[Federal Register Volume 85, Number 54 (Thursday, March 19, 2020)]
[Proposed Rules]
[Pages 15743-15745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05512]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Doc. No. AMS-SC-20-0019; SC20-959-1 PR]


Onions Grown in South Texas; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
South Texas Onion Committee (Committee) to decrease the assessment rate 
established for the 2019-20 and subsequent fiscal periods. The proposed 
assessment rate would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by April 20, 2020.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or internet: http://www.regulations.gov. Comments should reference the document 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, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the identity of the individuals 
or entities submitting the comments will be made public on the internet 
at the address provided above.

FOR FURTHER INFORMATION CONTACT: Abigail Campos, 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 proposed 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, (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 operating within the area of 
production.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This proposed 
rule falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed 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'[thinsp]'' (February 2, 2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the 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 
would be applicable to all assessable onions for the 2019-20 fiscal 
year, 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 proposed rule would decrease the assessment rate from $0.065, 
the rate that was established for the 2017-18 and subsequent fiscal 
periods, to $0.05 per 50-pound equivalent of onions handled for the 
2019-20 and subsequent fiscal years.
    The 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 are 
familiar with the Committee's needs and with the costs of 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 2017-18 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal

[[Page 15744]]

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.
    On November 19, 2019, the Committee unanimously recommended 2019-20 
expenditures of $174,807 and an assessment rate of $0.05 per 50-pound 
equivalent of onions. In comparison, last year's budgeted expenditures 
were $169,807. The proposed assessment rate of $0.05 is $0.015 lower 
than the rate currently in effect. The Committee recommended decreasing 
the assessment rate to help reduce the Committee's reserve fund and 
reduce the assessment burden on handlers.
    The major expenditures recommended by the Committee for the 2019-20 
year include $69,992 for management and administration, $50,000 for 
compliance, and $20,000 for research. Budgeted expenses for these items 
in 2018-19 were $69,992, $50,000, and $20,000, respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses, expected shipments of 3,960,000 50-
pound bags, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments calculated at $198,000 
(3.96 million multiplied by $0.05), along with interest income and 
funds from the Committee's authorized reserve, would be adequate to 
cover budgeted expenses of $174,807. Funds in the reserve (currently 
$201,844) would be kept within the maximum permitted by the Order 
(approximately two fiscal period's expenses as stated in Sec.  959.43) 
at the end of the 2019-20 fiscal period.
    The assessment rate proposed in this rule would continue in effect 
indefinitely unless modified, suspended, or terminated by USDA upon 
recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate would be 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA 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 2019-20 budget and those 
for subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

Initial 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 proposed 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 
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 (SBA) as those having annual receipts less than 
$1,000,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $30,000,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the weighted producer price for South Texas onions during the 2018-19 
season was around $9.09 per 50-pound equivalent. The Committee reports 
total onion shipments were approximately 4.2 million 50-pound 
equivalents. Using the weighted average price and shipment information, 
the total 2018-19 crop value is estimated at $38.2 million. Dividing 
the crop value by the estimated number of producers (60) yields an 
estimated average receipt per producer of $636,700, so the majority of 
producers would have annual receipts of less than $1,000,000.
    The average handler price for South Texas onions during the 2018-19 
season was approximately $11.00 per 50-pound equivalent. Using the 
price average and shipment information, the total 2018-19 handler crop 
value is estimated at $46.2 million. Dividing this figure by the number 
of handlers (30) yields an estimated average annual handler receipts of 
$1.54 million, which is below the SBA threshold for small agricultural 
service firms. Thus, the majority of onion producers and handlers may 
be classified as small entities.
    This proposal would decrease the assessment rate collected from 
handlers for the 2019-20 and subsequent fiscal periods from $0.065 to 
$0.05 per 50-pound equivalent of Texas onions. The Committee 
unanimously recommended 2019-20 expenditures of $174,807 and an 
assessment rate of $0.05 per 50-pound equivalent. The proposed 
assessment rate of $0.05 is $0.015 lower than the 2017-18 rate. The 
quantity of assessable onions for the 2019-20 fiscal period is 
estimated at 3.96 million 50-pound equivalents. Thus, the $0.015 rate 
should provide $198,000 in assessment income (3.96 million multiplied 
by $0.05). Income derived from handler assessments, along with interest 
income and funds from the Committee's authorized reserve, would be 
adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2019-20 
year include $69,992 for management and administration, $50,000 for 
compliance, and $20,000 for research. Budgeted expenses for these items 
in 2018-19 were $69,992, $50,000, and $20,000, respectively.
    The Committee recommended decreasing the assessment rate to reduce 
the assessment burden on handlers and utilize funds from the authorized 
reserve to help cover Committee expenses.
    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 this group, based upon the relative value of various 
activities to the South Texas onion industry. Based on the estimated 
shipments, the recommended assessment rate of $0.05 would provide 
$198,000 in assessment income. The Committee determined that assessment 
revenue, along with interest income and funds from authorized reserves 
would be adequate to cover budgeted expenses for the 2019-20 fiscal 
period.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the average 
producer price for the 2019-20 season should be approximately $10.15 
per 50-pound equivalent of Texas onions. Therefore, the estimated 
assessment revenue for the 2019-20 fiscal period as a percentage of 
total producer revenue would be about 0.49 percent.
    This proposed rule would 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

[[Page 15745]]

assessment rate reduces the burden on handlers and may also reduce the 
burden on producers.
    The Committee's meeting was widely publicized throughout the South 
Texas onion industry. All interested persons were invited to attend the 
meeting and participate in Committee deliberations on all issues. Like 
all Committee meetings, the November 19, 2019, meeting was a public 
meeting and all entities, both large and small, were able to express 
views on this issue. Interested persons are invited to submit comments 
on this proposed rule, including the regulatory and informational 
collection impacts of this action on small businesses.
    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 the OMB and assigned OMB No. 0581-0178 Vegetable 
and Specialty Crops. No changes in those requirements would be 
necessary as a result of this proposed rule. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would not impose any 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.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.
    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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed 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 
proposed to be 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.

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


Sec.  959.237  Assessment rate.

    On and after August 1, 2019, an assessment rate of $0.05 per 50-
pound equivalent is established for South Texas onions.

    Dated: March 12, 2020.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-05512 Filed 3-18-20; 8:45 am]
 BILLING CODE 3410-02-P