Onions Grown in South Texas; Increased Expenses and Establishment of Assessment Rate

DEPARTMENT OF AGRICULTURE

7 CFR Part 959

[Docket No. FV95-959-2IFR; Amendment 1]

Onions Grown in South Texas; Increased Expenses and Establishment

of Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Amended interim final rule with request for comments.

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SUMMARY: This interim final rule amends a previous interim final rule

which authorized administrative expenses for the South Texas Onion

Committee (Committee) under M.O. No. 959. This interim final rule

increases the level of authorized expenses and establishes an

assessment rate to generate funds to pay those expenses. Authorization

of this increased budget enables the Committee to incur additional

expenses that are reasonable and necessary to administer the program.

Funds to administer this program are derived from assessments on

handlers.

DATES: Effective August 1, 1995, through July 31, 1996. Comments

received by January 11, 1996 will be considered prior to issuance of a

final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this action. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456,

room 2523-S, Washington, DC 20090-6456, FAX 202-720-5698. Comments

should reference the docket 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.

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, hereinafter

referred to as the ``order.'' 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 Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This amended interim final 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 1995-96 fiscal period,

which began August 1, 1995, and ends July 31, 1996. This interim final

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

[[Page 63611]]

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 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 89 producers of South Texas onions under

this marketing order, and approximately 35 handlers. Since the interim

final rule was issued, information regarding an increase in the number

of producers from approximately 70 to 89 was received. 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 $5,000,000. The majority of

South Texas onion producers and handlers may be classified as small

entities.

The budget of expenses for the 1995-96 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

of Agriculture 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 $239,250 for personnel,

office, and compliance expenses were recommended in a mail vote. 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 $239,250 were published in the Federal

Register as an interim final rule August 17, 1995 (60 FR 42774). That

interim final rule added Sec. 959.236, authorizing expenses for the

Committee, and provided that interested persons could file comments

through September 18, 1995. No comments were filed.

The Committee subsequently met on November 14, 1995, and

unanimously recommended an increase of $1,000 for insurance in the

recently approved 1995-96 budget. The Committee also unanimously

recommended $246,000 for promotion and $99,000 for onion breeding

research. Budget items for 1995-96 which have increased compared to

those budgeted for 1994-95 (in parentheses) are: Manager's salary,

$19,094 ($15,172), office salaries, $24,000 ($22,000), payroll taxes,

$4,000 ($3,100), insurance, $8,000 ($6,250), rent and utilities, $6,500

($5,000), supplies, $2,000 ($1,500), postage, $1,500 ($1,000),

telephone and telegraph, $4,000 ($2,500), furniture and fixtures,

$2,000 ($1,000), equipment rental and maintenance, $3,500 ($2,500),

contingencies, $6,706 ($3,978), manager travel, $5,000 ($3,000),

Canadian onion promotion, $5,000 ($4,450), $226,000 for the Thacker

Group for promotion ($200,000), onion breeding research, $99,000

($88,028), and $3,750 for deferred compensation (manager's retirement),

and $5,000 for miscellaneous promotion expenses, which were not line

item expenses last year. All other items are budgeted at last year's

amounts.

The initial 1995-96 budget, published on August 17, 1995, did not

establish an assessment rate. Therefore, by a vote of 11 to 1, the

Committee also recommended an assessment rate of $0.10 per 50-pound

container or equivalent of onions, $0.06 more than last year's

assessment rate. The no vote came from a grower who thought increasing

the assessment rate from $0.04 to $0.10 cents was too great an

increase. This rate, when applied to anticipated shipments of

approximately 6,000,000 million 50-pound containers or equivalents,

will yield $600,000 in assessment income, which, will be adequate to

cover budgeted expenses. Funds in the reserve as of October 31, 1995,

were $408,314, which is within the maximum permitted by the order of

two fiscal periods' expenses.

While this action 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 from the operation of the

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

that this action 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.

Pursuant to 5 U.S.C. 553, it is also found and determined upon good

cause that it is impracticable, unnecessary, and contrary to the public

interest to give preliminary notice prior to putting this rule into

effect and that good cause exists for not postponing the effective date

of this action until 30 days after publication in the Federal Register

because: (1) The Committee needs to have sufficient funds to pay its

expenses which are incurred on a continuous basis; (2) the fiscal

period began on August 1, 1995, and the marketing order requires that

the rate of assessment for the fiscal period apply to all assessable

onions handled during the fiscal period; (3) handlers are aware of this

action which was recommended by the Committee at a public meeting and

is similar to that taken for the 1994-95 fiscal period; and (4) this

interim final rule provides a 30-day comment period, and all comments

timely received will be considered prior to finalization of this

action.

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:

[[Page 63612]]

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.

2. Section 959.236 is revised to read as follows:

Note: This section will not appear in the Code of Federal

Regulations.

Sec. 959.236 Expenses and assessment rate.

Expenses of $585,250 by the South Texas Onion Committee are

authorized and an assessment rate of $0.10 per 50-pound container or

equivalent of onions is established for the fiscal period ending July

31, 1996. Unexpended funds may be carried over as a reserve.

Dated: December 6, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95-30232 Filed 12-11-95; 8:45 am]

BILLING CODE 3410-02-P