Onions Grown in South Texas; Assessment Rate

DEPARTMENT OF AGRICULTURE

7 CFR Part 959

[Docket No. FV96-959-1 FIR]

Onions Grown in South Texas; 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 interim final rule

establishing 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.

EFFECTIVE DATE: August 1, 1996.

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 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 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

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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

businesses 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 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.

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.

An interim final rule regarding this action was published in the

January 7, 1997, issue of the Federal Register (62 FR 916). That rule

provided for a 30-day comment period. No comments were received.

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.

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. 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 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 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) an interim final rule was published on this action and

provided for a 30-day comment period; no comments were received.

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

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

was published at 62 FR 916 on January 7, 1997, is adopted as a final

rule without change.

Dated: March 3, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97-5591 Filed 3-6-97; 8:45 am]

BILLING CODE 3410-02-P