[Federal Register: December 26, 2002 (Volume 67, Number 248)]
[Proposed Rules]
[Page 78751-78753]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26de02-22]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 78751]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[Docket No. FV03-959-1 PR]
Onions Grown in South Texas; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the South Texas Onion Committee (Committee) for the 2002-03 and
subsequent fiscal periods from $0.05 to $0.085 per 50-pound equivalent
of onions handled. The Committee locally administers the marketing
order which regulates the handling of onions grown in South Texas.
Authorization to assess onion handlers enables the Committee o incur
expenses that are reasonable and necessary to administer the program.
The fiscal period began August 1 and ends July 31. The assessment rate
would remain in effect indefinitely unless modified, suspended, or
terminated.
DATES: Comments must be received by January 27, 2003.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, room 2525-S, PO Box 96456, Washington, DC 20090-6456; Fax:
(202) 720-8938, or E-mail: moab.docketclerk@usda.gov. 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, or can be
viewed at: http://www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager,
McAllen Marketing Field Office, Fruit and Vegetable Programs, AMS,
USDA, 1313 E. Hackberry, McAllen, Texas 78501; telephone: (956) 682-
2833, Fax: (956) 682-5942; or George Kelhart, Technical Advisor,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456;
telephone: (202) 720-2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)
720-8938, or E-mail: Jay.Guerber@usda.gov.
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 (USDA) 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. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as proposed herein would be applicable to all
assessable onions beginning on August 1, 2002, and continue 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 USDA 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 USDA 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 to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule would increase the assessment rate established for the
Committee for the 2002-03 and subsequent fiscal periods from $0.05 to
$0.085 per 50-pound equivalent of onions.
The South Texas onion marketing order provides authority for the
Committee, with the approval of USDA, 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 for 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,
where all persons directly affected have an opportunity to participate
and provide input.
For the 2001-02 and subsequent fiscal periods, the Committee
recommended and USDA approved, an assessment rate that would continue
in effect from fiscal period to fiscal period, unless modified,
suspended, or terminated by USDA upon recommendation and information
submitted by the Committee or other information available to USDA.
The Committee met on July 11, 2002, and unanimously recommended
2002-03 expenses of $127,002 for personnel, office, compliance, and
partial promotion expenses. The assessment rate and specific funding
for research and promotion projects were to be recommended at a later
Committee meeting.
The Committee subsequently met on October 8, 2002, and recommended
2002-03 expenditures of $463,297 and an assessment rate of $0.085 per
50-pound equivalent of onions. Ten of the 13-committee members present
voted in support of the $0.035 per 50-pound equivalent increase and
three voted against it. The three committee members voting against the
recommendation were
[[Page 78752]]
producer handlers who basically did not approve of the research and
promotion budgets. In comparison, last year's budgeted expenditures
were $449,190. The assessment rate of $0.085 is $0.035 higher than the
rate currently in effect. The Committee recommended the increased rate
to fund a major market development program to promote the consumption
of South Texas onions. Without the increase, the Committee's reserve
fund would drop to $16,053. The Committee believes a reserve that low
is not adequate for its operations.
The major expenditures recommended by the Committee for the 2002-03
fiscal period include $72,002 for administrative expenses, $35,000 for
compliance, $260,500 for promotion, and $95,795 for research projects.
Budgeted expenses for these items in 2001-02 were $75,190, $30,000,
$254,000, and $90,000, 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 fiscal period are estimated at 5.5
million 50-pound equivalents, which should provide $467,500 in
assessment income. Income derived from handler assessments would be
adequate to cover budgeted expenses. Funds in the reserve (currently
$204,350) would be kept within the maximum permitted by the order
(approximately two fiscal periods' expenses, Sec. 959.43).
The proposed assessment rate would continue in effect indefinitely
unless modified, suspended, or terminated by USDA upon recommendation
and information submitted by the Committee or other available
information.
Although this assessment rate would be in effect for an indefinite
period, the Committee would 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 USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA would evaluate Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would
be undertaken as necessary. The Committee's 2002-03 budget and those
for subsequent fiscal periods would be reviewed, and as appropriate,
approved by USDA.
Initial Regulatory Flexibility Analysis
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. Accordingly, AMS has
prepared this initial regulatory flexibility analysis.
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 90 producers of onions in the production
area and approximately 35 handlers subject to regulation under the
marketing order. Small agricultural producers are defined by the Small
Business Administration (13 CFR 121.201) as those having annual
receipts less than $750,000, and small agricultural service firms are
defined as those whose annual receipts are less than $5,000,000.
Most of the handlers are vertically integrated corporations
involved in producing, shipping, and marketing onions. For the 2001-02
fiscal period, the industry's 35 handlers shipped onions produced on
16,148 acres with the average and median volume handled being 152,446
and 136,810 fifty-pound bag equivalents, respectively. In terms of
production value, total revenues for the 35 handlers were estimated to
be $39.9 million, with average and median revenues being $1.1 million
and $1.0 million, respectively.
The South Texas onion industry is characterized by producers and
handlers whose farming operations generally involve more than one
commodity, and whose income from farming operations is not exclusively
dependent on the production of onions. Alternative crops provide an
opportunity to utilize many of the same facilities and equipment not in
use when the onion production season is complete. For this reason,
typical onion producers and handlers either produce multiple crops or
alternate crops within a single year.
Based on the SBA's definition of small entities, the Committee
estimates that all of the 35 handlers regulated by the order would be
considered small entities if only their spring onion revenues are
considered. However, revenues from other productive enterprises would
likely push a large number of these handlers above the $5,000,000
annual receipt threshold. All of the 90 producers may be classified as
small entities based on the SBA definition if only their revenue from
spring onions is considered. When revenues from all sources are
considered, a majority of the producers would not be considered small
entities because receipts would exceed $750,000.
This rule would increase the assessment rate established for the
Committee and collected from handlers for the 2002-03 and subsequent
fiscal periods from $0.05 to $0.085 per 50-pound equivalent of onions.
The Committee recommended 2002-03 expenditures of $463,297 and an
assessment rate of $0.085 per 50-pound equivalent. The proposed
assessment rate of $0.085 is $0.035 higher than the current rate. The
quantity of assessable onions for the 2002-03 fiscal period is
estimated at 5.5 million 50-pound equivalents. Thus, the $0.085 rate
should provide $467,500 in assessment income. Income derived from
handler assessments would be more than adequate to cover budgeted
expenses.
The major expenditures recommended by the Committee for the 2002-03
fiscal period include $72,002 for administrative expenses, $35,000 for
compliance, $260,500 for promotion, and $95,795 for research projects.
Budgeted expenses for these items in 2001-02 were $75,190, $30,000,
$254,000, and $90,000, respectively.
The Committee recommended the increased rate to fund a major market
development program to promote the consumption of South Texas onions
without having to draw a large amount from reserves. Without the
increase, the Committee's reserve fund would drop to $16,053. The
Committee believes a reserve that low is not adequate for its
operations.
The Committee reviewed and recommended 2002-03 expenditures of
$463,297, which included increases in research and promotion programs.
Prior to arriving at this budget, the Committee considered information
from various sources, including the Executive Committee and the
Research and Market Development Subcommittees. Numerous alternative
expenditure levels were discussed by these groups based upon the
relative value of various research and promotion projects to the onion
industry. The assessment rate of $0.085 per 50-pound equivalent of
assessable onions was then determined by dividing the total recommended
budget by the quantity of assessable onions, estimated at 5.5 million
50-pound equivalents for the 2002-03
[[Page 78753]]
fiscal period. This is approximately $4,203 above the anticipated
expenses, which the Committee determined to be acceptable.
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the grower
price for the 2002-03 fiscal period could range between $8.60 and $9.25
per 50-pound equivalent of onions. Therefore, the estimated assessment
revenue for the 2002-03 fiscal periods as a percentage of total grower
revenue could be about 1 percent.
This action would increase the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to producers. However, these costs
would be offset by the benefits derived by the operation of the
marketing order. In addition, the Committee's meeting was widely
publicized throughout the South Texas onion industry and all interested
persons were invited to attend the meeting and participate in Committee
deliberations on all issues. Like all Committee meetings, the October
8, 2002, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue. Finally, interested
persons are invited to submit information on the regulatory and
informational impacts of this action on small businesses.
This proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large South Texas onion
handlers. As with all Federal marketing order programs, reports and
forms are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 2002-03 fiscal period began on August 1, 2002, and the
marketing order requires that the rate of assessment for each fiscal
period apply to all assessable onions handled during such fiscal
period; (2) the Committee needs to have sufficient funds to pay its
expenses which are incurred on a continuous basis; and (3) handlers are
aware of this action which was recommended by the Committee at a public
meeting and is similar to other assessment rate actions issued in past
years.
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
proposed to be 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. Section 959.237 is revised to read as follows:
Sec. 959.237 Assessment rate.
On and after August 1, 2002, an assessment rate of $0.085 per 50-
pound equivalent is established for South Texas onions.
Dated: December 19, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-32505 Filed 12-24-02; 8:45 am]
BILLING CODE 3410-02-P