South Texas Onions; Increased Expenses and Establishment of Assessment Rate

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 under

Marketing Order No. 959 for the 1995-96 fiscal period. 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, 1995, through July 31, 1996.

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 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 1995-96 fiscal period, which began August 1,

1995, and ends July 31, 1996. 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 request 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 89 producers of South Texas onions under

this marketing order, and approximately 35 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 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

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 $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

[[Page 7408]]

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 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 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 December 31, 1995, were $408,314,

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 12, 1995 (60 FR 63610). That interim final rule amended

Sec. 959.236 to increase the level of authorized expenses to $585,250

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

equivalent of onions for the Committee. That rule provided that

interested persons could file comments through January 11, 1996. No

comments were received.

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.

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

effective date of this action 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 1995-96 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.

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.

List of Subjects in 7 CFR Part 959

Marketing agreements, Onions, Reporting and recordkeeping

requirements.

PART 959--ONIONS GROWN IN SOUTH TEXAS

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

was published at (60 FR 63610) on December 12, 1995, is adopted as a

final rule without change.

Dated: February 22, 1996.

Martha B. Ransom,

Acting Deputy Director, Fruit and Vegetable Division.

[FR Doc. 96-4502 Filed 2-27-96; 8:45 am]

BILLING CODE 3410-02-P