[Federal Register: December 30, 2004 (Volume 69, Number 250)]
[Rules and Regulations]
[Page 78296-78298]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30de04-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[Docket No. FV05-959-1 IFR]
Onions Grown in South Texas; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule decreases the assessment rate established for the
South Texas Onion Committee (Committee) for the 2004-05 and subsequent
fiscal periods from $0.03 to $0.02 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 to incur expenses that are
reasonable and necessary to administer the program. The fiscal period
began August 1 and ends July 31. The assessment rate will remain in
effect indefinitely unless modified, suspended, or terminated.
DATES: Effective January 3, 2005. Comments received by February 28,
2005, 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 to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; fax: (202) 720-8938; e-mail: moab.docketclerk@usda.gov; or
Internet: http://www.regulations.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,
Texas Marketing Field Office, Marketing Order Administration Branch,
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, 1400 Independence Avenue, SW.,
STOP 0237, Washington, DC 20250-0237; 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, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; 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 issued herein will be applicable to all assessable
onions beginning August 1, 2004, 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 decreases the assessment rate established for the
Committee for the 2004-05 and subsequent fiscal periods from $0.03 to
$0.02 per 50-pound equivalent of onions handled.
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.
Thus, all directly affected persons have an opportunity to participate
and provide input.
For the 2003-04 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 June 3, 2004, and unanimously recommended
2004-05 fiscal period expenditures of $145,291 and an assessment rate
of $0.03 per 50-pound equivalent of onions. The Committee subsequently
met on October 28, 2004, and unanimously recommended a revised budget
of $141,819 and a reduced assessment rate of $0.02 per 50-pound
equivalent of onions. In comparison, last year's budgeted expenditures
were $139,661. The recommended assessment rate is $0.01 lower than the
rate currently in effect. The decrease in the assessment rate is
primarily due to the 2005 onion crop expected to be larger than
previously estimated (5 million 50-pound equivalents vs. 4 million 50-
pound equivalents). The reduced assessment rate and budget will lower
handler costs by about $50,000 and will keep the Committee's reserves
at an acceptable level. At the current rate of assessment, assessment
and interest income would exceed anticipated expenses by about $11,000,
and the projected reserve on July 31, 2005, would exceed the level
authorized by the order.
The major expenditures recommended by the Committee for the 2004-05
fiscal period include $76,819 for personnel and office expenses,
$30,000 for compliance, and $35,000 for
[[Page 78297]]
promotion expenses. Budgeted expenses for these items in 2003-04 were
$74,661, $30,000, and $35,000, respectively.
The assessment rate recommended by the Committee was derived by
considering anticipated expenses and production levels of South Texas
onions, and additional pertinent factors. In its recommendation, the
Committee utilized an estimate of 5 million 50-pound equivalents of
assessable onions for the 2004-05 fiscal period. If realized, this will
provide estimated assessment revenue of $100,000 from all handlers. In
addition, it is anticipated that $41,819 will be provided by interest
income and reserve funds. When combined, revenue from these sources
will be adequate to cover budgeted expenses. Funds in the reserve
(currently $277,746) will be kept within the maximum of approximately
two fiscal periods' expenses as required by Sec. 959.43 of the order.
The assessment rate established in this rule will 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 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 USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA 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 2004-05 budget and those
for subsequent fiscal periods will 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 113 producers of onions in the production
area and approximately 37 handlers subject to regulation under the
marketing order. Small agricultural producers are defined by the Small
Business Administration (SBA) (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 2003-04
marketing year, the industry's 37 handlers shipped onions produced on
14,436 acres with the average and median volume handled being 137,530
and 111,545 fifty-pound equivalents, respectively. In terms of
production value, total revenues for the 37 handlers were estimated to
be $42.5 million, with average and median revenues being $1.14 million
and $931,400, 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 37 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 113 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 decreases the assessment rate established for the
Committee and collected from handlers for the 2004-05 and subsequent
fiscal periods from $0.03 to $0.02 per 50-pound equivalent of onions
handled. The Committee unanimously recommended 2004-05 expenditures of
$141,819 and an assessment rate of $0.02 per 50-pound equivalent of
onions handled. The recommended assessment rate is $0.01 lower than the
rate currently in effect. The quantity of assessable onions for the
2004-05 fiscal period is estimated at 5 million 50-pound equivalents.
Thus, the $0.02 rate should provide $100,000 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.
The major expenditures recommended by the Committee for the 2004-05
fiscal period include $76,819 for personnel and office expenses,
$30,000 for compliance, and $35,000 for promotion expenses. Budgeted
expenses for these items in 2003-04 were $74,661, $30,000, and $35,000,
respectively.
The Committee reviewed and unanimously recommended 2004-05
expenditures of $141,819, which include a decrease in administrative
expenses. The assessment rate of $0.02 per 50-pound equivalent of
assessable onions recommended by the Committee was determined by
considering anticipated expenses and production levels of South Texas
onions. The Committee utilized an estimate of 5 million 50-pound
equivalents of assessable onions for the 2004-05 fiscal period, which,
if realized, will provide estimated assessment revenue of $100,000 from
all handlers. In addition, it is anticipated that $41,819 will be
provided by interest income and reserve funds. When combined, revenue
from these sources will be adequate to cover budgeted expenses.
The Committee discussed alternative expenditure levels, but
determined that the recommended expenses were reasonable and necessary
to adequately cover program operations. Other assessment rates were not
considered because the Committee had substantially lowered its
assessment rate the previous fiscal year.
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the season
average f.o.b. price for the 2004-05 fiscal period could range between
$9.25 and $19.05 per 50-pound equivalent of onions (range of Texas
f.o.b. onion prices for 2001 through 2003). Therefore, the estimated
assessment revenue for the 2004-05 fiscal period as a percentage of
total
[[Page 78298]]
f.o.b. revenue could range between .10 and .22 percent.
This action decreases the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to producers. However, decreasing the
assessment rate reduces the burden on handlers, and may reduce the
burden on producers. 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
28, 2004, 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 action imposes 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.
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 2004-05 fiscal period began on August 1,
2004, 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) this action decreases the assessment rate for
assessable onions beginning with the 2004-05 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 60-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.
0
For the reasons set forth in the preamble, 7 CFR part 959 is amended as
follows:
PART 959--ONIONS GROWN IN SOUTH TEXAS
0
1. The authority citation for 7 CFR part 959 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 959.237 is revised to read as follows:
Sec. 959.237 Assessment rate.
On and after August 1, 2004, an assessment rate of $0.02 per 50-
pound equivalent is established for South Texas onions.
Dated: December 23, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-28631 Filed 12-29-04; 8:45 am]
BILLING CODE 3410-02-P