[Federal Register Volume 65, Number 32 (Wednesday, February 16, 2000)]
[Rules and Regulations]
[Pages 7711-7715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3655]



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 Rules and Regulations
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  Federal Register / Vol. 65, No. 32 / Wednesday, February 16, 2000 / 
Rules and Regulations  

[[Page 7711]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. FV00-959-2 IFR]


Onions Grown in South Texas; Change in Container Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule revises the container requirements for shipping 
onions to fresh processors under the South Texas onion marketing order. 
The marketing order regulates the handling of onions grown in South 
Texas and is administered locally by the South Texas Onion Committee 
(Committee). This rule provides handlers additional marketing 
flexibility by allowing them to ship onions for peeling, chopping, and 
slicing in bulk trailer loads, 48-inch deep bulk bins, and tote bags. 
These changes will allow the South Texas onion industry to better meet 
the needs of fresh processors and allow the industry to compete with 
other suppliers of onions for fresh processing.

DATES: Effective February 17, 2000; comments received by April 17, 2000 
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, PO Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-5698, or E-mail: 
[email protected]. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the Office 
of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager, 
McAllen Marketing Field Office, Marketing Order Administration Branch, 
Fruit and Vegetable Programs, AMS, USDA, 1313 E. Hackberry, McAllen, TX 
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, PO 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, PO Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 
720-5698, or E-mail: [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. This rule is not intended to have retroactive effect. 
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. A 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 revises the container requirements for onion shipments 
for peeling, chopping, and slicing currently prescribed under the South 
Texas onion marketing order. Handlers will be allowed to ship onions 
for peeling, chopping, and slicing in bulk trailer loads, 48-inch deep 
bulk bins, and tote bags. Currently, onions for these purposes may only 
be shipped in 47 inch by 37\1/2\ inch by 36 inch deep bulk bins, having 
a volume of 63,450 cubic inches (hereinafter referred to as the ``36-
inch deep bulk bin''), or containers deemed similar by the Committee. A 
dimension tolerance for the bulk containers is also being added. All 
handlers shipping onions for peeling, chopping, and slicing will 
continue to be required to meet grade, size, inspection, and safeguard 
requirements. The additional method of shipment and containers will 
allow the South Texas onion industry to better meet the needs of fresh 
processors and allow the industry to compete with other suppliers of 
onions for fresh processing.
    These changes were first unanimously recommended by the Committee 
at its meeting on September 16, 1999. At that meeting, the Chairman 
appointed a subcommittee to review the Committee's recommendations. On 
October 19, 1999, the Committee met again and unanimously approved the 
subcommittee's recommendations detailed herein.
    Section 959.52 of the South Texas onion marketing order authorizes 
the establishment of grade, size, quality, maturity, and pack and 
container regulations for shipments of onions. Section 959.52(c) allows 
for the modification, suspension, or termination of such regulations 
when warranted. Section 959.53 authorizes changes to the order's 
regulations to facilitate the handling of onions for relief, charity, 
experimental purposes, export, or other purposes recommended by the 
Committee and approved by the Secretary. Section 959.54 of the order 
provides authority for the Committee to

[[Page 7712]]

establish that onions handled for special purposes are handled only as 
authorized. Section 959.60 provides that whenever onions are regulated 
pursuant to Sec. 959.52, such onions must be inspected by the 
inspection service and certified as meeting the applicable 
requirements. Section 959.80 of the order authorizes handler reporting 
requirements.
    Section 959.322(f) of the order's rules and regulations provides 
specific safeguards for certain special purpose shipments of onions. 
Furthermore, paragraph (f)(3) of Sec. 959.322 provides authority for 
the shipment of onions for fresh peeling, chopping, and slicing in 36-
inch deep bulk bins, or containers deemed similar by the Committee. 
Such shipments are exempt from the container requirements specified in 
paragraph (c) of Sec. 959.322, but are required to be handled in 
accordance with the safeguard provisions of Sec. 959.54, and meet the 
grade requirements in paragraph (a), the size requirements in paragraph 
(b), the inspection requirements in paragraph (d), and the safeguard 
requirements in paragraph (g) of Sec. 959.322.
    Currently, Sec. 959.322(f)(3) allows onion shipments for peeling, 
chopping, and slicing in 36-inch deep bulk bins, or containers deemed 
similar by the Committee. The Committee recommended that shipments of 
onions to these outlets be authorized in bulk trailer loads, 48-inch 
deep bulk bins (with the same length and width dimensions as the 36-
inch deep bulk bin), and tote bags, and that the provisions on 
containers deemed similar be removed because it has caused confusion in 
the industry. In its place, the Committee recommended implementation of 
a dimension tolerance.
    The market for onions for fresh processing uses has grown 
dramatically in the last five years. The food service industry is the 
fastest growing market for onions in the United States. Consumption of 
onions has increased, especially for onions used in restaurants, salad 
bars, and cafeterias in fresh peeled, chopped, or sliced form. Fresh 
process is an increasingly important market for the domestic onion 
industry, and is expected to continue growing.
    Buyers of onions for fresh processing continually demand 
flexibility in container availability, and the Committee is always 
looking for ways to strengthen and expand the market for South Texas 
onions. The Committee believes that South Texas may enhance its ability 
to take full advantage of available marketing opportunities for fresh 
peeling, chopping, and slicing onions with the more flexible shipping 
container requirements. The more flexible containers and method of 
shipment may allow the South Texas onion industry to better meet the 
needs of fresh processors and allow the industry to better compete with 
other suppliers of onions for fresh processing. The changes are 
expected to open new markets for South Texas and help the industry 
increase its fresh processed onion market share. The Committee 
estimates that these changes may help the industry double shipments 
into these outlets.
    Because the demand for fresh processed onions is increasing and 
Texas has not been able to market more of its crop in the conveyances 
and containers the trade desires, the trade has been going to other 
competing areas, that are not restricted by regulations, leaving Texas 
at a disadvantage. Presently, other onion-growing areas can ship onions 
in bulk loads for peeling, chopping, and slicing purposes, but the 
South Texas onion industry cannot do so because the regulations 
restrict shipments to 36-inch deep bulk bins. Competition from other 
onion production areas demands that the South Texas onion industry be 
able to quickly respond to buyer demands for other types of shipments. 
Also, other onion producing areas not bound by restrictions have the 
flexibility to ship fresh processing onions as needed by buyers. The 
added flexibility of these changes will allow handlers to meet the 
competition from other areas and better meet buyer's needs.
    The Committee also recommended adding tightly-woven mesh plastic 
tote bags 36 inches by 36 inches by 66 inches long with a capacity of 
approximately 2,000 pounds of onions for shipment to fresh processors. 
These tote bags are returnable and have four handles that are placed to 
fit forklifts. Ties are attached to each end of the bags and the onions 
may be dumped by unfastening the bottom tie. Use of these bags will 
help speed up the unloading process, saving time and money for the 
fresh processors.
    The total volume specification of 63,450 cubic inches for the 36-
inch bulk bin currently included in the regulation does not allow any 
flexibility in the dimension of the container and the phrase ``or 
containers deemed similar by the committee'' lacks specificity and 
could result in confusion. The Committee believes that a more precise 
tolerance is needed so that there is no room for misinterpretation by 
the industry. The Committee, therefore, recommended removing the phrase 
``and having a volume of 63,450 cubic inches, or containers deemed 
similar by the committee'' and adding in its place provisions 
establishing a dimension tolerance of 2 inches for each dimension on 
all bulk containers used for shipping onions for peeling, chopping, and 
slicing. The 2-inch tolerance for each dimension on all bulk containers 
will allow handlers to pack onions for peeling, chopping, and slicing 
in containers with dimensions slightly different from the sizes 
specified in the regulation. Identifying a specific dimension tolerance 
in the regulation will prevent misunderstandings, and provide handlers 
packing flexibility. The addition of the container dimension tolerance 
recognizes the difficulty in producing containers with precise 
measurements all of the time.
    The Committee recommended that the regulation specify that only 3-
inch and larger onions be shipped for these purposes because smaller 
onions cannot be processed efficiently using available machinery. 
However, the provisions under which this action is being implemented do 
not authorize the establishment of a minimum size different than the 1-
inch minimum currently in place for all shipments. Therefore, this 
recommendation is not being implemented. Lastly, minor changes are 
being made to the handling regulation for clarity.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), AMS has considered the economic impact of this action 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 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 37 handlers subject to regulation under the 
marketing order. Small agricultural producers have been defined by the 
Small Business Administration (SBA) (13 CFR 121.201) 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 in South Texas are vertically integrated 
corporations involved in producing, shipping, and marketing onions. For 
the 1998-99

[[Page 7713]]

marketing year, onions produced in the production area 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 from 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 are 
considered, a majority of the producers would not be considered small 
entities because receipts would exceed $500,000.
    This rule revises the container requirements for onion shipments 
for peeling, chopping, and slicing currently prescribed under the South 
Texas onion marketing order. Shipments of onions for these purposes 
will be permitted in bulk loads, 48-inch deep bulk bins, and tote bags, 
in addition to the currently approved 36-inch deep bulk bin. A 
dimension tolerance for the bulk containers will also be added. All 
handlers shipping onions for peeling, chopping, and slicing will 
continue to be required to meet grade, size, inspection, and safeguard 
requirements.
    This rule change will allow South Texas onion handlers to supply 
existing markets, may open up new markets to satisfy fresh processor 
demand, and may allow the industry to be more competitive in the 
marketplace. Allowing shipments of onions to fresh processors in bulk 
loads, 48-inch bulk bins, and tote bags, in addition to the current 36-
inch deep bulk bin, is expected by the Committee to double the 
shipments of Texas onions to fresh processed buyers. The increase in 
shipments is expected because the changes will allow the South Texas 
onion industry to better meet the needs of fresh processors and allow 
the industry to compete with other suppliers of onions for fresh 
processing.
    At the meetings, the Committee discussed the impact of these 
changes on handlers and producers and believed that the benefits of 
this rule are not expected to be disproportionately greater or less for 
small handlers or producers than for larger entities. The increased 
shipping flexibility is expected to be equally beneficial to all 
shippers regardless of size.
    An alternative to this action would be to maintain the status quo, 
however, the Committee believes that the current regulation does not 
address the needs of handlers desiring to expand their fresh process 
onion marketing efforts. The Committee believes that the regulations 
should be modified to address these needs. The Committee further 
believes that not allowing different types of bulk shipments for 
peeling, chopping, and slicing will be detrimental to the South Texas 
onion industry. Allowing shipments of onions in additional bulk bins 
and in bulk loads will meet the industry's objective of marketing more 
onions. These changes should provide the industry with additional 
marketing opportunities and should allow the industry to be more 
competitive.
    Currently, all handlers making onion shipments for relief, charity, 
processing, experimental purposes, or peeling, chopping, and slicing 
are required to apply for and obtain a Certificate of Privilege from 
the Committee to make such shipments. No additional reporting burden is 
estimated in making such applications because all 37 of the handlers in 
the Texas onion industry routinely apply each season for these 
certificates and this is expected to continue. However, this action 
will impose additional reporting requirements on the 37 onion handlers. 
Because this action is expected to foster increased shipments, the 
handlers are expected to file more Reports of Special Purpose Onion 
Shipments. This report accompanies each shipment and takes about .083 
hours to complete. It is used to verify proper disposition of the 
onions. Currently, each of the 37 handlers ship approximately 15 loads 
of onions for special purposes. The Committee estimates that this rule 
change will double the number of shipments going to these outlets to 30 
loads per handler, which will result in an estimated burden to the 
previously-mentioned 37 handlers of about 92 hours.
    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.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule have been previously approved by the Office of Management 
and Budget (OMB) and are being assigned OMB No. 0581-0187. In addition, 
the Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    The Committee's meetings were widely publicized throughout the 
onion industry and all interested persons were invited to attend the 
meetings and participate in Committee deliberations on all issues. Like 
all Committee meetings, the October 19, 1999, meeting was a public 
meeting and all entities, both large and small, were able to express 
their views on this issue. The Committee itself is composed of 17 
members, of which 10 are producers and 7 are handlers. Also, the 
Committee has subcommittees to review certain issues and make 
recommendations to the Committee. The subcommittee met on October 12, 
1999, and discussed this issue in detail. The meeting was a public 
meeting and both large and small entities were able to participate and 
express their views. Finally, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses. 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.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), this notice announces that AMS has obtained emergency 
approval for a new information collection request for Onions Grown in 
South Texas, Marketing Order No. 959.
    Title: Onions Grown in South Texas, Marketing Order No. 959.
    OMB Number: 0581-New.
    Type of Request: New collection.

[[Page 7714]]

    Abstract: Marketing order programs provide an opportunity for 
producers of fresh fruits, vegetables, and specialty crops, in a 
specified production area, to work together to solve marketing problems 
that cannot be solved individually. Order regulations help ensure 
adequate supplies of good quality produce and adequate returns to 
producers. Under the Act, industries enter into marketing order 
programs. The Secretary of Agriculture is authorized to oversee the 
order's operations and issue regulations recommended by a committee of 
representatives from each commodity industry.
    The South Texas onion marketing order, which has been operating 
since 1961, authorizes the issuance of grade, size, quality, pack, and 
container requirements. The order also has authority for research and 
development projects. Regulatory provisions apply to onions shipped 
within and out of the area of production to any market, except those 
specifically exempted by the marketing order. Pursuant to section 8e of 
the Act, import grade and size requirements are implemented on onions 
imported into the United States.
    The order, and rules and regulations issued thereunder, authorize 
the Committee, the agency responsible for local administration of the 
order, to require handlers and producers to submit certain information. 
Much of this information is compiled in aggregate and provided to the 
industry to assist in marketing decisions. The information collection 
requirements in this request are essential to carry out the intent of 
the Act, to provide the respondents the type of service they request, 
and to administer the South Texas onion marketing order program.
    The Committee has developed forms as a convenience to persons who 
are required to file information with the Committee that is needed to 
carry out the requirements of the order, and their use is necessary to 
fulfill the intent of the Act as expressed in the order, and the rules 
and regulations issued thereunder. South Texas onions are shipped from 
March 1 through June 4 and these forms are used accordingly.
    The information collected would be used only by authorized 
representatives of the USDA, including AMS, Fruit and Vegetable 
Programs regional and headquarter's staff, and authorized employees of 
the Committee. Authorized Committee employees and the industry are the 
primary users of the information and AMS is the secondary user.
    This collection consists of a requirement for handlers to file a 
Report of Special Purpose Onion Shipments with the Committee when 
shipping onions for fresh processing outlets. Shipments of South Texas 
onions for special purposes are exempt from certain requirements under 
the order. However, onions for peeling, chopping, and slicing must meet 
grade, size, inspection, and safeguard requirements of the order. Use 
of this form is authorized under Sec. 959.322(g)(4). The Report of 
Special Purpose Onion Shipment would be completed for each load of 
onions for special purposes, including onions for peeling, chopping, 
and slicing, by each of the 37 reporting handlers. The estimated annual 
burden hours is about 92 hours.
    The Committee believes that to improve returns to producers and 
handlers, handlers should be encouraged to develop new outlets. This 
action is expected to encourage additional onion shipments by allowing 
handlers to ship onions for fresh processing using different methods of 
shipping. The information supplied by the applicant handler would 
provide the Committee with information necessary to ensure that the 
onions are disposed of as intended.
    The information collection burden is as follows:
    Estimate of Burden: Public reporting burden for the Report of 
Special Purpose Onion Shipment form is estimated to average 5 minutes 
per response.
    Respondents: Handlers of onions grown in South Texas.
    Estimated Number of Respondents: 37.
    Estimated Number of Responses per Respondent: 30 annually.
    Estimated Total Annual Burden on Respondents: 92 hours.
    Comments: Comments are invited on: (1) Whether the new collection 
of the information is necessary for the proper performance of the 
functions of the agency, including whether the information will have 
practical utility; (2) the accuracy of the agency's estimate of the 
burden of the new collection of information, including the validity of 
the methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Comments should reference OMB No. 0581-0187 and South Texas Onion 
Marketing Order No. 959, and be sent to the USDA in care of the Docket 
Clerk at the address above. All comments received will be available for 
public inspection during regular business hours at the same address.
    Because there was not enough time for a normal clearance procedure, 
AMS has obtained temporary approval from OMB for this new collection 
for the upcoming shipping season expected to begin in early March 2000. 
At a later time, the new collection will be added to the collection 
currently approved for use under OMB Number 0581-0178.
    All responses to this notice will be summarized and included in the 
request for OMB approval of 0581-0178. All comments will also become a 
matter of public record.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    This rule invites comments on a revision to the container 
requirements for shipping onions to fresh processors currently 
prescribed under the South Texas onion marketing order. Any comments 
received will be considered prior to finalization of this rule.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that 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) This rule relaxes requirements for shipping onions to 
fresh processors and provides additional marketing flexibility for the 
industry to ship onions; (2) this rule needs to be in place for the 
2000 season beginning March 1, 2000, so the industry may take advantage 
of the relaxed requirements; (3) the Committee unanimously recommended 
these changes at public meetings, and interested parties had an 
opportunity to provide input; and (4) this rule provides a 60-day 
comment period, which is considered appropriate in view of this above, 
and any comments received will be considered prior to finalization of 
this rule.

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 
amended as follows:

[[Page 7715]]

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. In Sec. 959.322, paragraph (f)(3)(i) is redesignated as (f)(3) 
and revised to read as follows:


Sec. 959.322  Handling regulation.

* * * * *
    (f) * * *
    (3) Peeling, chopping, and slicing. Upon approval of the committee, 
onions for peeling, chopping, and slicing may be shipped in bulk loads, 
bulk bins with inside dimensions of 47 inches  x  37\1/2\ inches  x  36 
or 48 inches deep, and tote bags 36 inches by 36 inches by 66 inches 
long, with a weight capacity of approximately 2,000 pounds. A tolerance 
of 2 inches for each dimension shall be permitted. Such shipments shall 
be exempt from paragraph (c) of this section, but shall be handled in 
accordance with the requirements of paragraphs (a), (b), (d), and (g) 
of this section.
* * * * *

    Dated: February 10, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-3655 Filed 2-15-00; 8:45 am]
BILLING CODE 3410-02-P