[Federal Register Volume 66, Number 148 (Wednesday, August 1, 2001)]
[Rules and Regulations]
[Pages 39621-39623]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19098]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. FV01-959-1 FIR]


Onions Grown in South Texas; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, without change, an interim final rule which decreased the 
assessment rate established for the South Texas Onion Committee 
(Committee) for the 2000-2001 and subsequent fiscal periods from $0.04 
to $0.03 per 50-pound container or equivalent of onions handled. The 
Committee locally administers 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 on 
August 1 and ends July 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: August 31, 2001.

FOR FURTHER INFORMATION CONTACT: Cynthia Cavazos, Marketing Assistant, 
McAllen Marketing Field Office, Marketing Order Administration Branch, 
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-
8938.
    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) 720-8938, 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 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 issued herein will be applicable to all assessable 
onions beginning August 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 continues to decrease the assessment rate established for 
the Committee for the 2000-2001 and subsequent fiscal periods from 
$0.04 to $0.03 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 1999-2000 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, in a mail vote, unanimously recommended 2000-2001 
expenses of $142,000 for personnel, office, compliance, and partial 
promotion expenses. These expenses were approved on July 31, 2000. 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 December 27, 2000, and 
unanimously recommended 2000-2001 expenditures of $306,740 and an 
assessment rate of $0.03 per 50-pound container of onions. In 
comparison, last year's budgeted expenditures were $301,000. The 
assessment rate of $0.03 is $0.01 lower than the rate previously in 
effect. The Committee voted to lower its assessment rate to reduce 
handler costs by about $75,000 ($0.01 assessment rate reduction X 
7,500,000 containers of assessable onions), and because the Committee 
believes the projected reserve on July 31, 2001 ($279,814), would be 
higher than needed to administer the program.
    The Committee recently entered into an agreement with the Texas 
Produce Association (Association) for management services. The 
Association also manages the Texas citrus and melon administrative 
committees (7 CFR parts 906 and 979) and several other State marketing 
organizations. The sharing of costs (staff, office space, and 
equipment) is expected to foster economy and efficiency. Each 
organization's share of the costs is based

[[Page 39622]]

upon the amount of work performed and time devoted to its activities.
    The major expenditures recommended by the Committee for the 2000-
2001 fiscal period include $117,544 for administrative expenses, 
$27,496 for compliance, $39,500 for promotion, and $122,200 for 
research projects. Budgeted expenses for these items in 1999-2000 were 
$97,200, $34,800, $36,000, and $133,000, 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 $225,000 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 $346,554) will 
be kept within the maximum permitted by the order (approximately two 
fiscal periods' expenses, Sec. 959.43).
    The assessment rate 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 
2000-2001 budget and those for subsequent fiscal periods will be 
reviewed and, as appropriate, approved by the Department.

Final Regulatory Flexibility Analysis

    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 final 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 82 producers of onions in South Texas and 
approximately 34 handlers subject to regulation under the marketing 
order. Small agricultural producers are defined by the Small Business 
Administration (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 are vertically integrated corporations 
involved in producing, shipping, and marketing onions. For the 1999-
2000 marketing year, the industry's 34 handlers shipped onions produced 
on 15,867 acres with the average and median volume handled being 
168,387 and 139,237 fifty-pound bag equivalents, respectively. In terms 
of production value, total revenues for the 34 handlers were estimated 
to be $48.7 million, with average and median revenues being $1.4 
million and $1.2 million, 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 34 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 82 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 continues to decrease the assessment rate established for 
the Committee and collected from handlers for the 2000-2001 and 
subsequent fiscal periods from $0.04 to $0.03 per 50-pound container or 
equivalent of onions. The Committee unanimously recommended 2000-2001 
expenditures of $306,740 and an assessment rate of $0.03 per 50-pound 
container or equivalent. The assessment rate of $0.03 is $0.01 lower 
than the 1999-2000 rate. The quantity of assessable onions for the 
2000-2001 fiscal period is estimated at 7.5 million 50-pound containers 
or equivalents.
    The Committee recently entered into an agreement with the Texas 
Produce Association (Association) for management services. The 
Association also manages the Texas citrus and melon administrative 
committees (7 CFR parts 906 and 979) and several other State marketing 
organizations. The sharing of costs (staff, office space, and 
equipment) is expected to foster economy and efficiency. Each 
organization's share of the costs is based upon the amount of work 
performed and time devoted to its activities. Income derived from 
handler assessments, along with interest income and funds from the 
Committee's authorized reserve, will be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2000-
2001 fiscal period include $117,544 for administrative expenses, 
$27,496 for compliance, $39,500 for promotion, and $122,200 for 
research projects. Budgeted expenses for these items in 1999-2000 were 
$97,200, $34,800, $36,000, and $133,000, respectively.
    The Committee voted to lower its assessment rate to lower handler 
costs by about $75,000 and because the Committee believes the projected 
reserve on July 31, 2001 ($279,814), would be higher than needed to 
administer the program.
    The Committee reviewed and unanimously recommended 2000-2001 
expenditures of $306,739, 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 Committee's Executive Committee, 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 $0.03 per 50-pound equivalent of assessable onions

[[Page 39623]]

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 2000-2001 fiscal period. This is approximately 
$81,740 below the anticipated expenses, which the Committee determined 
to be acceptable.
    A review of historical information and preliminary information 
pertaining to the 2000-2001 fiscal period indicates that the grower 
price for the 2000-2001 marketing season could range between $7.00 and 
$12.00 per 50-pound equivalent of onions. Therefore, the estimated 
assessment revenue for the 2000-2001 fiscal period as a percentage of 
total grower revenue could range between .43 and .25 percent.
    This action continues to 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 reduces 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 December 
27, 2000, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This action imposes 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.
    An interim final rule concerning this action was published in the 
Federal Register on March 27, 2001 (66 FR 16594). The interim final 
rule was made available through the Internet by the Office of the 
Federal Register. A 60-day comment period was provided for interested 
persons to respond to the interim final rule. The comment period ended 
on May 29, 2001, and no comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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.
    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.

List of Subjects in 7 CFR Part 959

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

PART 959--ONIONS GROWN IN SOUTH TEXAS

    Accordingly, the interim final rule amending 7 CFR part 959 which 
was published at 66 FR 16594 on March 27, 2001, is adopted as a final 
rule without change.

    Dated: July 26, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-19098 Filed 7-31-01; 8:45 am]
BILLING CODE 3410-02-P