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[Federal Register Volume 78, Number 24 (Tuesday, February 5, 2013)]
[Proposed Rules]
[Pages 8047-8050]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02400]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Doc. No. AMS-FV-12-0039; FV12-959-1 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 2012-13 and 
subsequent fiscal periods from $0.025 to $0.03 per 50-pound equivalent 
of onions handled. The Committee locally administers the marketing 
order which regulates the handling of onions grown in South Texas. 
Assessments upon onion handlers are used by the Committee to fund 
reasonable and necessary expenses of the program. The fiscal period 
begins 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 February 15, 2013.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. Comments should reference the document 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:

[[Page 8048]]

http://www.regulations.gov. All comments submitted in response to this 
rule will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-8793, or 
Email: Doris.Jamieson@ams.usda.gov or Christian.Nissen@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 959, 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, 2012, and continue until 
amended, suspended, or terminated.
    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 2012-13 and subsequent fiscal periods from $0.025 to 
$0.03 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. 
Thus, all directly affected persons have an opportunity to participate 
and provide input.
    For the 2009-10 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 26, 2012, and unanimously recommended 
2012-13 expenditures of $145,467 and an assessment rate of $0.03 per 
50-pound equivalent of onions. In comparison, last year's budgeted 
expenditures were $190,467. The assessment rate of $0.03 is $0.005 
higher than the rate currently in effect. The Committee's 2012-13 crop 
estimate of five million 50-pound equivalents is lower than the six 
million estimated for last year, and would not generate adequate 
assessment income to cover budgeted expenses at the $0.025 rate. With 
the recommended $0.005 increase, assessment income should approximate 
$150,000. The increased assessment rate should provide sufficient funds 
to cover anticipated 2012-13 expenses.
    The major expenditures recommended by the Committee for the 2012-13 
fiscal period include $46,610 for compliance, $37,050 for 
administrative, and $32,942 for management. Budgeted expenses for these 
items were the same in 2011-12. The reduction in overall budgeted 
expenses from $190,467 to $145,467 is due to the elimination of market 
development programs.
    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 five million 50-
pound equivalents which should provide $150,000 in assessment income. 
Income derived from handler assessments, along with interest income, 
would be adequate to cover budgeted expenses. Funds in the reserve 
(currently $107,162) would be kept within the maximum permitted by the 
order (approximately two fiscal periods' expenses as authorized in 
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 2012-13 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) (5 U.S.C. 601-612), 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

[[Page 8049]]

small entities acting on their own behalf.
    There are approximately 85 producers of onions in the production 
area and approximately 30 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,000,000 (13 CFR 121.201).
    According to Committee data and information from the National 
Agricultural Statistical Service (NASS), the average price for South 
Texas onions during the 2010-11 season was around $7.35 per 50-pound 
equivalents and total shipments were approximately 5.4 million 50-pound 
equivalents. Using the average price and shipment information and 
assuming a normal distribution, the majority of South Texas onion 
producers would have annual receipts of less than $750,000. In 
addition, based on available information, approximately 80 percent 
South Texas onion handlers could be considered small businesses under 
SBA's definition. Thus, the majority of South Texas 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 the 2012-13 and subsequent 
fiscal periods from $0.025 to $0.03 per 50-pound equivalent of onions. 
The Committee unanimously recommended 2012-13 expenditures of $145,467 
and an assessment rate of $0.03 per 50-pound equivalent. The proposed 
assessment rate of $0.03 is $0.005 higher than the 2011-12 rate. The 
quantity of assessable onions for the 2012-13 fiscal year is estimated 
at five million 50-pound equivalents, compared to an estimated six 
million 50-pound equivalents last year. The current assessment rate of 
$0.025 would not generate sufficient revenue to meet expenses, however 
the $0.03 rate should provide $150,000 in assessment income and be 
adequate to meet this year's expenses.
    The major expenditures recommended by the Committee for the 2012-13 
fiscal period include $46,610 for compliance, $37,050 for 
administrative, and $32,942 for management. Budgeted expenses for these 
items were the same in 2011-12. The reduction in overall budgeted 
expenses from $190,467 to $145,467 is due to the elimination of market 
development programs.
    Prior to arriving at this budget, the Committee considered 
information from various sources, such as the Committee's Budget and 
Personnel Committee and the Marketing Committee. Alternative 
expenditure levels were discussed by these groups, based upon the 
relative value of various promotional projects to the South Texas onion 
industry. The assessment rate of $0.03 per 50-pound equivalent of 
assessable onions was then determined by dividing the total recommended 
budget by the quantity of assessable onions, estimated at five million 
50-pound equivalents for the 2012-13 fiscal period. Assessment income 
should approximate $150,000, $5,333 above 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 2012-13 fiscal period could range between $6.60 and $9.80 
per 50-pound equivalent of onions. Therefore, the estimated assessment 
revenue for the 2012-13 fiscal period as a percentage of total grower 
revenue could range between .3 and .45 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 June 26, 
2012, 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 comments on this proposed rule, including 
the regulatory and informational impacts of this action on small 
businesses.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178 (Vegetable and Specialty Crops). No changes 
in those requirements as a result of this action are necessary. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    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: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Laurel May at the previously-
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    A 10-day comment period is provided to allow interested persons to 
respond to this proposed rule. Ten days is deemed appropriate because: 
(1) The 2012-13 fiscal period began on August 1, 2012, 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 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 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

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, 2012, an assessment rate of $0.03 per 50-
pound equivalent is established for South Texas onions.

[[Page 8050]]

    Dated: January 30, 2013.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2013-02400 Filed 2-4-13; 8:45 am]
BILLING CODE 3410-02-P
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