[Federal Register Volume 65, Number 25 (Monday, February 7, 2000)]
[Rules and Regulations]
[Pages 5736-5738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2688]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV00-955-1 FR]


Vidalia Onions Grown in Georgia; Increased Assessment Rate

AGENCY:  Agricultural Marketing Service, USDA.

ACTION:  Final rule.

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SUMMARY:  This rule increases the assessment rate established for the 
Vidalia Onion Administrative 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 began on 
January 1 and ends on December 31. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE:  February 8, 2000.

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 complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 
720-5698, or E-mail: <a href="/cdn-cgi/l/email-protection#470d263e6900322235252235073234232669202831"><span class="__cf_email__" data-cfemail="5f153e2671182a3a2d3d3a2d1f2a2c3b3e71383029">[email protected]</span></a>.

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 issued herein will be applicable to all assessable Vidalia onions 
beginning 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 increases 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 handled. In 
comparison, 1998-1999 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; 64 FR 72265, December 27, 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 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

[[Page 5737]]

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 (totaling $110,000 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 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 will be in effect 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. 
Further rulemaking will be undertaken as necessary. The Committee's 
fiscal period 2000 budget and those for subsequent fiscal periods will 
be reviewed and, as appropriate, approved by the Department.
    This action also changes the 7 CFR Part number and title from 
``Part 911--Vidalia Onions Grown in Georgia'' to ``Part 955--Vidalia 
Onions Grown in Georgia'', and the section heading number from 
``Sec. 911.209 Assessment rate.'' to ``955.209 Assessment rate.'' that 
appeared at the end of the proposed rule to correctly state the title 
and section heading number.
    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 final 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 121.201) 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. The majority of Vidalia onion producers and handlers may be 
classified as small entities.
    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 increases 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 Vidalia 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 assessment 
rate of $0.10 per 50-pound bag 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, will be adequate 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 
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

[[Page 5738]]

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.
    This action increases 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 
are 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.
    This rule imposes 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 proposed rule concerning this action was published in the Federal 
Register on December 13, 1999 (64 FR 69419). Copies of the proposed 
rule were also mailed or sent via facsimile to all Vidalia onion 
handlers. Finally, the proposal was made available through the Internet 
by the Office of the Federal Register. A 30-day comment period ending 
January 12, 2000, was provided for interested persons to respond to the 
proposal. No comments were received.
    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.
    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 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 2000 
fiscal period began 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 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. Also, a 30-day comment period was provided for in the proposed 
rule, and no comments were received.

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 
amended as follows:

PART 955--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. 955.209  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: January 31, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-2688 Filed 2-4-00; 8:45 am]
BILLING CODE 3410-02-P


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