[Federal Register Volume 73, Number 41 (Friday, February 29, 2008)]
[Rules and Regulations]
[Pages 10973-10976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-3944]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket Nos. AO-322-A4; AMS-2006-0079; FV06-959-1]


Onions Grown in South Texas; Order Amending Marketing Order No. 
959

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule amends Marketing Order No. 959 (order), which 
regulates the handling of onions grown in South Texas. The amendments 
are based on those proposed by the South Texas Onion Committee 
(committee), which is responsible for local administration of the 
order, and the Department of Agriculture (USDA). The amendments will 
authorize interest and late payment charges on assessments not paid 
within a prescribed time period and require that a continuance 
referendum be conducted every six years to determine grower support for 
the order. The amendments were approved by onion growers in a mail 
referendum conducted from September 10 through September 28, 2007. The 
amendments are intended to improve the operation and functioning of the 
South Texas onion marketing order program. Proposed amendments that 
failed in referendum and are not included in this final order include 
authority for supplemental assessment rates, marketing promotion and 
paid advertising authority, and tenure limitations for committee 
members.

DATES: This rule is effective March 31, 2008.

FOR FURTHER INFORMATION CONTACT: Martin Engeler, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, Agricultural 
Marketing Service, USDA, 2202 Monterey Street, 102-B, Fresno, 
CA 93721; telephone: (559) 487-5110, Fax: (559) 487-5906, E-mail: 
[email protected]; or Kathleen

[[Page 10974]]

M. Finn, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 0237, 
Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-
8938, E-mail: [email protected].
    Small businesses may request information on this proceeding by 
contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 
0237, Washington, DC 20250-0237; telephone: (202) 720-2491, Fax: (202) 
720-8938, E-mail: [email protected].

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding include a 
Notice of Hearing issued on May 23, 2006, and published in the May 30, 
2006, issue of the Federal Register (71 FR 30629); a Recommended 
Decision issued on March 29, 2007 and published in the April 6, 2007, 
issue of the Federal Register (72 FR 17037); and a Secretary's Decision 
and Referendum Order issued on August 2, 2007, and published in the 
August 10, 2007, issue of the Federal Register (72 FR 44984).
    This action is governed by the provisions of sections 556 and 557 
of title 5 of the United States Code and is therefore excluded from the 
requirements of Executive Order 12866.

Preliminary Statement

    This final rule was formulated on the record of a public hearing 
held on June 15, 2006, in Mission, Texas. Notice of this hearing was 
issued on May 23, 2006 and published in the Federal Register on May 30, 
2006 (71 FR 30629). The hearing was held to consider the proposed 
amendment of Marketing Agreement No. 143 and Order No. 959 regulating 
the handling of onions grown in South Texas. The hearing was held 
pursuant to the provisions of the Agricultural Marketing Agreement Act 
of 1937, as amended (7 U.S.C. 601 et seq.), hereinafter referred to as 
the ``Act,'' and the applicable rules of practice and procedure 
governing the formulation of marketing agreements and orders (7 CFR 
part 900).
    The Notice of Hearing contained proposals submitted by the 
committee and USDA. Committee proposal number four, pertaining to 
container marking requirements was withdrawn at the hearing, resulting 
in a total of five proposed amendments.
    Upon the basis of evidence introduced at the hearing and the record 
thereof, the Administrator of the Agricultural Marketing Service (AMS) 
on March 29, 2007, filed with the Hearing Clerk, U.S. Department of 
Agriculture, a Recommended Decision and Opportunity to File Written 
Exceptions thereto by May 7, 2007. No exceptions were filed.
    A Secretary's Decision and Referendum Order was issued on August 2, 
2007, directing that a referendum be conducted during the period 
September 10 through 28, 2007, among South Texas onion producers to 
determine whether they favored the proposed amendments to the order. To 
become effective, the amendments had to be approved by at least two-
thirds of those producers voting or by voters representing at least 
two-thirds of the volume of onions represented by voters voting in the 
referendum. Voters voting in the referendum favored two of the five 
proposed amendments.
    The amendments favored by voters and included in this order will:
    1. Add authority to collect interest and late payment charges on 
unpaid handler assessments; and
    2. Require that a continuance referendum be conducted every six 
years to determine industry support for the order.
    Three amendments pertaining to: Establishing supplemental 
assessment rates on specified containers of onions; authority for 
marketing promotion, including paid advertising; and limiting the 
number of consecutive years a member may serve on the committee, failed 
to obtain the requisite level of support needed to pass in referendum.
    USDA also proposed to allow such changes as may be necessary to the 
order so that all of the orders' provisions conform to the effectuated 
amendments. None were deemed necessary.
    The amended marketing agreement was subsequently mailed to all 
South Texas onion handlers in the production area for their approval. 
The marketing agreement was not approved by handlers representing at 
least 50 percent of the volume of onions handled by all handlers during 
the representative period of August 1, 2006, through July 31, 2007.

Small Business Considerations

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing 
Service (AMS) has considered the economic impact of this action on 
small entities. Accordingly, the 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 so that small businesses will not be 
unduly or disproportionately burdened. Small agricultural growers have 
been defined by the Small Business Administration (SBA) (13 CFR 
121.201) as those having annual receipts of less than $750,000. Small 
agricultural service firms are defined as those with annual receipts of 
less than $6,500,000.
    There are approximately 114 growers of onions in the production 
area and approximately 38 handlers subject to regulation under the 
order. For the 2005-06 marketing year, the industry's 38 handlers 
shipped onions produced on 17,694 acres with the average and median 
volume handled being 182,148 and 174,437 fifty-pound equivalents, 
respectively. In terms of production value, total revenues for the 38 
handlers were estimated to be $44.2 million, with average and median 
revenues being $l.16 million and $1.12 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 of the 38 handlers regulated by the order would be 
considered small entities if only their onion revenues are considered. 
However, revenues from other productive enterprises would likely push a 
number of these handlers above the $6,500,000 annual receipt threshold. 
Likewise, all of the 114 producers may be classified as small entities 
based on the SBA definition if only their revenue from onions is 
considered.
    The committee is comprised of 10 growers and 7 handlers, 
representing both large and small entities. Committee meetings are open 
to the public. All members are able to participate in committee 
deliberations and each has an equal vote in committee decisions. When 
the committee met on October 28, 2004, and recommended the proposed 
amendments, all views expressed by the members and others in attendance 
were considered.
    In addition, the hearing to receive evidence on the proposed 
changes was open to the public and all interested parties were invited 
and encouraged to participate and provide their views.
    The amendments are intended to improve the operation and

[[Page 10975]]

administration of the order, and to provide producers an opportunity to 
indicate whether they favor continuance of the order. Record evidence 
indicates that the amendments are intended to benefit onion producers 
and handlers under the order regardless of size.
    The amendment to authorize the committee to charge interest and/or 
late payment fees on assessments not paid within a prescribed time 
period will not have a differential impact on small and large entities. 
According to the record, late fees and interest charges will be based 
on handlers' timeliness of payments, regardless of size. A hearing 
witness familiar with the assessment collection operations under the 
order stated that there is no relationship between a handler's 
performance with regard to timely assessment payment and the size of 
the handler's business operation. Any increased costs will be borne 
only by those handlers that fail to pay their assessments in a timely 
manner. These potential costs will offset any potential advantage 
handlers could gain by not paying their assessments when due and will 
thus promote equity for all handlers. It will provide an incentive to 
pay on time. This proposed amendment is strictly a performance-based 
measure and will thus be applied based on handlers' performance with 
respect to their payment of assessments.
    The proposal to require continuance referenda on a periodic basis 
to ascertain grower support for the order will allow growers to vote on 
whether to continue the operation of the program. This provides a means 
for those whom the order was intended to benefit with an opportunity to 
express their views regarding continuation of the marketing order. USDA 
will conduct the referenda, and thus USDA will bear the majority of any 
associated costs.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impacts of the proposed 
amendments to the order on small entities. The record evidence is that 
while some minimal costs may occur, those costs will be outweighed by 
the benefits expected to accrue to the South Texas onion industry.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this rule. The amendments are designed to 
improve the administration and operation of the order and to provide an 
opportunity to ascertain producer support for the order.

Paperwork Reduction Act

    Current information collection requirements for Part 959 are 
currently approved by the Office of Management and Budget (OMB) under 
OMB number 0581-0178, ``Vegetable and Specialty Crops.'' No changes in 
those requirements as a result of this proceeding are needed. Should 
any changes become necessary, they will be submitted to OMB for 
approval.
    As with other similar marketing order programs, reports and forms 
are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    The AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Civil Justice Reform

    The amendments to Marketing Order 959 stated herein have been 
reviewed under Executive Order 12988, Civil Justice Reform. They are 
not intended to have retroactive effect. They 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 (7 U.S.C. 608c(15)(A)), any handler subject to an order may file 
with the Department 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 USDA 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 
Department's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.

Order Amending the Order Regulating Onions Grown in South Texas

Findings and Determinations

    The findings and determinations set forth hereinafter are 
supplementary and in addition to the findings and determinations 
previously made in connection with the issuance of the order; and all 
of said previous findings and determinations are hereby ratified and 
affirmed, except as such findings and determinations may be in conflict 
with the findings and determinations set forth herein.
    (a) Findings and Determinations Upon the Basis of the Hearing 
Record.
    Pursuant to the provisions of the Agricultural Marketing Agreement 
Act of 1937, as amended (7 U.S.C. 601 et seq.) and the applicable rules 
of practice and procedure effective thereunder (7 CFR part 900), a 
public hearing was held upon the proposed amendments to Marketing Order 
No. 959 (7 CFR part 959), regulating the handling of onions grown in 
South Texas.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof it is found that:
    (1) The marketing order, as amended, and as hereby further amended, 
and all of the terms and conditions thereof, will tend to effectuate 
the declared policy of the Act;
    (2) The marketing order, as amended, and as hereby further amended, 
regulates the handling of onions grown in the production area in the 
same manner as, and is applicable only to persons in the respective 
classes of commercial and industrial activity specified in the 
marketing order upon which hearings have been held;
    (3) The marketing order, as amended, and as hereby further amended, 
is limited in application to the smallest regional production area 
which is practicable, consistent with carrying out the declared policy 
of the Act, and the issuance of several orders applicable to 
subdivision of the production area would not effectively carry out the 
declared policy of the Act;
    (4) The marketing order, as amended, and as hereby further amended, 
prescribes, insofar as practicable, such different terms applicable to 
different parts of the production area as are necessary to give due 
recognition to the differences in the production and marketing of 
onions grown in the production area; and
    (5) All handling of onions grown in the production area is in the 
current of interstate or foreign commerce or directly burdens, 
obstructs, or affects such commerce.
    (b) Determinations. It is hereby determined that:
    (1) Handlers (excluding cooperative associations of producers who 
are not engaged in processing, distributing, or shipping onions covered 
by the order as hereby amended) who, during the period August 1, 2006 
through July 31, 2007, handled 50 percent or more of the volume of such 
onions covered by the order, as hereby amended, have not signed an 
amended marketing agreement; and,

[[Page 10976]]

    (2) The issuance of this amendatory order, further amending the 
aforesaid order, is favored or approved by at least two-thirds of the 
producers who participated in a referendum and who, during the period 
August 1, 2006 through July 31, 2007 (which has been determined to be a 
representative period), have been engaged within the production area in 
the production of onions for market, such producers having also 
produced for market at least two-thirds of the volume of such commodity 
represented in the referendum.
    (3) In the absence of a signed marketing agreement, the issuance of 
this amendatory order is the only practical means pursuant to the 
declared policy of the Act of advancing the interests of producers of 
onions in the production area.

Order Relative to Handling of Onions Grown in South Texas

    It is therefore ordered, That on and after the effective date 
hereof, all handling of onions grown in South Texas shall be in 
conformity to, and in compliance with, the terms and conditions of the 
said order as hereby amended as follows:
    The provisions of proposals contained in Material Issue numbers 2 
and 5 of the proposed order amending the order contained in the 
Recommended Decision issued by the Administrator on March 29, 2007, and 
published in the Federal Register on April 6, 2007, shall be and are 
the terms and provisions of this order amending the order and set forth 
in full herein.

List of Subjects in 7 CFR Part 959

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, Title 7 of Chapter XI of the 
Code of Federal Regulations is amended by amending part 959 as follows:

PART 959--ONIONS GROWN IN SOUTH TEXAS

0
1. The authority citation for 7 CFR part 959 continues to read as 
follows:

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


0
2. Add a new paragraph (e) to Sec.  959.42 to read as follows:


Sec.  959.42  Assessments.

* * * * *
    (e) If a handler does not pay assessments within the time 
prescribed by the committee, the assessment may be increased by a late 
payment charge and/or an interest rate charge at amounts prescribed by 
the committee with approval of the Secretary.

0
3. In Sec.  959.84, redesignate paragraph (d) as paragraph (e) and add 
a new paragraph (d) to read as follows:


Sec.  959.84  Termination.

* * * * *
    (d) The Secretary shall conduct a referendum within six years after 
the effective date of this paragraph and every sixth year thereafter to 
ascertain whether continuance is favored by producers. The Secretary 
would consider termination of this part if less than two-thirds of the 
growers voting in the referendum and growers of less than two-thirds of 
the volume of onions represented in the referendum favor continuance.
* * * * *

    Dated: February 26, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-3944 Filed 2-28-08; 8:45 am]
BILLING CODE 3410-02-P