Onions Grown in South Texas; Assessment Rate

DEPARTMENT OF AGRICULTURE

7 CFR Part 959

[Docket No. FV96-959-1 IFR]

Onions Grown in South Texas; Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule establishes an assessment rate for the

South Texas Onion Committee (Committee) under Marketing Order No. 959

for the 1996-97 and subsequent fiscal periods. The Committee is

responsible for local administration of the marketing order which

regulates the handling of onions grown in South Texas. Authorization to

assess Texas onion handlers enables the Committee to incur expenses

that are reasonable and necessary to administer the program.

DATES: Effective on August 1, 1996. Comments received by February 6,

1997, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent in triplicate to the Docket

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

2525-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: Belinda G. Garza, Marketing

Specialist, McAllen Marketing Field Office, Fruit and Vegetable

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

210-682-2833, FAX 210-682-5942, or Martha Sue Clark, Program Assistant,

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090- 6456,

telephone 202-720-9918; FAX 202-720-5698. Small businesses may request

information on compliance with this regulation by contacting: Jay

Guerber, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; telephone 202-720-2491; FAX 202-720-5698.

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

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

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. Under the marketing order now in effect, South Texas

onion handlers are subject to assessments. It is intended that the

assessment rate as issued herein will be applicable to all assessable

onions beginning August 1, 1996, and continuing until amended,

suspended, or terminated. 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. Such handler is afforded the opportunity for a hearing 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 the

Secretary's ruling on the petition, provided an action is filed not

later than 20 days after the date of the entry of the ruling.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), 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 action to the scale of

businesses subject to such action 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 48 producers of South Texas onions in the

production area and approximately 36 handlers subject to regulation

under the marketing order. 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.

Texas onion producers and handlers may be classified as small

entities.

The Texas onion marketing order provides authority for the

Committee, with the approval of the Department, to formulate an annual

budget of expenses and collect assessments from handlers to administer

the program. 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 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.

The Committee, in a telephone vote, unanimously recommended 1996-97

administrative expenses of $100,000 for personnel, office, and the

travel portion of the compliance budget. These expenses were approved

in October 1996. The assessment rate and funding for research and

promotion projects, and the road guard station maintenance portion of

the compliance budget were to be recommended at a later Committee

meeting.

The Committee subsequently met on November 19, 1996, and

unanimously recommended 1996-97 expenditures of $448,000 and an

assessment rate of $0.07 per 50-pound container or equivalent of

onions. In comparison, last year's budgeted expenditures were $585,250.

The assessment rate of $0.07 is $0.03 lower than last year's

established rate. Major expenditures recommended by the Committee for

the 1996-97 fiscal period include $80,000 for personnel and

administrative expenses, $120,000 for compliance, $150,000 for

promotion, and $98,000 for onion breeding research. Budgeted expenses

for these items in 1995-96 were $96,250, $144,000, $246,000, and

$99,000, respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of South Texas

onions. Onion shipments for the year are estimated at 5 million 50-

pound equivalents, which should provide $350,000 in assessment income.

Income derived from handler assessments, along with interest income and

funds from the Committee's authorized reserve, will be adequate to

cover budgeted expenses. Funds in the reserve will be kept within the

maximum permitted by the order.

This action will reduce the assessment obligation imposed on

handlers. While this rule will impose some additional costs on

handlers, the costs are in the form of uniform assessments on all

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 AMS has determined

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

substantial number of small entities. Interested persons are invited to

submit information on the regulatory and informational impacts of this

action on small businesses.

The assessment rate established in this rule will continue in

effect indefinitely unless modified, suspended, or terminated by the

Secretary upon recommendation and information submitted by the

Committee or other available information.

Although this assessment rate is 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 the

Department. Committee meetings are open to the public and interested

persons may express their views at these meetings. The Department will

evaluate Committee recommendations and other available information to

determine whether modification of the assessment rate is needed.

Further, rulemaking will be undertaken as necessary. The Committee's

1996-97 budget and those for subsequent fiscal periods will be reviewed

and, as appropriate, approved by the Department.

After consideration of all relevant material presented, including

the information and recommendation 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 rule until 30 days after publication in the Federal

Register because: (1) The Committee needs to

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

continuous basis; (2) the 1996-97 fiscal period began on August 1,

1996, and the marketing order requires that the rate of assessment for

each fiscal period apply to all assessable onions handled during such

fiscal period; (3) handlers are aware of this action which was

unanimously recommended by the Committee at a public meeting and is

similar to other assessment rate actions issued in past years; 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 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.

2. A new subpart titled ``Assessment Rates'' consisting of a new

Sec. 959.237 and a new subpart heading titled ``Handling Regulations''

are added immediately preceding Sec. 959.322, to read as follows:

Note: This section will appear in the Code of Federal

Regulations.

Subpart--Assessment Rates

Sec. 959.237 Assessment rate.

On and after August 1, 1996, an assessment rate of $0.07 per 50-

pound container or equivalent is established for South Texas onions.

Subpart--Handling Regulations

* * * * *

Dated: December 31, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97-282 Filed 1-6- 97; 8:45 am]

BILLING CODE 3410-02-P