.
    A small business guide on complying with fruit, vegetable, and 
specialty 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 2000 fiscal period begins on January 1, 2000, 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) the Committee needs to have sufficient funds to pay 
its expenses which are incurred on a continuous basis; and (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.

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 
proposed to be amended as follows:

PART 911--VIDALIA ONIONS GROWN IN GEORGIA

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

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

    2. Section 955.209 is revised to read as follows:


Sec. 911.209  Assessment rate.

    On and after January 1, 2000, an assessment rate of $0.10 per 50-
pound bag or equivalent is established for Vidalia onions.

    Dated: December 7, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-32233 Filed 12-10-99; 8:45 am]
BILLING CODE 3410-02-P