[Federal Register Volume 83, Number 4 (Friday, January 5, 2018)]
[Rules and Regulations]
[Pages 592-594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28504]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Doc. No. AMS-SC-17-0040; SC17-959-1 FR]


Onions Grown in South Texas; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the South Texas 
Onion Committee (Committee) to increase the assessment rate established 
for the 2017-18 and subsequent fiscal periods from $0.05 to $0.065 per 
50-pound equivalent of onions handled under the Marketing Order 
(Order). The assessment rate will remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Effective February 5, 2018.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202)720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This rule is issued under Marketing 
Order No. 959, as amended (7 CFR part 959), regulating the handling of 
onions grown in South Texas. Part 959 (hereinafter referred to as the 
``Order'') is effective under the Agricultural Marketing Agreement Act 
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.'' The Committee locally administers the Order and is comprised 
of producers and handlers of onions operating within the area of 
production.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this rule does not meet the definition of a 
significant regulatory action, it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).
    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 on August 1, 2017, and continue until amended, 
suspended, or terminated.
    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 USDA 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, 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 USDA'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 increases the assessment rate established for the 2017-18 
and subsequent fiscal periods from $0.05 to $0.065 per 50-pound 
equivalent of onions handled.
    The South Texas Onion Marketing Order provides authority for the 
Committee, with the approval of USDA, 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 2015-16 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on June 7, 2017, and unanimously recommended 
2017-18 expenditures of $149,807, the same as budgeted last fiscal 
year, and an assessment rate of $0.065 per 50-pound equivalent of 
onions. The assessment rate of $0.065 is $0.015 higher than the rate 
currently in effect. The Committee recommended the increase so 
assessments would be sufficient to cover the Committee's anticipated 
expenditures while providing additional funds to help replenish the 
Committee's reserve fund, which has been depleted due to declines in 
production. With the Committee's recommended $0.015 increase and 
estimated shipments of approximately three million 50-pound 
equivalents, assessment income should be approximately $195,000.
    The major expenditures recommended by the Committee for the 2017-18 
fiscal year include $50,000 for compliance, $37,050 for administrative, 
and $32,942 for management costs. Budgeted expenses for these items 
were the same in 2016-17.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments of South Texas 
onions, and the level of funds in reserve. As mentioned earlier, onion 
shipments for the year are estimated at three million 50-pound 
equivalents, which should provide $195,000 in assessment income. Income 
derived from handler assessments would be adequate to cover budgeted 
expenses. The Committee currently has no money in reserves.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Committee or other 
available information.

[[Page 593]]

    Although this assessment rate will be in effect 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 USDA. 
Committee meetings are open to the public, and interested persons may 
express their views at these meetings. USDA 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 2017-18 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

Final Regulatory Flexibility Analysis

    Pursuant to 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 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 
businesses 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.
    There are approximately 60 producers of onions in the production 
area and approximately 30 handlers subject to regulation under the 
Marketing Order. Small agricultural producers are defined by the Small 
Business Administration as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,500,000 (13 CFR 121.201).
    Based on information from the National Agricultural Statistics 
Service, the weighted grower price for South Texas onions during the 
2015-16 season was approximately $12.30 per 50-pound equivalent. 
According to Committee data, total shipments were approximately three 
million 50-pound equivalents. Using the weighted average price and 
shipment information, and assuming a normal distribution, the majority 
of producers would have annual receipts of less than $750,000. The 
average handler price for South Texas onions during the 2015-16 season 
was approximately $14.05 per 50-pound equivalent. Using the average 
price and shipment information, the number of handlers, and assuming a 
normal distribution, the majority of handlers would have average annual 
receipts of less than $7,500,000. Thus, the majority of South Texas 
onion producers and handlers may be classified as small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2017-18 and subsequent 
fiscal periods from $0.05 to $0.065 per 50-pound equivalent of Texas 
onions. The Committee unanimously recommended 2017-18 expenditures of 
$149,807 and an assessment rate of $0.065 per 50-pound equivalent. The 
assessment rate of $0.065 is $0.015 higher than the 2016-17 rate. The 
quantity of assessable onions for the 2017-18 fiscal period is 
estimated at three million 50-pound equivalents. Thus, the $0.065 rate 
should provide $195,000 in assessment income and be adequate to meet 
this year's expenses.
    The major expenditures recommended by the Committee for the 2017-18 
year include $50,000 for compliance, $37,050 for administrative, and 
$32,942 for management. Budgeted expenses for these items were the same 
in 2016-17.
    With the 2017-18 crop estimated to be three million 50-pound 
equivalents, the current assessment rate would be sufficient to cover 
the Committee's anticipated expenditures but would not provide any 
additional monies to help replenish the Committee's reserve fund, which 
has been depleted due to declines in production. The Committee 
considered the proposed expenses and the state of the reserve fund and 
recommended the assessment increase. With the Committee's recommended 
$0.015 increase, assessment income should be approximately $195,000 and 
be adequate to cover anticipated expenses and add funds to the 
authorized reserve.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources, such as the Committee's 
Budget and Personnel Committee. Alternative expenditure levels were 
discussed by these groups, based upon the relative value of various 
activities to the South Texas onion industry. The Committee ultimately 
determined that 2017-18 expenditures of $149,807 were appropriate, and 
the recommended assessment rate would generate sufficient revenue to 
meet its expenses.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 2017-18 season could be approximately $12.00 per 50-pound 
equivalent of Texas onions. Therefore, the estimated assessment revenue 
for the 2017-18 fiscal period as a percentage of total grower revenue 
could be about 0.5 percent.
    This action increases the assessment obligation imposed on 
handlers. 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 
are offset by the benefits derived by the operation of the Marketing 
Order. 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 June 7, 
2017, meeting was a public meeting, and all entities, both large and 
small, were able to express views on this issue.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection requirements have been 
previously approved by OMB and assigned OMB No. 0581-0178 (Vegetable 
and Specialty Crops). No changes in those requirements as a result of 
this action are necessary. Should any changes become necessary, they 
would be submitted to OMB for approval.
    This rule 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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
final rule.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on September 19, 2017 (82 FR 43713). Copies of the proposed 
rule were also mailed or sent via facsimile to all South Texas onion 
handlers. Finally, the proposal was made available through the internet 
by USDA and the Office of the Federal Register. A 30-day

[[Page 594]]

comment period ending October 19, 2017, was provided for interested 
persons to respond to the proposal.
    Two comments were received in support of the rule. One commenter 
stated the increase would help the fair trade movement. The other 
commenter stated the increase in the assessment rate was reasonable to 
cover the increased costs of goods and services. Accordingly, no 
changes will be made to the rule as proposed, based on the comments 
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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower 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.

    For the reasons set forth in the preamble, 7 CFR part 959 is 
amended 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.

Subpart A--[Amended]

0
2. Designate the subpart labeled ``Order Regulating Handling'' as 
subpart A.

Subpart B--Administrative Provisions

0
3. Designate the subpart labeled ``Rules and Regulations'' as subpart B 
and revise the heading as shown above.

Subparts ``Assessment Rates'' and ``Handling Regulations''--
[Amended]

0
4. Remove the subpart headings ``Assessment Rates'' and ``Handling 
Regulations''.

0
5. Transfer Sec. Sec.  959.237 and 959.322 to subpart B.

0
6. Section 959.237 is revised to read as follows:


Sec.  959.237  Assessment rate.

    On and after August 1, 2017, an assessment rate of $0.065 per 50-
pound equivalent is established for South Texas onions.

    Dated: December 29, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-28504 Filed 1-4-18; 8:45 am]
 BILLING CODE 3410-02-P