[Federal Register Volume 64, Number 238 (Monday, December 13, 1999)]
[Proposed Rules]
[Pages 69419-69421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32233]
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Proposed Rules
Federal Register
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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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Federal Register / Vol. 64, No. 238 / Monday, December 13, 1999 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 955
[Docket No. FV00-955-1 PR]
Vidalia Onions Grown in Georgia; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposal would increase the assessment rate established
for the Vidalia Onion Committee (Committee) for fiscal period 2000 and
subsequent fiscal periods from $0.07 to $0.10 per 50-pound bag of
Vidalia onions handled. The Committee is responsible for local
administration of the marketing order which regulates the handling of
Vidalia onions grown in Georgia. Authorization to assess Vidalia onion
handlers enables the Committee to incur expenses that are reasonable
and necessary to administer the program. The fiscal period begins on
January 1 and ends December 31. The assessment rate would remain in
effect indefinitely unless modified, suspended, or terminated.
DATES: Comments must be received by January 12, 2000.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk, Fruit
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,
Washington, DC 20090-6456; Fax: (202) 720-5698; 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.
FOR FURTHER INFORMATION CONTACT: William Pimental, Marketing
Specialist, Southeast Marketing Field Office, Fruit and Vegetable
Programs, AMS, USDA, P.O. Box 2276, Winter Haven, FL 33883-2276;
telephone: (863) 299-4770, Fax: (863) 299-5169; 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) 205-6632. Small
businesses may request information on compliance 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-
5698, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 955 (7 CFR part 955), regulating the handling
of Vidalia onions grown in Georgia area, 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, Vidalia 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 Vidalia onions
beginning on January 1, 2000, 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 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. 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 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.
This rule would increase the assessment rate established for the
Committee for the fiscal period 2000 and subsequent fiscal periods from
$0.07 to $0.10 per 50-pound bag of Vidalia onions handled.
The Vidalia 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
Vidalia 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 1998-99 and subsequent fiscal periods, the Committee
recommended, and the Department approved, an assessment rate that would
continue in effect from fiscal period to fiscal period unless modified,
suspended, or terminated by the Secretary upon recommendation and
information submitted by the Committee or other information available
to the Secretary.
The Committee met on September 30, 1999, and unanimously
recommended fiscal period 2000 expenditures of $421,600 and an
assessment rate of $0.10 per 50-pound bag of Vidalia onions. In
comparison, 1998-99 budgeted expenditures were $373,577. However,
during the 1998-99 fiscal period the Committee recommended and the
Department approved a change in the fiscal period under the order to
January 1-December 31 from September 16-September 15 to make the fiscal
period consistent with the Vidalia onion marketing season (64 FR 48243,
September 3, 1999). To provide for continuous operation of the order,
the 1998-99 fiscal period was extended by 3 and \1/2\ months (from
September 16 to
[[Page 69420]]
December 31, 1999). As a result, actual expenditures for 1998-99 are
expected to total about $475,577. In addition, the quantity of
assessable onions for 1998-99 and assessment income is much less than
expected. The Committee projected the quantity of assessable onions for
1998-99 at 4,842,857 50-pound bags and assessment revenue at $339,000.
The actual quantity of assessable onions is expected to be 3,617,017
50-pound bags, and assessment revenue is expected to total $253,191.
Because of this shortfall, the Committee will have to use more of its
operating reserve to cover approved expenses than it expected.
The assessment rate of $0.10 is $0.03 higher than the rate
currently in effect. The increase is needed so the Committee can
maintain its operating reserve at an acceptable level, and to cover
increases in the Committee's promotion expenses for fiscal period 2000.
The major expenditures recommended by the Committee for fiscal
period 2000 include $135,127 for administrative costs, $31,800 for
compliance activities, $175,000 for promotional activities, and $47,000
for research projects. Budgeted expenses for these items in 1998-99
(including the 3\1/2\ month extension) are $151,127 for administrative
costs, $37,850 for compliance activities, $161,600 for promotional
activities, and $125,000 for research projects.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected shipments of Vidalia onions.
Onion shipments for fiscal period 2000 are estimated at 4,200,000 50-
pound bags or equivalent which should provide $420,000 in assessment
income. Income derived from handler assessments, along with interest
income and funds from the Committee's authorized reserve, would be
adequate to cover budgeted expenses for fiscal period 2000. Funds in
the reserve (currently projected to be $83,000 on December 31, 1999),
would be kept within the maximum permitted by the order (about three
fiscal period's budgeted expenses; Sec. 955.44).
The proposed assessment rate would 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 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 the
Department. Committee meetings are open to the public and interested
persons may express their views at these meetings. The Department 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
fiscal period 2000 budget and those for subsequent fiscal periods would
be reviewed and, as appropriate, approved by the Department.
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 133 producers of Vidalia onions in the
production area and approximately 91 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 less than $500,000, and small agricultural
service firms are defined as those whose annual receipts are less than
$5,000,000.
Based on the Georgia Agricultural Statistical Service and committee
data, the average price for fresh Vidalia onions during the 1998-99
season was $15.45 per 50-pound bag or equivalent and total shipments
were 3,617,017 bags. Approximately 28 percent of all handlers handled
83 percent of Vidalia onion shipments. Many Vidalia onion handlers ship
other vegetable products which are not included in the committee data
but would contribute further to handler receipts.
Using the average price, about 97.4 percent of the Vidalia onion
handlers could be considered small businesses under the SBA definition.
The majority of Vidalia Onion producers and handlers may be classified
as small entities.
This rule would increase the assessment rate established for the
Committee and collected from handlers for fiscal period 2000 and
subsequent fiscal periods from $0.07 to $0.10 per 50-pound bag or
equivalent of assessable onions. The Committee unanimously recommended
fiscal period 2000 expenditures of $421,600 and an assessment rate of
$0.10 per 50-pound bag or equivalent. The proposed assessment rate of
$0.10 is $0.03 higher than the 1998-99 rate. The quantity of assessable
Vidalia onions for fiscal period 2000 is estimated at 4,200,000 50-
pound bags. Thus, the $0.10 rate should provide $420,000 in assessment
income. Income derived from handler assessments, along with interest
income and funds from the Committee's authorized reserve, would be a
dequate to cover budgeted expenses.
The major expenditures recommended by the Committee for fiscal
period 2000 include $135,127 for administrative costs, $31,800 for
compliance activities, $175,000 for promotional activities, and $47,000
for research projects. Budgeted expenses for these items in 1998-99
(including the 3\1/2\ month extension) were $151,127 for administrative
costs, $37,850 for compliance activities, $161,600 for promotional
activities, and $125,000 for research projects.
As mentioned earlier, in an effort to recover from its assessment
income shortfall in 1998-99, maintain its operating reserve at an
acceptable level, and expand its promotion activities, the Committee
voted unanimously to increase its assessment rate to cover operating
expenses during fiscal period 2000. The Committee believes that
increased promotion activities are needed to help the Vidalia onion
industry remain competitive in the marketplace.
The Committee reviewed and unanimously recommended fiscal period
2000 expenditures of $421,600. Prior to arriving at this budget, the
Committee considered information from various sources, such as the
Budget Subcommittee, the Research Subcommittee, and the Advertising and
Promotion Subcommittee. Alternative expenditure levels were discussed
by these groups, based upon the relative value of various promotion and
research projects to the Vidalia onion industry. The assessment rate of
$0.10 per 50-pound bag or equivalent of assessable Vidalia onions was
then determined by dividing the total recommended budget by the
quantity of assessable onions, estimated at 4,200,000 50-pound bags for
fiscal period 2000. This rate will generate $420,000, which is $1,600
[[Page 69421]]
below the anticipated expenses. The Committee found this acceptable
because interest income and reserve funds are available to make up the
deficit.
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the grower
price for fiscal period 2000 could range between $10.00 and $15.00 per
50-pound bag of Vidalia onions. Therefore, the estimated assessment
revenue for fiscal period 2000 as a percentage of total grower revenue
could range between 0.7 and 1.0 percent.
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 Vidalia onion production area and all interested persons were
invited to attend the meeting and participate in Committee
deliberations on all issues. Like all Committee meetings, the September
30, 1999, 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 Vidalia 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.
The Department 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 the
following web site: 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 2000 fiscal period begins on January 1, 2000, and the
marketing order requires that the rate of assessment for each fiscal
period apply to all assessable Vidalia 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 unanimously 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 955
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 955 is
proposed to be amended as follows:
PART 911--VIDALIA ONIONS GROWN IN GEORGIA
1. The authority citation for 7 CFR parts 955 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 955.209 is revised to read as follows:
Sec. 911.209 Assessment rate.
On and after January 1, 2000, an assessment rate of $0.10 per 50-
pound bag or equivalent is established for Vidalia onions.
Dated: December 7, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-32233 Filed 12-10-99; 8:45 am]
BILLING CODE 3410-02-P
