Onions grown in South Texas , 17037-17042 [E7-6234]
[Federal Register: April 6, 2007 (Volume 72, Number 66)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[Docket Nos. AO-322-A4; AMS-2006-0079; FV06-959-1]
Onions Grown in South Texas; Recommended Decision and Opportunity
To File Written Exceptions to Proposed Amendments to Marketing
Agreement No. 143 and Order No. 959
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and opportunity to file exceptions.
SUMMARY: This recommended decision invites written exceptions on
proposed amendments to the marketing agreement and order (order) for
onions grown in South Texas. Three amendments were proposed by the
South Texas Onion Committee (committee), which is responsible for local
administration of the order. These proposed amendments would: Add
authority to the order to establish supplemental assessment rates on
specified containers of onions; authorize interest and late payment
charges on assessments not paid within a prescribed time period; and
authorize the committee to engage in marketing promotion and paid
advertising activities. Two additional amendments were proposed by the
Department of Agriculture (USDA). These amendments would: Require that
a continuance referendum be conducted every six years to determine
grower support for the order; and, limit the number of consecutive
terms of office a member can serve on the committee. The USDA also
proposed to make such changes to the order as may be necessary to
conform to any amendment that may result from the hearing.
DATES: Written exceptions must be filed by May 7, 2007.
ADDRESSES: Written exceptions should be filed with the Hearing Clerk,
U.S. Department of Agriculture, Room 1081-S, Washington, DC 20250-9200;
Fax: (202) 720-9776; or via the Internet at https://www.regulations.gov.
All comments should reference the docket number and the date and page
number of this issue of the Federal Register. Comments will be made
available for public inspection in the Office of the Hearing Clerk
during regular business hours, or can be viewed at: https://www.regulations.gov
FOR FURTHER INFORMATION CONTACT: Martin Engeler, Marketing Order
Administration Branch, Fruit and Vegetable Programs, Agricultural
Marketing Service, USDA, 2202 Monterey Street, 102-B, Fresno,
CA 93721; telephone: (559) 487-5110, Fax: (559) 487-5906, E-mail:
Martin.Engeler@usda.gov; or Kathleen M. Finn, 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, E-mail:
Small businesses may request information on this proceeding 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, E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding include a
Notice of Hearing issued on May 23, 2006, and published in the May 30,
2006, issue of the Federal Register (71 FR 30629).
This action is governed by the provisions of sections 556 and 557
of title 5 of the United States Code and is therefore excluded from the
requirements of Executive Order 12866.
Notice is hereby given of the filing with the Hearing Clerk of this
recommended decision with respect to the proposed amendment of
Marketing Agreement 143 and Order No. 959 regulating the handling of
onions grown in South Texas, and the opportunity to file written
exceptions thereto. Copies of this decision can be obtained from Martin
Engeler, whose address is listed above.
This recommended decision is issued pursuant to the provisions of
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.
601 et seq.), hereinafter referred to as the ``Act,'' and the
applicable rules of practice and procedure governing the formulation of
marketing agreements and orders (7 CFR part 900).
The proposed amendments are based on the record of a public hearing
held on June 15, 2006, in Mission, Texas. Notice of this hearing was
published in the Federal Register on May 30, 2006 (71 FR 30629). The
notice of hearing contained proposals submitted by both the committee
Four proposed amendments to the order were initially submitted by
the committee to USDA. These proposals were the result of deliberations
and a recommendation by the committee at a public meeting on October
28, 2004. The four proposed amendments were included in the notice of
hearing. Proposal number four in the notice of hearing pertaining to
container marking requirements was withdrawn at the hearing because the
committee determined it was not needed and recommended it be withdrawn
at a meeting on June 1, 2006. The committee's remaining three proposed
amendments to the order would: (1) Provide authority to establish
supplemental assessment rates on specified containers of onions; (2)
authorize interest and late payment charges on assessments not paid
within a prescribed time period; and (3) add authority for marketing
promotion, including paid advertising.
The USDA proposed two additional amendments that would: Require a
continuance referendum to be conducted every six years to determine
grower support for the order; and limit the number of consecutive years
terms of office a member may serve on the committee. USDA also proposed
to make such changes to the order as may be necessary, if any of the
proposed changes are adopted, so that all of the order's provisions
conform to the effectuated amendments.
Four industry witnesses testified at the hearing. These witnesses
represented onion growers and handlers in the production area, as well
as the committee, and they all supported the committee's recommended
changes. The witnesses expressed the need to provide the industry with
additional tools to aid in the marketing of onions and to
improve the operation and administration of the order.
Witnesses expressed their support of the committee's recommendation
to add authority for supplemental rates of assessment for specified
containers of onions. Additional funds generated from supplemental
rates of assessment could be used for promotion of onions packed in
Witnesses also offered testimony in support of adding authority to
charge interest and/or late payment charges on assessments not paid
within a prescribed time period. This authority, if implemented, would
provide an incentive for handlers to pay assessments in a timely manner
and would be consistent with standard business practices.
Witnesses addressed the need for adding authority to the order for
marketing promotion, including paid advertising. This authority would
enable the committee to engage in various types of promotional
activities to assist in the marketing of its product, which could lead
to greater market exposure and consumer demand for South Texas onions,
thereby fostering improved grower returns.
A USDA witness testified in support of tenure limitations as a way
to broaden industry participation in the program. The USDA witness also
presented testimony in support of periodic continuance referenda as a
means of determining grower support for the order.
At the conclusion of the hearing, the Administrative Law Judge
stated that the final date for interested persons to file proposed
findings and conclusions or written arguments and briefs based on the
evidence received at the hearing would be August 15, 2006. If the
hearing transcript was not posted on the Internet by July 15, 2006, the
final date would be changed to 30 days after the date the hearing
transcript was so posted. The transcript was posted prior to July 15;
thus, the filing date remained at August 15, 2006. No briefs were
The material issues presented on the record of hearing are as
(1) Whether to amend the order to add authority for supplemental
rates of assessment for specified containers of onions;
(2) Whether to amend the order to add authority for late payment
and interest charges on assessments not paid within a prescribed time
(3) Whether to amend the order to add authority for the committee
to engage in marketing promotion, including paid advertising
(4) Whether to amend the order to limit the number of consecutive
terms of office a person can serve as a member on the committee; and
(5) Whether to amend the order to require that continuance
referenda be held every 6 years.
Findings and Conclusions
The following findings and conclusions on the material issues are
based on evidence presented at the hearing and the record thereof.
Material Issue Number 1--Supplemental Rates of Assessment
Section 959.42 of the order should be amended to add authority to
establish supplemental rates of assessment on specified containers of
onions. That section currently authorizes establishment of assessment
rates on containers of onions, but not supplemental rates based on the
types of containers used in packing and shipping onions. The assessment
rate is established through informal rulemaking after recommendation of
the committee and implementation by USDA. Once established, handlers
are required to pay an assessment to the committee based on the
quantity of containers they ship. If authority to establish
supplemental rates of assessment is added to the order, any
supplemental rate would likewise require recommendation of the
committee and implementation by USDA through informal rulemaking.
Witnesses testified that the South Texas onion industry is geared
primarily towards the fresh market. The product is typically packed and
marketed in two types of containers. The lower quality (standard)
product is packed and sold in 50-pound sacks, while the higher quality
(premium) product is packed and sold in more appealing 40-pound
cartons. The premium product is a milder, sweeter onion due to its
lower pyruvic acid content. Onions are routinely tested to measure
their pyruvic acid level prior to packing to ensure that the onions
packed in cartons is in fact a premium quality product. According to
record evidence, premium carton onions are typically sold at retail
outlets as a higher-end product at relatively higher price levels as
compared to standard bagged onions which are customarily sold to
foodservice outlets at relatively lower price levels.
Witnesses testified that the industry would like to increase sales
and build demand for its higher value, premium product by promoting it
and differentiating it from standard product. Witnesses also testified
that the committee would like to expand the range of promotional
opportunities available to promote its product, and that this proposal
goes hand in hand with the proposal to allow marketing promotion,
including paid advertising (Material Issue Number 3). The rationale and
anticipated benefits of advertising and promotion are discussed later
under Material Issue Number 3.
According to record testimony, the funding of promotional
activities for premium onions packed in cartons should be derived by
applying a supplemental assessment rate to such product. Witnesses
stated that any funds raised from a supplemental assessment should be
used for promotion of that specific product. Testimony indicated that
the primary benefits of promoting premium quality onions would accrue
to those growers and handlers involved in producing and selling that
product. Therefore, it would be more equitable for those benefiting
from these activities to provide the funding, rather than using funding
from a general assessment on all onions packed and sold.
A witness testified that applying a supplemental assessment rate on
carton onions would not pose any problems from an administrative
standpoint. All regulated South Texas onions are required to be
inspected by the Federal-State Inspection Service prior to shipment.
The inspection certificates provide the basis for assessment billings,
and the certificates indicate the numbers and types of containers used.
Committee staff utilizes this information in its assessment billings.
Testimony was also presented which addressed concerns regarding
potential compliance issues with a supplemental assessment rate. It was
hypothesized that handlers could circumvent a supplemental assessment
rate by packing in bags prior to inspection, and then re-packing the
product in cartons after the inspection was performed. Witnesses stated
there would be no incentive for this to occur, since the costs
associated with re-packing would far exceed any additional supplemental
assessment rate incurred.
The record evidence supports adding authority to the order to
establish supplemental rates of assessment on specified containers of
onions. In addition, the evidence supports applying such supplemental
assessment funds towards programs designed to promote the product upon
which the supplemental assessments would be collected. The regulatory
language contained in the Notice of Hearing and presented at the
hearing did not address this specific issue. However, based on the
testimony received at the hearing, it
is recommended that the proposed regulatory language be modified to
specify that funds collected from a supplemental assessment rate be
used for projects and activities related to the product upon which such
assessments are collected.
For the above reasons, it is recommended that Sec. 959.42 be
amended accordingly as modified. There was no testimony in opposition
to this proposal.
Material Issue Number 2--Authority for Interest and Late Payment
Charges on Unpaid Assessments
Section 959.42 of the order should be amended to include authority
for the committee to charge interest and late payment fees for
assessments not paid within a prescribed timeframe. That section of the
order currently does not contain such authority. If such authority is
added, informal rulemaking would be required to establish parameters
for implementation, including applicable interest rates and late
Witnesses testified that adding such authority to the order would
provide the committee with an additional tool to administer the
assessment collection provisions of the order. Charging late fees and/
or interest on assessments not paid within a prescribed time frame
would provide an incentive for handlers to pay assessments in a timely
manner. Further testimony stated that such fees would remove any
financial advantage for those who do not pay on time while they benefit
from committee programs. It would help create a level playing field for
Record testimony reflects that late payment and interest charges on
unpaid financial obligations are commonplace in the business world, and
implementation of such charges would bring the committee's financial
operations in line with standard business practices.
Section 959.42 should thus be amended to include authority for the
committee, with approval of the Secretary, to implement late payment
and interest charges on assessments not paid within a prescribed time
period. There was no testimony in opposition to this proposal.
Material Issue Number 3--Authority for Marketing Promotion, Including
Section 959.48 of the order should be amended to include authority
for marketing promotion, including paid advertising. Section 959.48
currently authorizes only production research, marketing research, and
development activities. Adding authority for marketing promotion and
paid advertising to the order would expand the promotional
opportunities available to the committee to help market South Texas
Witnesses testified that the intent of this proposal is to allow
the committee to engage in paid advertising promotional activities,
should the committee so choose.
As previously discussed under Material Issue Number 1, the industry
believes it would be beneficial to promote its premium onions packed in
cartons. Witnesses testified that it is becoming increasingly difficult
to succeed in the produce industry due to domestic and foreign
competition. In order to remain competitive and maintain a viable onion
industry in South Texas, witnesses indicated that advertising and
promotion is important to promote the best quality product available.
Industry witnesses further testified that promotion of carton
onions at the retail level could be undertaken which would help
differentiate the product from bagged onions, and also differentiate
Texas onions from onions produced in other competing geographical
areas. Promotions would be designed to influence consumer's perceptions
and increase awareness of the product. This in turn could lead to
repeat purchases, thus building demand for the product. Successful
promotion could lead to increased demand which in turn could lead to
increased price levels, and the end result would be improved returns to
producers and handlers of South Texas onions.
Witnesses stated that the committee currently has limited financial
resources and would not likely engage in a significant advertising
campaign. It is more likely to partner with retailers in purchasing
advertising space in newspapers and/or radio and television spots. This
type of advertising has been proven to be an effective means of selling
commodities and presents a cost effective method of advertising with
limited resources. However, should the committee choose to devote
adequate funding, it could also engage in other forms of advertising.
Witnesses testified that the committee had been precluded from
participating in these types of activities in the past due to
constraints in the order authority.
Witnesses further testified that any promotional activity the
committee engages in must be fully vetted by the committee at public
meetings, and the committee would only engage in those activities with
the expectation that sales would increase and returns to handlers and
producers would improve.
The record supports adding authority for marketing promotion,
including paid advertising, to Sec. 959.48 of the order. There was no
opposition testimony on this issue.
Material Issue Number 4--Term Limits
Section 959.23, Term of office, should be revised to establish a
limit on the number of consecutive terms a person may serve on the
Currently, the term of office of each member and alternate member
of the committee is two years. There are no provisions related to term
limits in the marketing order. Members and alternates may serve on the
committee until their respective successors are selected and have
qualified, pursuant to the marketing order.
The record shows that USDA proposed tenure requirements for
committee members is a means to increase industry participation on the
committee, provide for more diverse membership, provide the committee
with new perspectives and ideas, and increase the number of individuals
in the industry with committee experience.
Experience with other marketing order programs suggests that a
period of six years would be appropriate. Since the current term of
office for committee members and alternates is two years, USDA is
proposing that no member serve more than three consecutive two-year
terms or a total of six years. This proposal for a limitation on tenure
would not apply to alternates. Once a member has served on the
committee for three consecutive terms, or six years, the member would
be required to sit out for at least one year before being eligible to
serve as a member again. The member could serve as an alternate during
that time. Service on the committee prior to the effective date of this
change would not apply to a member's term limitation. Also, a person
who has served less than six consecutive years on the committee may not
be selected for a new term if his or her total consecutive years on the
committee at the end of that new term would exceed six years.
There was no opposition testimony on this issue. Therefore, it is
recommended that the order be amended to establish term limit
requirements for committee members.
Material Issue Number 5--Continuance Referenda
Section 959.84, Termination, should be amended to require that
continuance referenda be conducted every six years to ascertain
industry support for the order.
Currently, there is no provision in the marketing order that
continuance referenda. The record evidence indicates that growers
should have an opportunity to periodically vote on whether the
marketing order should continue. Continuance referenda provide an
industry with a means to measure grower support for the marketing order
program. Since marketing orders are designed to benefit growers, it
follows that they should be afforded the opportunity to express whether
they support the programs on a periodic basis. Experience has shown
that marketing order programs need significant industry support to
operate effectively. Under this proposal, USDA would consider
termination of the marketing order if continuance is not favored by at
least two-thirds of those voting, or at least two-thirds of the volume
represented in the referendum. This is the same criteria as that for
issuance of an order. Experience in recent years indicates that six
years is an appropriate period to allow growers an opportunity to vote
for continuance of the program. Therefore, the proposal sets forth that
a referendum would be conducted six years after the effective date of
this amendment and every sixth year thereafter.
The proposed regulatory text set forth in the Notice of Hearing did
not include the above-mentioned criteria the Department would consider
in determining if the order should be continued or terminated. To
provide clarity, the Department recommends including such criteria in
the proposed amended regulatory text.
The Department believes that growers should have an opportunity to
periodically vote on whether the marketing order should continue. There
was no opposition testimony on this issue. Accordingly, it is
recommended that the order be amended to require a continuance
referendum every six years, and that such amendment include criteria
the Department would consider in determining if the order should be
continued or terminated.
USDA also proposed to make such changes as may be necessary to the
order to conform to any amendment that may result from the hearing. No
necessary conforming changes have been identified at this time.
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
Accordingly, the AMS has prepared this initial regulatory flexibility
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Small agricultural growers have
been defined by the Small Business Administration (SBA) (13 CFR
121.201) as those having annual receipts of less than $750,000. Small
agricultural service firms are defined as those with annual receipts of
less than $6,500,000.
There are approximately 114 growers of onions in the production
area and approximately 38 handlers subject to regulation under the
order. For the 2005-06 marketing year, the industry's 38 handlers
shipped onions produced on 17,694 acres with the average and median
volume handled being 182,148 and 174,437 fifty-pound equivalents,
respectively. In terms of production value, total revenues for the 38
handlers were estimated to be $44.2 million, with average and median
revenues being $1.16 million and $1.12 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 38 handlers regulated by the order would be
considered small entities if only their onion revenues are considered.
However, revenues from other productive enterprises would likely push a
number of these handlers above the $6,500,000 annual receipt threshold.
Likewise, all of the 114 producers may be classified as small entities
based on the SBA definition if only their revenue from onions is
The committee is comprised of 10 growers and 7 handlers,
representing both large and small entities. Committee meetings are open
to the public. All members are able to participate in committee
deliberations and each has an equal vote in committee decisions. When
the committee met on October 28, 2004, and recommended the proposed
amendments, all views expressed by the members and others in attendance
In addition, the hearing to receive evidence on the proposed
changes was open to the public and all interested parties were invited
and encouraged to participate and provide their views.
The proposed amendments are intended to provide the committee and
industry with additional tools to aid in the marketing of South Texas
onions, and to improve the operation and administration of the order.
Record evidence indicates that the proposed changes are intended to
benefit all onion producers and handlers under the order, regardless of
size. Witnesses testified that the impact of any of the proposals, if
implemented, would be proportionate to individual grower's and
handler's size, and that both small and large entities would benefit.
The record shows that the proposal to include authority for
supplemental rates of assessments on specified containers would not
have a differential impact on small versus large growers and handlers.
Any increased assessment costs would be based on the type and volume of
containers shipped rather than the size of a grower or handler's
operation. Any supplemental assessment rate would thus be applied
proportionately to handlers.
Onions that are packed and sold in cartons receive a higher return
than onions packed and sold in bags or sacks. There is no known
relationship between small versus large growers and handlers and the
types of containers in which they pack their product. If onions packed
in the higher value cartons were assessed at a higher rate, the
assessment burden on the industry would be more proportionate to the
revenues generated by the sales of product in the different types of
In absolute dollar terms, a handler packing and selling only carton
onions would pay more in assessments than a handler packing and selling
a comparable volume of bagged onions. However, witnesses testified that
additional funds generated from the supplemental assessment rate on
specified containers would be used to promote sales of the product
packed and sold in those containers. Therefore, the benefits of
promotion would more directly benefit those paying the supplemental
assessment. As discussed later in this document, the benefits of such
promotions would be expected to outweigh the additional costs.
Assessment revenues generated from supplemental assessment rates on
specified containers would not be used to subsidize the lower
assessment revenues generated from sales of the lower value product,
thereby ensuring equitability between handlers.
The proposed amendment to authorize the committee to charge
interest and/or late payment fees on
assessments not paid within a prescribed time period would not have a
differential impact on small and large entities. According to record
testimony, late fees and interest changes, if implemented, would be
based on handlers' timeliness of payments, regardless of size. A
hearing witness familiar with the assessment collection operations
under the order stated that there is no relationship between a
handler's performance with regard to timely assessment payment and the
size of the handler's business operation. Any increased costs would be
borne only by those handlers that fail to pay their assessments in a
timely manner. These potential costs would offset any potential
advantage handlers could gain by not paying their assessments when due
and would thus promote equity for all handlers. It would provide an
incentive to pay on time. This proposed amendment is strictly a
performance-based measure and would thus be applied based on handlers'
performance with respect to their payment of assessments.
Adding authority for paid advertising to the order would not
disproportionately impact small business if such authority is
implemented. Paid advertising activities would provide another tool the
committee could use to promote its product. Paid advertising activities
would be funded from handler assessments, which, as previously
mentioned, are proportional to the volume of product shipped and thus
proportional to the handler's relative size. Likewise, funding of the
activities would be proportional.
Promotional activities authorized under the order are generic in
nature. Generic advertising and promotion attempts to influence
consumer's preferences and perceptions about a product, and if
successful, ultimately expands the demand for the product. Because
generic promotion promotes a product category, it benefits all entities
in the category, especially growers and handlers. As witnesses
testified, specific benefits of promotion and advertising programs are
difficult to quantify, and are especially difficult to estimate prior
to engaging in the activities. However, if more product is ultimately
sold, both large and small growers and handlers benefit.
The proposed amendment to limit the number of consecutive terms of
office that committee members may serve would increase industry
participation on the committee by allowing more persons the opportunity
to serve as members of the committee. It would also provide for more
diverse membership, provide the committee with new perspectives and
ideas, and increase the number of individuals in the industry with
committee experience. There would be no additional cost as a result of
The proposal to require continuance referenda on a periodic basis
to ascertain grower support for the order would allow growers to vote
on whether to continue the operation of the program. This provides a
means for those whom the order was intended to benefit with an
opportunity to express their views regarding continuation of the
marketing order. USDA would conduct the referenda, and thus USDA would
bear the majority of any associated costs.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impacts of the proposed
amendments to the order on small entities. The record evidence is that
while some minimal costs may occur, those costs would be outweighed by
the benefits expected to accrue to the South Texas onion industry. In
addition, any additional costs would be proportional to a handler's
size and would not unduly or disproportionately impact small entities.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule. The amendments are
designed to improve the administration and operation of the order and
to provide additional tools to assist in the marketing of South Texas
Committee meetings regarding these proposals as well as the hearing
date and location were widely publicized throughout the Texas onion
industry. All interested persons were invited to attend the meetings
and the hearing and participate in deliberations on all issues. All
Committee meetings and the hearing were public forums and all entities,
both large and small, were provided the opportunity to express views on
these issues. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Thirty days is deemed appropriate because
these proposed changes have already been widely publicized and the
committee and industry would like to avail themselves of the
opportunity to implement the changes as soon as possible. All written
exceptions timely received will be considered and a grower referendum
will be conducted before these proposals are implemented.
Paperwork Reduction Act
Current information collection requirements for part 959 are
approved by the Office of Management and Budget (OMB) under OMB number
0581-0178, Vegetable and Specialty Crops. No changes in those
requirements as a result of this proceeding are anticipated. Should any
changes become necessary, they would be submitted to OMB for approval.
As with other similar marketing order programs, reports and forms
are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
Civil Justice Reform
The amendments to Marketing Order 959 proposed herein have been
reviewed under Executive Order 12988, Civil Justice Reform. They are
not intended to have retroactive effect. If adopted, the proposed
amendments would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act (7 U.S.C. 608c(15)(A)), any handler subject to an order may file
with the Department 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. A handler is afforded the opportunity for a
hearing on the petition. After the hearing, the 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 the
Department's ruling on the petition, provided an action is filed not
later than 20 days after the date of the entry of the ruling.
The findings hereinafter set forth are supplementary to the
findings and determinations which were previously made in connection
with the issuance of the marketing agreement and order; and all said
previous findings and determinations are hereby ratified and affirmed,
except insofar as such findings and determinations may be in conflict
with the findings and determinations set forth herein.
(1) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, and all of the terms and conditions
thereof, would tend to effectuate the declared policy of the Act;
(2) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, regulate the handling of onions grown
in the production area (designated counties in South Texas) in the same
manner as, and are applicable only to, persons in the respective
classes of commercial and industrial activity specified in the
marketing agreement and order upon which a hearing has been held;
(3) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, are limited in their application to the
smallest regional production area which is practicable, consistent with
carrying out the declared policy of the Act, and the issuance of
several orders applicable to subdivisions of the production area would
not effectively carry out the declared policy of the Act;
(4) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, prescribe, insofar as practicable, such
different terms applicable to different parts of the production area as
are necessary to give due recognition to the differences in the
production and marketing of onions grown in the production area; and
(5) All handling of onions grown in the production area as defined
in the marketing agreement and order, is in the current of interstate
or foreign commerce or directly burdens, obstructs, or affects such
List of Subjects in 7 CFR Part 959
Marketing agreements, Onions, Reporting and recordkeeping
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
Authority: 7 U.S.C. 601-674.
2. Section 959.23 paragraph (a) is revised to read as follows:
Sec. 959.23 Term of office.
(a) The term of office of committee members and their respective
alternates shall be for two years and shall begin as of August 1 and
end as of July 31. The terms shall be so determined that about one-half
of the total committee membership shall terminate each year. Committee
members shall not serve more than three consecutive terms. Members who
have served for three consecutive terms may not serve as members for at
least one year before becoming eligible to serve again. A person who
has served less than six consecutive years on the committee may not be
nominated to a new two-year term if his or her total consecutive years
on the committee at the end of that new term would exceed six years.
This limitation on the number of consecutive terms and years does not
apply to service on the committee prior to the enactment of this
provision and does not apply to alternates.
* * * * *
3. Revise paragraph (b) of Sec. 959.42 to read as follows:
Sec. 959.42 Assessments.
* * * * *
(b) Based upon the recommendation of the committee or other
available data, the Secretary shall fix a base rate of assessment that
handlers shall pay on all onions handled during each fiscal period.
Upon recommendation of the committee, the Secretary may also fix
supplemental rates on specified containers, including premium
containers, identified by the committee and used in the production
area: Provided, That any such supplemental assessment funds shall be
used, to the extent practicable, for projects and activities related to
the product upon which such assessments are collected.
* * * * *
4. Add a new paragraph (e) to Sec. 959.42 to read as follows:
Sec. 959.42 Assessments.
* * * * *
(e) If a handler does not pay assessments within the time
prescribed by the committee, the assessment may be increased by a late
payment charge and/or an interest rate charge at amounts prescribed by
the committee with approval of the Secretary.
5. Revise Sec. 959.48 to read as follows:
Sec. 959.48 Research and development.
The committee, with approval of the Secretary, may establish or
provide for the establishment of production research, marketing
research, development projects, and marketing promotion, including paid
advertising, designed to assist, improve, or promote the marketing,
distribution, consumption, or efficient production of onions. The
expenses of such projects shall be paid from funds collected pursuant
to Sec. 959.42.
6. In Sec. 959.84, redesignate paragraph (d) as paragraph (e) and
add a new paragraph (d) to read as follows:
Sec. 959.84 Termination.
* * * * *
(d) The Secretary shall conduct a referendum within six years after
the effective date of this paragraph and every sixth year thereafter to
ascertain whether continuance is favored by producers. The Secretary
would consider termination of this part if less than two-thirds of the
growers voting in the referendum and growers of less than two-thirds of
the volume of onions represented in the referendum favor continuance.
* * * * *
Dated: March 29, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-6234 Filed 4-5-07; 8:45 am]
BILLING CODE 3410-02-P