South Texas Onions; Increased Expenses and Establishment of Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. FV93-959-1FIR]

South Texas Onions; Increased Expenses and Establishment of

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, the provisions of an amended interim final

rule that increased the level of authorized expenses and established an

assessment rate that generated funds to pay those expenses.

Authorization of this budget enables the South Texas Onion Committee

(Committee) to incur expenses that are reasonable and necessary to

administer the program. Funds to administer this program are derived

from assessments on handlers.

EFFECTIVE DATE: August 1, 1993, through July 31, 1994.

FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-

9918, or Belinda G. Garza, McAllen Marketing Field Office, Fruit and

Vegetable Division, AMS, USDA, 1313 East Hackberry, McAllen, TX 78501,

telephone 210-682-2833.

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. 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 12778, Civil

Justice Reform. Under the marketing order provisions now in effect,

South Texas onions are subject to assessments. It is intended that the

assessment rate as issued herein will be applicable to all assessable

onions handled during the 1993-94 fiscal period, which began August 1,

1993, and ends July 31, 1994. 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 requesting 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 in equity to review the

Secretary's ruling on the petition, provided a bill in equity is filed

not later than 20 days after the date of the entry of the ruling.

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (RFA), the Administrator of the Agricultural Marketing

Service (AMS) has considered the economic impact of this rule on small

entities.

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 97 producers of South Texas onions under

this marketing order, and approximately 38 handlers. Small agricultural

producers have been defined by the Small Business Administration (13

CFR 121.601) as those having annual receipts of less than $500,000, and

small agricultural service firms are defined as those whose annual

receipts are less than $3,500,000. The majority of South Texas onion

producers and handlers may be classified as small entities.

The budget of expenses for the 1993-94 fiscal period was prepared

by the South Texas Onion Committee, the agency responsible for local

administration of the marketing order, and submitted to the Department

for approval. 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 of goods and services in their local area and are thus

in a position to formulate an appropriate budget. The budget was

formulated and discussed in a public meeting. Thus, all directly

affected persons have had an opportunity to participate and provide

input.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of South Texas

onions. Because that rate will be applied to actual shipments, it must

be established at a rate that will provide sufficient income to pay the

Committee's expenses.

Committee administrative expenses of $80,000 for personnel, office,

and compliance expenses were recommended in a mail vote completed

August 4, 1993. The assessment rate and funding for the research and

promotion projects were to be recommended at a later Committee meeting.

The Committee administrative expenses of $80,000 were published in the

Federal Register as an interim final rule September 28, 1993 (58 FR

50509). That interim final rule added Sec. 959.234, authorizing

expenses for the Committee, and provided that interested persons could

file comments through October 28, 1993. No comments were filed.

The Committee subsequently met on November 9, 1993, and unanimously

recommended increases of $2,500 for personnel expenses and $125,000 for

compliance activities in the recently approved 1993-94 budget. The

compliance increase will provide for funds to operate road guard

stations surrounding the production area. The Committee also

unanimously recommended $210,000 in market development activities and

$105,600 in production research. These expenditures represent increases

over last year's budget of $65,000 for market development and $11,412

for production research. Under this amended budget, expense items for

the 1993-94 fiscal period are as follows: $37,472 for personnel,

$29,028 for office expenses, $141,000 for compliance activities,

$210,000 for market development, and $105,600 for production research.

The initial 1993-94 budget, published on September 28, 1993, did

not establish an assessment rate. Therefore, the Committee also

unanimously recommended an assessment rate of $0.10 per 50-pound

container or equivalent of onions, $0.03 more than last year's

assessment rate. This rate, when applied to anticipated shipments of

approximately 5 million 50-pound containers or equivalents, will yield

$500,000 in assessment income, which, along with $23,100 from the

reserve, will be adequate to cover budgeted expenses. Funds in the

reserve as of December 31, 1993, were $346,415, which is within the

maximum permitted by the order of two fiscal periods' expenses.

An amended interim final rule was published in the Federal Register

on January 11, 1994 (59 FR 1452). That interim final rule amended

Sec. 959.234 to increase the level of authorized expenses and establish

an assessment rate for the Committee. That rule provided that

interested persons could file comments through February 10, 1994. No

comments were received.

While this rule will impose some additional costs on handlers, the

costs are in the form of uniform assessments on handlers. Some of the

additional costs may be passed on to producers. However, these costs

will be offset by the benefits derived by the operation of the

marketing order. Therefore, the Administrator of the AMS has determined

that this rule will not have a significant economic impact on a

substantial number of small entities.

After consideration of all relevant matter presented, including the

information and recommendations 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.

It is further found that good cause exists for not postponing the

effective date of this rule until 30 days after publication in the

Federal Register (5 U.S.C. 553) because the Committee needs to have

sufficient funds to pay its expenses which are incurred on a continuous

basis. The 1993-94 fiscal period began on August 1, 1993. The marketing

order requires that the rate of assessment for the fiscal period apply

to all assessable onions handled during the fiscal period. In addition,

handlers are aware of this rule which was recommended by the Committee

at a public meeting and published in the Federal Register as an amended

interim final 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:

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.

Accordingly, the amended interim final rule revising Sec. 959.234

which was published at 59 FR 1452 on January 11, 1994, is adopted as a

final rule without change.

Dated: March 8, 1994.

Martha B. Ransom,

Acting Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-6139 Filed 3-15-94; 8:45 am]

BILLING CODE 3410-02-P