South Texas Onions; Increased Expenses and Establishment of Assessment Rate

SUMMARY: The Department of Agriculture (Department) is adopting as a

final rule, with appropriate changes, 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. This final rule further increases authorized 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, 1994, through July 31, 1995.

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. This 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 1994-95 fiscal period, which began August 1,

1994, and ends July 31, 1995. 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 47 producers of South Texas onions under

this marketing order, and approximately 34 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 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 1994-95 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 areas 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. 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 August 12, 1994 (59 FR 41382). That interim final

rule added Sec. 959.235, authorizing expenses for the Committee, and

provided that interested persons could file comments through September

12, 1994. No comments were filed.

The Committee subsequently met on November 8, 1994, and unanimously

recommended increases of $8,900 for personnel expenses, $2,300 for

office expenses, and $126,000 for compliance activities in the recently

approved 1994-95 budget. The compliance increase provided funds to

operate road [[Page 10480]] guard stations surrounding the production

area. The Committee also unanimously recommended $164,450 in market

development activities and $88,028 in production research. Budget items

for 1994-95 which increased compared to those budgeted for 1993-94 (in

parentheses) were: Office salaries, $22,000 ($15,600), insurance,

$6,250 ($5,250), accounting and audit, $2,600 ($2,300), rent and

utilities, $5,000 ($4,000), field travel, $6,000 ($5,000), onion

breeding research, $88,028 ($88,000), and $4,450 for Canadian onion

promotion for which no funding was budgeted last year. Items which

decreased compared to the amount budgeted for 1993-94 (in parentheses)

were: Market development program, $150,000 ($200,000) and ($7,000) for

screening for resistance and tolerance to purple blotch, ($2,000) for

leaf wetness, ($2,600) for variety evaluation, ($4,000) for thrips

monitoring and control, and ($2,000) for the Integrated Pest Management

program, for which no funding was budgeted this year. All other items

were budgeted at last year's amounts.

The initial 1994-95 budget, published on August 12, 1994, did not

establish an assessment rate. Therefore, the Committee also unanimously

recommended an assessment rate of $0.04 per 50-pound container or

equivalent of onions, $0.06 less than last year's assessment rate. This

rate, when applied to anticipated shipments of approximately 5 million

50-pound containers or equivalents, will yield $200,000 in assessment

income, which, along with $269,678 from the reserve, will be adequate

to cover budgeted expenses. Funds in the reserve as of December 31,

1994, were $607,767, 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 December 15, 1994 (59 FR 64557). That interim final rule amended

Sec. 959.235 to increase the level of authorized expenses to $469,678

and establish an assessment rate of $0.04 per 50-pound container or

equivalent of onions for the Committee. That rule provided that

interested persons could file comments through January 17, 1995. No

comments were received.

The Committee, in a telephone vote completed January 16, 1995,

unanimously recommended an increase of $50,000 in the funding for the

market development program, increasing expenditures from $150,000 to

$200,000. This increase is necessary to cover additional expenses that

will be incurred in conducting the program, and will result in total

promotion expenses of $214,250 and a total budget of $519,678. There

are adequate funds in the Committee's reserve to cover this additional

expenditure, so no increase in the assessment rate was recommended.

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 the Committee needs to have sufficient funds to pay its

expenses which are incurred on a continuous basis. The 1994-95 fiscal

period began on August 1, 1994, and 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 unanimously recommended by the Committee

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

interim final rule. No comments were received concerning that amended

interim final rule, which is being adopted as a final rule, with

appropriate changes.

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:

Accordingly, the interim final rule amending 7 CFR part 959 which

was published at (59 FR 64557) on December 15, 1994, is adopted as a

final rule with the following change:

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 959.235 is revised to read as follows:

Sec. 959.235 Expenses and assessment rate.

Expenses of $519,678 by the South Texas Onion Committee are

authorized and an assessment rate of $0.04 per 50-pound container or

equivalent of onions is established for the fiscal period ending July

31, 1995. Unexpended funds may be carried over as a reserve.

Dated: February 21, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95-4739 Filed 2-24-95; 8:45 am]

BILLING CODE 3410-02-W