[Federal Register Volume 59, Number 217 (Thursday, November 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27759]


[[Page Unknown]]

[Federal Register: November 10, 1994]


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Part III





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 956




Sweet Onions Grown in the Walla Walla Valley of Southeast Washington 
and Northeast Oregon; Recommended Decision; Proposed Rule
DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Docket No. 94AMA-FV-956-1; FV93-956-1PR]

 
Sweet Onions Grown in the Walla Walla Valley of Southeast 
Washington and Northeast Oregon; Recommended Decision and Opportunity 
To File Written Exceptions to the Proposed Marketing Agreement and 
Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This recommended decision proposes the issuance of a marketing 
agreement and order for Walla Walla Sweet Onions in southern Washington 
and northeast Oregon. For the purposes of this document, the term 
``Walla Walla Sweet Onions'' refers to sweet onions grown in the 
proposed production area, which consists of designated parts of Walla 
Walla County, Washington, and designated parts of Umatilla County, 
Oregon. The proposed order and agreement would authorize production and 
marketing research and marketing development and promotion projects, 
including paid advertising, and would authorize container markings. The 
order would be administered by a ten-member committee consisting of six 
producer members, three handler members, and a public member. The order 
would be financed by assessments on handlers of Walla Walla Sweet 
Onions grown in the production area. A primary objective of this 
program would be to improve producer returns by strengthening consumer 
demand through various promotional activities and by reducing 
production and marketing costs through production and marketing 
research. Walla Walla Sweet Onion producers would vote in a referendum 
to determine if they favor issuance of the proposed marketing order.

DATES: Comments must be received by December 12, 1994.

ADDRESSES: Four copies of all comments should be sent to the Hearing 
Clerk, United States Department of Agriculture (USDA), Room 1079, South 
Building, Washington, D.C. 20250-9200. All written comments will be 
made available for public inspection at the Office of the Hearing Clerk 
during regular business hours.

FOR FURTHER INFORMATION CONTACT: Gary D. Olson, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, 1220 S.W. Third Avenue, Room 369, 
Portland, Oregon, 97204; telephone: (503)326-2724, FAX: (503)326-7440; 
or Robert F. Matthews, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, P.O. Box 96456, Room 2523-S, Washington, 
D.C. 20090-6456; telephone: (202)690-0464, FAX: (202)720-5698.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing, issued October 26, 1993, and published in the Federal 
Register on October 29, 1993 [58 FR 58105].
    This administrative 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.
    Preliminary Statement: Notice is hereby given of the filing with 
the Hearing Clerk of this recommended decision with respect to a 
proposed marketing agreement and order regulating the handling of sweet 
onions grown in the Walla Walla Valley of Southeast Washington and 
Northeast Oregon. This notice is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act of 1937, as amended [7 U.S.C. 
601-674], hereinafter referred to as the Act, and the applicable rules 
of practice and procedure governing the formulation of marketing 
agreements and marketing orders [7 CFR Part 900].
    The proposed Federal marketing agreement and order (order) were 
formulated on the record of a public hearing held at the Education 
Service District Building in Walla Walla, Washington, on November 15, 
1993. The hearing was held pursuant to the provisions of the Act. 
Approximately 25 witnesses, including Walla Walla Sweet Onion 
producers, handlers, and a Washington State University researcher, 
testified in support of the order. Proponents emphasized that Walla 
Walla Sweet Onion producers need a Federal marketing order to 
effectively compete with other sweet onion producing areas. No one 
present at the hearing testified in opposition to the proposed order. 
At the close of the hearing, January 15, 1994, was established as the 
date by which briefs, statements, and proposed corrections to the 
transcript were due. None were filed.
    The proponents testified that Walla Walla Sweet Onion producers, in 
order to remain competitive with other sweet onion producing areas, 
must conduct research and promotion programs to reduce production and 
marketing costs and increase sales. Such programs should include 
production and marketing research projects and promotion projects, 
including paid advertising.
    Testimony indicated that voluntary research and development efforts 
by the Walla Walla Sweet Onion industry have not been successful 
because of the lack of a coherent research and development plan with 
broad-based industry support. Also, a relatively small percentage of 
the U.S. onion crop is produced in the proposed production area in 
Walla Walla County, Washington, and Umatilla County, Oregon, and 
individual producers and handlers cannot implement an effective 
research, marketing development, and promotion program. By contrast, 
most other onion growing areas in the United States are large enough to 
convince private entities, such as seed companies, to conduct 
production research and developmental efforts with the result being new 
varieties specifically suited to those areas. Proponents believe that 
an industry-wide program is therefore necessary to enable the pooling 
of resources to address common problems. A single producer or even two 
or three producers cannot marshal the resources necessary to conduct 
effective research, marketing, and promotion programs.
    Small Business Consideration: In accordance with the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Administrator of the 
Agricultural Marketing Service considered the economic impact of this 
action on small entities. The record indicates that there are 
approximately nine handlers of Walla Walla Sweet Onions in the proposed 
production area and 50 producers. Small agricultural service firms have 
been defined by the Small Business Administration (SBA) (13 CFR 
121.601) as those whose annual receipts are less than $5,000,000, and 
small agricultural producers as those having annual receipts of less 
than $500,000. The majority of the handlers and producers may be 
classified as small entities.
    During the 1992 season, commercial shipments of Walla Walla Sweet 
Onions totaled about 390,000 hundredweight at an average f.o.b. price 
of $16.60 per hundredweight for a total value of $6,474,000. An 
indeterminate volume, probably about 10 percent, was sold at roadside 
stands. While there is a great variance in the size of individual 
handlers' operations, the record indicates that nearly all of the 
handlers that would be regulated under this order would qualify as 
small firms under the SBA's definition. Witnesses testified that 
because most of the producers and handlers of Walla Walla Sweet Onions 
are small, they are unable to individually finance the types of 
research and promotion efforts needed by the industry. A marketing 
order program would provide a means for these small entities to pool 
their resources and work together to solve their common problems. 
Witnesses testified that such action is necessary for this relatively 
small industry to remain profitable in the face of intense competition 
from larger industries.
    Acreage and supplies of Walla Walla Sweet Onions have declined in 
recent years, and proponents believe that the order would provide a 
much needed means of halting the drop in grower returns experienced in 
past seasons. This would be achieved by strengthening demand and 
developing new markets for existing supplies and encouraging increased 
production. Also, costs could be reduced through production research. 
Thus, the order would be expected to have a positive impact on producer 
returns.
    The order would authorize the collection of assessments from 
handlers of Walla Walla Sweet Onions grown in the designated parts of 
Walla Walla County, Washington, and Umatilla County, Oregon. Assessment 
funds would be used to finance production research projects that could 
reduce costs by reducing the occurrence of onion diseases, controlling 
plant pests, and developing varieties with more desirable flavor, 
quality, and size. Assessment funds could also be used to strengthen 
demand and expand markets for Walla Walla Sweet Onions through 
marketing research and development, and product promotion programs, 
including paid advertising. Projects to develop better methods of 
handling, shipping or storing onions, to explore additional or 
alternative uses of onions, to check nutritive values, and similar 
research are some examples of marketing research. Examples of marketing 
development projects include exploring marketing possibilities, 
contacting buyers, distributing educational material relating to the 
handling and marketing of onions, and the dissemination of the results 
of current or past marketing research projects.
    The order would be administered by a committee composed of Walla 
Walla Sweet Onion producers, handlers, and a public member nominated by 
growers and handlers and selected by the Secretary of Agriculture 
(Secretary). Daily administration of the order would be carried out by 
a staff hired by the committee. The order would not regulate the 
production of Walla Walla Sweet Onions and would place no restriction 
on the quality or quantity of Walla Walla Sweet Onions that could be 
handled.
    The principal requirements of the order that would affect handlers 
would be the requirements that they pay assessments on fresh market 
shipments of Walla Walla Sweet Onions to fund research and promotion 
programs and that container markings would be regulated. The amount of 
the assessment rate is not specified in the proposed order, but 
witnesses at the hearing indicated that an appropriate rate might be 
five cents per 50-pound bag for administrative costs; research and 
promotion costs could require an additional five to seven cents per bag 
or more. Any assessment rate to cover committee expenses that may be 
established would be recommended by the committee to the Secretary for 
approval.
    The order would also impose some reporting and recordkeeping 
requirements on handlers. Handler testimony indicated that the expected 
burden that would be imposed with respect to these requirements would 
be negligible. Most of the information that would be reported to the 
committee is already compiled by handlers for other uses and is readily 
available. In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR Part 1320) which implement the Paperwork Reduction 
Act of 1980 (44 U.S.C. Chapter 35) and section 3504(h) of that Act, the 
information collection and recordkeeping requirements that may be 
imposed by this order would be submitted to OMB for approval. Those 
requirements would not become effective prior to OMB approval. Any 
requirements imposed would be evaluated against the potential benefits 
to be derived and it is expected that any added burden resulting from 
increased recordkeeping would not be significant when compared to those 
anticipated benefits.
    Reporting and recordkeeping requirements issued under comparable 
marketing order programs impose an average annual burden on each 
regulated handler of about one hour with a two year record requirement. 
It is reasonable to expect that a comparable burden may be imposed 
under this order on the estimated nine handlers of Walla Walla Sweet 
Onions.
    The Act requires that prior to the issuance of an order, a 
referendum be conducted of affected producers to determine if they 
favor issuance of the order. The ballot material that will be used in 
conducting the referendum will be submitted to and approved by OMB 
prior to use. It is estimated that it would take an average of 10 
minutes for each of the approximately 50 Walla Walla Sweet Onion 
growers to participate in the voluntary referendum balloting. 
Additionally, it has been estimated that it would take approximately 
ten minutes for each of the nine handlers to complete the marketing 
agreement. In determining that the order would not have a significant 
economic impact on a substantial number of small entities, all of the 
issues discussed above were considered. The order provisions have been 
carefully reviewed and every effort has been made to eliminate any 
unnecessary costs or requirements. Although the order may impose some 
additional costs and requirements on handlers, it is anticipated that 
the order would help to strengthen demand for Walla Walla Sweet Onions. 
Therefore, any additional costs should be offset by the benefits 
derived from expanded markets and sales benefitting handlers and 
producers alike. Accordingly, it is determined that the order would not 
have a significant economic impact on a substantial number of small 
handlers or producers.
    Material Issues: The material issues presented on the record of the 
hearing are as follows:
    1. Whether the handling of Walla Walla Sweet Onions grown in the 
proposed production area is in the current of interstate or foreign 
commerce, or directly burdens, obstructs, or affects such commerce;
    2. Whether the economic and marketing conditions are such that they 
justify a need for an order which will tend to effectuate the declared 
policy of the Act;
    3. What the definition of the production area and the commodity to 
be covered by the order should be;
    4. What the identity of the persons and the marketing transactions 
to be regulated should be; and
    5. What the specific terms and provisions of the order should be, 
including:
    (a) The definition of terms used therein which are necessary and 
incidental to attain the declared policy and objectives of the order 
and the Act;
    (b) The establishment, composition, maintenance, procedures, powers 
and duties of a committee that would be the local administrative agency 
for assisting the Secretary in the administration of the order;
    (c) The authority to incur expenses and the procedure to levy 
assessments on handlers to obtain revenue for paying such expenses;
    (d) The authority to establish or provide for the establishment of 
production and marketing research and marketing development projects, 
including paid advertising;
    (e) The authority to establish regulations for container markings 
and safeguards for such regulations;
    (f) The establishment of requirements for handler reporting and 
recordkeeping;
    (g) The requirement of compliance with all provisions of the order 
and with any regulations issued under it, and
    (h) Miscellaneous provisions as set forth in Secs. 956.85 through 
956.96 of the Notice of Hearing published in the Federal Register of 
October 29, 1993 [58 FR 58105] which are common to all orders, and 
other terms and conditions published at Secs. 956.97 through 956.99 
that are common to marketing agreements only.
    Findings and Conclusions:
    The following proposed findings and conclusions on the material 
issues are based on the record of the hearing.
    1. The record indicates that the handling of Walla Walla Sweet 
Onions grown in designated parts of Walla Walla County, Washington, and 
designated parts of Umatilla County, Oregon, is in the current of 
interstate or foreign commerce or directly burdens, obstructs or 
affects such commerce. The proposed production area is discussed in 
material issue 3.
    The record evidence shows that in July 1989, 49 percent of the 
commercial shipments of Walla Walla Sweet Onions were marketed in 
Seattle, Washington. That percentage increased over the following four 
years, and, in 1993, 71 percent of the volume moved to outlets inside 
the State, the remaining 29 percent going to both eastern and western 
destinations outside Washington and Oregon. An indeterminate volume of 
Walla Walla Sweet Onions is sold within the proposed production area at 
roadside stands, and some are marketed throughout the United States. A 
negligible percentage of the crop is processed. The record indicates 
that no Walla Walla Sweet Onions are currently exported, but that they 
may be in the future.
    In addition to Seattle, the record indicates that other major 
markets for Walla Walla Sweet Onions include Chicago, Illinois, and San 
Francisco, California. USDA Market News reports show that these three 
markets accounted for about 12 percent of commercial shipments in June, 
July, and August of 1992. Walla Walla Sweet Onions also were marketed 
(in descending order of volume marketed) in Los Angeles, California; 
Atlanta, Georgia; Boston, Massachusetts; New York, New York; Baltimore, 
Maryland; Cincinnati, Ohio; St. Louis, Missouri; Dallas, Texas; Miami, 
Florida; Pittsburgh, Pennsylvania; and Detroit, Michigan.
    Record evidence shows that any handling of Walla Walla Sweet Onions 
in fresh market channels, including intrastate shipments, exerts an 
influence on all other handling of such onions and vice versa. 
Therefore, because such shipments directly burden, obstruct, or affect 
such commerce, all handling of Walla Walla Sweet Onions grown in the 
proposed production area should be covered by the order, and an order 
for Walla Walla Sweet Onions is supported by the evidence in the record 
of hearing.
    2. The record indicates that onions are grown in each of the 50 
States, but commercial production is concentrated in a few. There are 
three major seasonal groups of U.S. dry onions. They include spring 
onions produced mainly in Georgia, Texas, and California; summer non-
storage onions grown in New Mexico, Texas, and Washington; and summer 
storage onions produced mostly in Colorado, Idaho, Michigan, New York, 
Ohio, Oregon, Utah, Minnesota, Washington, and Wisconsin.
    The record also indicates that during its season, the Walla Walla 
Sweet Onion industry faces strong competition from other summer non-
storage onion suppliers. Two major competitors are New Mexico, which, 
in 1992 accounted for 74 percent of the summer non-storage crop, and 
the High Plains and Trans-Pecos areas of Texas, with 17 percent of the 
crop.
    The shipping season for Walla Walla Sweet Onions runs from late 
June through early August each year. About 23 percent of the volume 
moves in June, about 40 percent in July, and the remaining 37 percent 
is shipped in August.
    As is true with other commodities, sellers of onions conduct their 
businesses to obtain maximum returns for the product they have for 
sale. Handlers and other sellers therefore continually survey all 
accessible markets so that they may take advantage of the best possible 
prices available. Further, they constantly attempt to develop demand 
and seek new markets for their product. Likewise, onion buyers consider 
prices and availability of onions from all sources in making their 
purchasing decisions. Frequent market news reports of onion prices are 
available in shipping areas, and means of rapid communication are 
readily available. For these reasons, onion supplies and prices in any 
one location are promptly known elsewhere and have a direct effect on 
onion supplies and prices in other locations.
    Summer storage onions normally account for over half the U.S. dry 
onion crop. About 55 percent of the 1993 dry onion crop was summer 
storage compared to 59 percent in 1992. The two principal types of 
onions grown for the summer storage crop are globe and sweet Spanish 
type onions. Globe onions are the dominant type grown in the midwest 
and east and are not generally adaptable to production in the southern 
States. They tend to have a strong flavor, are firm to hard to the 
touch, and keep well under proper storage conditions. Spanish type 
onions are particularly well adapted to production in the western 
States. They are noted for their milder, sweeter flavor, but have a 
more limited storage life than globes. Onions grown in the northern 
States are harvested primarily in July and August, and the bulk of the 
crop is placed in storage. Marketing of the late-summer onion crop 
begins shortly after harvest and continues through the fall and winter 
and into the spring months.
    Spring non-storage onions rank second in seasonal importance. 
Production totaled eight million hundredweight in 1993, 14 percent of 
the U.S. total. Spring crop onions are grown primarily in the southern 
States and are principally of the Grano and Granex types. These types 
of onions are typically sweeter and milder than the globe type. 
Additionally, they are more tender and perishable than either the globe 
or Spanish type onion. Unlike the summer storage onion crop, the spring 
crop is marketed relatively soon after harvest. Major producers of the 
spring onion crop are California, Texas, Arizona, and Georgia.
    Summer non-storage production reached only 4.8 million 
hundredweight in 1993, but this was a record crop for summer non-
storage production; the 1992 crop was 4.3 million hundredweight.
    Testimony indicated that onions were first planted commercially in 
Walla Walla County, Washington, located in what is now known as the 
Walla Walla Valley around the year 1900. According to testimony, it was 
discovered that the unique growing conditions in this area of 
southeastern Washington and northeastern Oregon, particularly the low 
sulfur content of the soil, yielded a sweeter, milder onion than those 
grown elsewhere. In 1915, 500 carlots consisting of 300 100-pound sacks 
each were grown and shipped from the outskirts of Walla Walla.
    The record indicates that the majority of current commercial non-
storage onion production in Washington is in the Walla Walla Valley. 
Testimony shows that separate acreage, price, and production statistics 
are not available for the Walla Walla Valley alone, but also include 
other areas in Washington, such as the Tri-cities area, the Yakima 
Valley, and the Columbia River Basin. The record indicates that neither 
the National Agricultural Statistics Service (NASS) nor State reporting 
services for Washington and Oregon report separate statistics for Walla 
Walla Sweet Onions. Such statistics are grouped together as summer-non 
storage onions. Witnesses testified that Walla Walla Sweet Onion 
acreage is included in the total for Washington non-storage onions, so 
that any figure representing Walla Walla Sweet Onions is necessarily an 
estimate. Moreover, no statistical data are available for Umatilla 
County, Oregon, although one witness testified that perhaps 150 to 200 
acres of Walla Walla Sweet Onions may be grown. As reported by NASS, 
summer non-storage onions grown in Washington in 1980 totaled 780 
acres, increasing until 1988 when 1,600 acres were harvested. Since 
then, acreage has declined to 1,000 acres in 1992. Testimony was 
offered that Walla Walla Sweet Onion acreage has been declining at the 
rate of about 100 acres per year. Moreover, although harvested acreage 
in Washington for 1991 was reported as 900 acres, the record indicates 
that the total number of acres of sweet onions harvested in the Walla 
Walla Valley was as little as half that, the remaining acreage being in 
other areas in the State.
    Washington summer non-storage acreage currently accounts for about 
.71 percent of the U.S. annual total, and an estimated 9 percent of the 
summer non-storage crop. Washington accounts for less than a tenth of 
summer non-storage onion production, however, because Washington's 
acreage is much less than that of competing growing areas in New Mexico 
and Texas. The record indicates that the average yield for the 
Washington summer non-storage onion crop in 1992 was about 390 
hundredweight per acre. This compares with the average yield for all 
summer non-storage onions of 341 hundredweight per acre.
    Walla Walla Sweet Onion plantings begin about September 10 and end 
as late as October. The majority of growers attempt to have most of the 
crop planted by mid- to late-September. Since the growing season spans 
the winter months, freeze damage to Walla Walla Sweet Onions is a risk 
growers face each year. Harvest typically begins in the following June. 
Walla Walla Sweet Onions are shipped from June through August, with 
peak volume moving in July. Statistical data indicate that production 
of non-storage onions in Washington has risen in recent years, totaling 
29.7 million pounds in 1991, 39.0 million pounds in 1992, and 36.0 
million pounds in 1993.
    The record indicates that one weakness in current post harvest 
handling practices is storage life. Current produced varieties of Walla 
Walla Sweet Onions are highly perishable and cannot be stored for 
extended periods. Preliminary research has shown that the life of Walla 
Walla Sweet Onions can be extended by low temperature storage. 
Additionally, the identification of varieties with longer storage 
capability would benefit the industry.
    The record indicates that further extending the storage life of 
Walla Walla Sweet Onions has become a critical need of the industry, 
particularly in view of its competitive pressures. Witnesses testified 
that the relatively short life of Walla Walla Sweet Onions accentuates 
the industry's marketing risks by adding an urgency to move the produce 
quickly into wholesale and retail channels without regard to existing 
supplies and prices in those markets. The proposed order would 
authorize production research projects to address these problems.
    Season average prices for Washington summer non-storage onions 
decreased 31 percent to $16.60 per hundredweight in 1992. Prices 
reached a record high in 1991 at $23.90 per hundredweight. The 1992 
crop was valued at $6.5 million, which was an 8 percent decrease from 
the previous season. Monthly prices generally decrease during the peak 
harvesting in the State of Washington. There are no separate price data 
available for Umatilla County. However, given the small production 
area, such prices from the Walla Walla Valley area of Umatilla County 
should be similar to those of the adjacent area of Washington.
    Monthly prices received for Washington summer non-storage onions 
decreased 9 percent from June 1992, to August, 1992 ($17.50 per 
hundredweight to $16.00 per hundredweight). Prices for 1991 were 
considerably higher, beginning at $29.40 per hundredweight and ending 
at $20.00 per hundredweight. The five-year average non-storage onion 
prices in Washington (1988-1992) for the period June through August, 
respectively, was $20.94, $16.94, and $14.06 per hundredweight. This 
compared with total U.S. five-year non-storage onion average prices of 
$12.22, $14.20, and $12.16 per hundredweight for the same period. U.S. 
summer non-storage prices in June of 1992 were 37 percent lower than 
Washington summer non-storage prices during that period, but prices 
began to even out in August of 1992 at $16.00 per hundredweight for 
Washington summer non-storage onions and rose 23 percent to $15.80 per 
hundredweight for the U.S. total for non-storage onions.
    According to testimony, a major share of the Walla Walla Sweet 
Onion market is being lost to two major competitors, South Texas onions 
and those from Vidalia, Georgia. Onions grown in these areas are 
covered by Federal marketing order programs that fund promotion and 
advertising activities and, therefore, help to make buyers and 
consumers more aware of the favorable attributes of the onions.
    Marketing order programs for Idaho-Eastern Oregon onions regulate 
the handling of onions grown on approximately 17,600 acres; the South 
Texas program has about 14,200 acres; and the Vidalia program covers 
about 8,000 acres. The industry believes that a research and promotion 
program is necessary to expand Walla Walla markets.
    Witnesses attributed the recent downward trend in Walla Walla Sweet 
Onion prices in part to increasing competitive pressures from other, 
larger onion growing areas. Testimony indicated that while the Walla 
Walla Sweet Onion is considered unique in its sweetness, other areas 
have or are developing sweet varieties of onions to capitalize on the 
strong consumer demand for sweet onions. For example, the South Texas 
onion industry has funded, through a Federal marketing order, varietal 
research to develop an onion variety with the desired characteristics 
of being mild tasting and sweet. This variety, called the Texas Grano 
1015 Y, has been actively promoted. The record indicates that the South 
Texas onion industry budgeted funds for research and market development 
activities through its marketing order. Additionally, handlers in Idaho 
and Eastern Oregon, also under a Federal marketing order program, 
budgeted funds during the same period for promotion and research of its 
sweet Spanish onion. Witnesses attributed the success these other 
growing areas have had to their ability to pool available resources 
under their respective marketing orders. Proponents testified that the 
research and promotion activities conducted by competitors have 
assisted those competing industries in developing and promoting sweeter 
onion varieties that are challenging the Walla Walla Sweet Onion for 
its share of the onion market. It is believed that a similar program is 
necessary for Walla Walla Sweet Onions to remain profitable in this 
competitive industry.
    The record indicates that most Northwest residents are familiar 
with the taste and origin of the Walla Walla Sweet Onion. The record 
also indicates that they are aware of its unique flavor characteristics 
and are loyal customers. However, as the Walla Walla industry has 
grown, the development of new markets has become necessary. Testimony 
demonstrated the need to differentiate the Walla Walla Sweet Onion from 
other onions available in the marketplace to garner customer loyalty in 
markets located outside Washington and Oregon.
    The record indicates that most Walla Walla Sweet Onion growers and 
handlers are not sufficiently large to finance promotion and research 
programs on an individual basis. In addition, public funds to finance 
such projects are scarce. Heretofore, the Walla Walla Sweet Onion 
industry has attempted to operate and fund research and development 
projects under voluntary programs. Eventually, these programs ceased to 
operate because of inadequate support and financing. Witness testimony 
unanimously supported a marketing order program to be financed by all 
handlers, to strengthen consumer demand through promotion of the 
commodity and reducing costs through production research.
    Witnesses also testified that market research, in the form of data 
collection and analysis, would be an essential part of an overall 
marketing and promotion strategy. Currently, limited data is gathered 
with respect to Walla Walla Sweet Onions. To effectively promote and 
market Walla Walla Sweet Onions, proponents testified that additional 
knowledge of market conditions and access to complete data is necessary 
to make prudent decisions for focusing promotional efforts and 
promoting the efficient allocation of resources.
    The record indicates that many onions sold as Walla Walla Sweet 
Onions do not have the same mild flavor and other characteristics of 
Walla Walla Sweet Onions grown in the proposed production area. Several 
witnesses testified that often such onions were identified as Walla 
Walla Sweet Onions grown in other states or areas near the Walla Walla 
Valley. Testimony indicates that the growers of the Walla Walla Valley 
have spent time and effort attempting to market the Walla Walla Sweet 
Onion as one they believe has unique characteristics because of the 
area in which the onions are grown. These growers believe that such 
efforts have been offset by growers and handlers selling onions 
produced outside the proposed production area as Walla Walla Sweet 
Onions. Testimony indicated that 40 percent of the onions sold and 
described as Walla Walla Sweet Onions were grown outside the proposed 
production area and, therefore, were not true Walla Walla Sweet Onions.
    In summary, a number of problems were identified in the record that 
could be resolved through a marketing order that would enable the Walla 
Walla industry to work together collectively. Identifying varieties 
that have good seedling survival rate, a low susceptibility to cold 
damage, good eating quality, and increased storage capability would add 
stability to the supply and quality of the Walla Walla Sweet Onion 
crop, and could increase yields and reduce costs. The marketing order 
program could assist handlers in solving mutual post harvest handling 
problems, in the interest of increasing the quality of their offerings, 
reducing costs and increasing returns. Finally, authorizing industry 
financing of promotion and advertising programs would enable the 
industry to increase consumer awareness of its unique commodity, 
strengthen demand and increase sales.
    In view of the foregoing, it is concluded that there is a need for 
a marketing order for Walla Walla Sweet Onions grown in designated 
parts of Washington and Oregon. The order would meet many of the needs 
of the industry and would tend to effectuate the declared policy of the 
Act.
    3. A definition of the term ``production area'' should be included 
in the order to delineate the area in which Walla Walla Sweet Onions 
must be grown before the handling thereof is subject to the marketing 
order. Such term should include designated parts of Walla Walla County, 
Washington, and Umatilla County, Oregon.
    The area defined in the proposed order comprises what is generally 
recognized as the Walla Walla Valley of Washington and Oregon. The 
counties included are contiguous and share essentially the same 
growing, harvesting and marketing conditions with respect to Walla 
Walla Sweet Onions. While production of Walla Walla Sweet Onions is 
currently concentrated in the two counties of Walla Walla and Umatilla, 
onions of all types are grown throughout the proposed production area, 
as well as adjacent areas.
    At the hearing, a witness proposed revising the definition of 
production area appearing in the Notice of Hearing to include an area 
north of the Touchet River in Washington. However, testimony indicated 
that this area is dry land of a different soil type. Further, it does 
not have a history of Walla Walla Sweet Onion production, so that 
onions produced there may not have the same quality attributes as 
others from the proposed production area. The area as defined accounts 
for much of the current sweet onion acreage in Washington and Oregon 
and, according to record evidence, is generally recognized by the onion 
trade and consumers as comprising the Walla Walla Sweet Onion region of 
Washington and Oregon. This is because of the unique soil and growing 
conditions in the highly localized area. Furthermore, the production 
area as defined in the marketing order is the smallest practicable 
geographic area to which the order should be applied, consistent with 
carrying out the declared policy of the Act.
    The term ``Walla Walla Sweet Onion'' should be defined to specify 
the commodity covered by the proposed order and to which the terms and 
provisions of the marketing order would be applicable. The record 
indicates that a ``Walla Walla Sweet Onion'' may be any of a number of 
onion varieties grown in the production area, rather than one specific 
variety of onion. However, testimony indicated that onions acquire 
special characteristics when grown in the proposed production area. 
This is due in part to the low sulfur content of the soil. Further, 
according to testimony, the term ``Walla Walla Sweet Onion'' has a 
specific meaning in the onion trade, and consumers perceive Walla Walla 
Sweet Onions as a unique commodity distinct from other onions. For 
these reasons, the term ``Walla Walla Sweet Onion'' should be defined 
to mean all varieties of the genus and species Allium cepa, except 
sweet Spanish types, grown in the proposed production area.
    To provide for the possibility that other types of onions that have 
characteristics similar to what is now known as the ``Walla Walla Sweet 
Onion'' may be grown in the production area in the future, the 
committee should be authorized, upon approval of the Secretary, to add 
those types of onions to the types included under the term ``Walla 
Walla Sweet Onion.'' This would be accomplished through informal 
rulemaking procedures.
    The definition should include dry onions, onions grown for 
transplanting, and salad onions. The definition in the order as 
originally proposed also included onion seed. However, testimony 
indicated that regulating seed was not necessary, as the intent of the 
proponents is to define Walla Walla Sweet Onions as only those sweet 
onions grown in the production area. Accordingly, if onions are grown 
outside the proposed production area from seed produced within that 
area, the resulting onions would not be true Walla Walla Sweet Onions. 
Testimony indicated that this is because of the soil and climate unique 
to the Walla Walla River Valley, comprising designated parts of Walla 
Walla County, Washington, and Umatilla County, Oregon. Accordingly, the 
term ``seeds'' should not be included in the proposed definition of 
Walla Walla Sweet Onions.
    4. The term ``handler'' is synonymous with the term ``shipper'' and 
should be defined to identify the persons who would be subject to 
regulation under the order. Such term should apply to any person, 
except a common or contract carrier transporting Walla Walla Sweet 
Onions owned by another person, who first performs any of the 
activities within the scope of the term ``handle'' as hereinafter 
defined. The definition identifies persons who would be responsible for 
meeting the requirements of the order, including paying assessments and 
submitting reports.
    Common or contract carriers transporting Walla Walla Sweet Onions 
owned by another person would not be considered as handlers, even 
though they transport Walla Walla Sweet Onions, because such carriers 
do not have control over the Walla Walla Sweet Onions being 
transported. Nor are they the persons who cause the introduction of 
such Walla Walla Sweet Onions into the stream of commerce. The only 
interest of a common or contract carrier in such Walla Walla Sweet 
Onions is to transport them for a service charge to destinations 
determined by others.
    Growers who handle their own Walla Walla Sweet Onions or Walla 
Walla Sweet Onions grown by others would be considered handlers under 
the order. Any person who purchases Walla Walla Sweet Onions from 
growers and performs any other handling function such as grading and 
packing such Walla Walla Sweet Onions would be a handler.
    The term ``handle'' should be defined in the order to establish the 
specific functions that would place Walla Walla Sweet Onions in the 
current of commerce within the production area or between the 
production area and any point outside thereof, and to provide a basis 
for determining which functions are subject to regulation under 
authority of the marketing order. ``Handle'' and ``ship'' are used 
synonymously and the definition should so indicate.
    The record indicates that the term ``handle'' should include the 
acts of packaging, loading, transporting or selling Walla Walla Sweet 
Onions. However, the term ``handle'' should not include the 
transportation, sale or delivery of field-run Walla Walla Sweet Onions 
to a handler within the production area or to a handler outside the 
production area but within Walla Walla County, Washington, or Umatilla 
County, Oregon, to have such onions prepared for market. In this case, 
the onions have not yet been prepared for market nor are they in their 
existing condition being transported to market. Most sellers and buyers 
do not consider them as yet suitable or appropriate for commercial 
transactions and, as such, they have not yet entered the stream of 
commerce.
    Walla Walla Sweet Onion producers sometimes market their Walla 
Walla Sweet Onions themselves. In such cases, those growers would be 
the first handlers of Walla Walla Sweet Onions and would be responsible 
for paying assessments and complying with other order requirements.
    5.(a) Certain terms should be defined for the purpose of 
designating specifically their applicability and limitations whenever 
they are used in the order. The definition of terms discussed below is 
necessary and incidental to attain the declared policy and objectives 
of the order and Act.
    ``Secretary'' should be defined to mean the Secretary of 
Agriculture of the United States, or any officer, or employee of the 
United States Department of Agriculture who has been or who may be 
delegated the authority to act for the Secretary.
    ``Act'' should be defined to mean the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674). This is the 
statute under which the proposed regulatory program would be operative, 
and this definition avoids the need to refer to the citation throughout 
the order.
    ``Person'' should be defined to mean an individual, partnership, 
corporation, association, or any other business unit. This definition 
is the same as that contained in the Act and insures that it has the 
same meaning in the order as it has in the Act.
    The term ``registered handler'' should be defined to mean a person 
who is a handler with adequate facilities for procuring and sorting, 
grading, packaging, and performing any other handling function or who 
is a handler with access to such facilities. This provision would 
require all Walla Walla Sweet Onion handlers to register with the 
committee after meeting certain qualifications. Some handlers may have 
grading and storage facilities outside of the production area. Handler 
registration would aid the committee in determining compliance with 
order requirements. Registration also would enable the committee to 
obtain the necessary information to levy assessments.
    No testimony was presented concerning the actual method of 
registration. However, based on similar orders using handler 
registration the committee should be authorized to recommend, for 
approval of the Secretary, procedures with respect to handler 
registration. This provision has been added to the definition of 
registered handler.
    The term ``container'' should be defined as a box, bag, crate, 
hamper, basket, package, or any other receptacle used in packaging, 
transporting, sales, shipment, or other handling of Walla Walla Sweet 
Onions. It is necessary to define the term since it may be used 
throughout the proposed order and any rules established thereunder.
    The term ``producer'' should be synonymous with ``grower'' and 
should be defined to identify those persons who are eligible to vote 
for, and serve as, producer members and alternate producer members on 
the committee and those who may vote in any referendum. The term should 
mean any person engaged in a proprietary capacity in the production of 
Walla Walla Sweet Onions for market within the production area. Each 
business unit (such as a corporation or partnership) should be 
considered a single producer and should have a single vote in 
nomination proceedings and referenda. The term ``producer'' should 
include any person who owns or shares in the ownership of Walla Walla 
Sweet Onions such as a landowner landlord, tenant, or sharecropper. A 
person who owns and farms land resulting in that person's ownership of 
the Walla Walla Sweet Onions produced on such land should be considered 
a producer. The same is true with respect to a person who rents and 
farms land resulting in that person's ownership of all or part of the 
Walla Walla Sweet Onions produced on that land.
    Likewise, any person who owns land which that person does not farm, 
but as rental for such land obtains the ownership of a portion of the 
Walla Walla Sweet Onions produced thereon, should be regarded as a 
producer for that portion of the Walla Walla Sweet Onions received as 
rent. The tenant on such land should be regarded as a producer for the 
remaining portion produced on such land.
    A joint venture is one whereby several persons contribute resources 
to a single endeavor to produce and market a Walla Walla Sweet Onion 
crop. In such venture, one party may be the farmer who contributes one 
or more factors such as labor, time, production facilities or cultural 
skills, and the other party may be a handler who contributes money and 
cultural, harvesting, and marketing supervision. Normally, a husband 
and wife operation would be considered a partnership. Any individual, 
partnership, family enterprise, organization, estate, or other business 
unit currently engaged in the production of Walla Walla Sweet Onions 
for market would be considered a producer under the order, and would be 
entitled to vote in referenda and committee nominations. Each party 
would have to have title to at least part of the crop produced, 
electing its disposition, and receiving the proceeds therefrom. This 
control could come from owning and farming land producing Walla Walla 
Sweet Onions, payment for farming services performed, or a landlord's 
share of the crop for the use of the producing land. A landlord who 
only receives cash for the land would not be eligible to vote. A 
business unit would be able to cast only one vote regardless of the 
number and locations of its farms, but each separate legal entity would 
be entitled to vote.
    A number of producers in the production area own or operate packing 
sheds. A producer who owns or operates a packing shed should not be 
precluded from qualifying as a producer under the order.
    The term ``Varieties'' should mean all classifications, 
subdivisions, or types of Walla Walla Sweet Onions that are commonly 
recognized by the trade and officially recognized by the U.S. 
Department of Agriculture or recommended by the committee and approved 
by the Secretary.
    Testimony indicated that only Walla Walla Sweet Onions or 
subdivisions or varieties thereof would be subject to any regulations 
issued pursuant to the proposed order, and that varieties of onions 
grown in the production area not possessing characteristics of Walla 
Walla Sweet Onions would not be included. Varieties not included would 
include hybrid varieties of the sweet Spanish storage type onion.
    The term ``Committee'' should be defined to mean the administrative 
agency known as the Walla Walla Sweet Onion Committee established under 
the provisions of the order. Such a committee is authorized by the Act, 
and this definition is merely to avoid the necessity of repeating the 
full name each time it is used.
    The term ``fiscal period'' should be defined to mean the annual 
period for which the committee would plan the use of its funds. This 
period should be established to allow sufficient time prior to the time 
Walla Walla Sweet Onions are first shipped for the committee to 
organize and develop its budget for the ensuing season. However, it 
should also be set to minimize the incurring of expenses during a 
fiscal period prior to the time assessment income is available to 
defray such expenses.
    The Notice of Hearing proposed that ``fiscal period'' mean the 12-
month period beginning June 1 and ending the following May 31. Record 
evidence indicates that the harvesting and marketing cycle for Walla 
Walla Sweet Onions grown in the production area begins in June and ends 
in August. The fiscal period should coincide with the Walla Walla Sweet 
Onion crop year, because the industry typically plans its operation on 
this basis. Hearing testimony supported the fiscal period being 
established for a 12-month period beginning June 1 and ending May 31 of 
the next year.
    However, based on future experience, it may be desirable to 
establish a fiscal period other than one ending on May 31. Thus, 
authority should be included in the order to provide for the 
establishment of a different fiscal period if recommended by the 
committee and approved by the Secretary through informal rulemaking 
procedures. In any event, the beginning date of any new fiscal period 
should be sufficiently in advance of the harvesting season to permit 
the committee to formulate its marketing policy and perform other 
administrative functions. Also, it should be recognized that if at some 
future date there is a change in the fiscal period, such change would 
result in a transition period.
    (b) Pursuant to the Act, it is desirable to establish an agency to 
administer the order locally as an aid to the Secretary in carrying out 
the declared policy of the Act and to provide for effective and 
efficient operation of the order. As proposed in Sec. 956.20, the Walla 
Walla Sweet Onion Committee should therefore be established and consist 
of ten members, including one public member. The record indicates that 
a committee composed of ten members, with a like number of alternates, 
would provide adequate representation and would provide for reasonable 
judgment and deliberation with respect to recommendations made to the 
Secretary, and in the discharge of other committee duties.
    Since the order is intended to primarily benefit Walla Walla Sweet 
Onion producers, it is appropriate that the committee be comprised 
primarily of growers. Six of the ten committee members should therefore 
be Walla Walla Sweet Onion growers. Since the program would be financed 
by handlers, and handlers would be responsible for complying with the 
terms of the marketing order, however, it would be reasonable to 
provide for handler representation on the committee as well. For this 
reason, proponents proposed that, of the ten members on the committee, 
three of those members should be handlers.
    The record indicates that producer members and their alternates 
should be selected from the production area at large. Since the 
production area is relatively small, this method should be adequate to 
ensure equitable representation on the committee. The record indicates 
that Walla Walla Sweet Onion production is currently located in Walla 
Walla County in Washington, and Umatilla County in Oregon, which 
together account for all of the production.
    Hearing testimony indicated that the six persons selected to serve 
as grower members or alternates should be individuals who are 
producers, or officers or employees of producers. Persons selected to 
serve as handlers should be engaged in handling Walla Walla Sweet 
Onions. Such persons could be expected to have strong interests in the 
effects of committee decisions of Walla Walla Sweet Onion producers and 
handlers.
    To help ensure that the committee will not have a membership with 
partiality toward a single handling entity, the proposal also contains 
a provision that, at the time of selection, no more than two producer 
members may be affiliated with the same handler.
    Testimony indicates that a producer member should have at least 
three years experience in the production of Walla Walla Sweet Onions. 
The proponents believe that because committee membership is a heavy 
responsibility requiring a high degree of individual initiative for 
what is done and how it is done, and cultural practices for Walla Walla 
Sweet Onions are diverse, it would take three years of experience 
producing Walla Walla Sweet Onions in order to become knowledgeable 
about the industry.
    At the hearing, witnesses supported adding a public member to the 
committee. While the influence of consumers would be implicitly present 
in the deliberations of the producer and handler committee members, and 
all meetings would be public, the appointment of a public member would 
offer many advantages. One would be direct communication between 
industry members and the public member, who would have no connection 
with the industry and whose opinions would afford the industry an 
opportunity to discuss its problems and concerns with someone who would 
view these problems and concerns from outside the Walla Walla Sweet 
Onion industry.
    The public representative and that person's alternate should not be 
permitted to have a direct financial interest in the production, 
processing, financing, buying, packing, or marketing of Walla Walla 
Sweet Onions except as a consumer, nor be a director, officer, or 
employee of any firm so engaged. Such public representatives should be 
able to devote sufficient time and express a willingness to attend 
committee activities regularly and to familiarize themselves with the 
background and economics of the industry.
    Proposed Sec. 956.25 states that each member of the committee, 
including the public member, should have an alternate. This would 
ensure that all portions of the production area are adequately 
represented in the conduct of the committee's business and that the 
continuity of operation is not interrupted. The order should provide 
that alternate members should meet the same qualifications as their 
respective members, except for tenure and growing experience. They 
would act in the place and stead of their respective members during 
temporary absences. In the case of the death, removal, resignation, or 
disqualification of a member, the alternate should serve as member 
until a new member is selected and has qualified.
    Proposed Sec. 956.21 states that, with the exception of initial 
members, the term of office of committee members and their respective 
alternates should be for three years and should begin on June 1 and end 
on May 31, or for such other three year period as the committee may 
recommend and the Secretary approve. The record indicates that the term 
of office should begin on June 1 because that is considered the 
beginning of the Walla Walla Sweet Onion crop year. The Walla Walla 
Sweet Onion shipping season generally ends in August and work begins 
again in September when growers begin seeding for the next year's crop. 
At that point in time, it can be determined which growers have remained 
in business and qualify to serve on the committee.
    A three-year term would be appropriate because it would give 
members sufficient time to become familiar with committee operations 
and enable them to make meaningful contributions at committee meetings. 
Furthermore, a three-year term would enable establishment of a rotation 
so that approximately one-third of the committee membership would 
terminate each year. Staggered terms would lend continuity to the 
committee by insuring that some experienced members would be on the 
committee at all times. Therefore, the order should provide that the 
terms shall be determined so that approximately one-third of the total 
committee membership terminates each year.
    The Notice of Hearing proposed that the term of office for initial 
members and alternates should be established so that one-third of the 
initial producer and handler members and alternates would serve for a 
one-year term, one-third would serve for a two-year term, and one-third 
would serve for a three-year term. Since there would be only one public 
member, there is no need to provide for staggering that membership; the 
initial public member should serve a three-year term of office.
    The effective date of the order, if issued, may not coincide with 
the specified beginning date of the terms of office of committee 
members and alternates. Therefore, a provision is necessary to adjust 
the initial terms of office. To accomplish this, the order should 
provide that the terms of office of the initial members and alternates 
shall begin as soon as possible after the effective date of the order.
    In the event that the initial members are selected prior to June 1, 
1995, an example of how the initial terms of office could be adjusted 
is as follows: the initial one-year term would not end on May 31, 1995, 
but would continue until May 31, 1996. Similarly, the two-year and 
three-year terms would end on May 31, 1997, and 1998, respectively. For 
the purposes of applying the tenure requirements of the proposed order, 
each of these initial terms would be considered as a one-year, a two-
year, or a three-year term even though the actual period of the 
appointment may be several months longer.
    To prevent unnecessary vacancies from occurring on the committee, 
the order should provide that members and alternates shall serve in 
such capacity for the term of office, or portion thereof, for which 
they are selected and have qualified, and until their respective 
successors are selected. However, so that there is a continual turnover 
in membership and infusion of new ideas, the order should provide that 
no member, including the public member, may serve more than two 
consecutive terms on the committee unless specifically exempted by the 
Secretary. After serving two consecutive terms, a committee member 
should be eligible to serve as an alternate, but should be ineligible 
to serve as a member for a period of one year. These tenure 
requirements should not apply to alternate members.
    Testimony indicates that there should be no tenure restriction on 
alternate members. The proponents believe that establishing a maximum 
of two three-year terms for alternate members would serve no useful 
purpose, but potentially could limit the pool of candidates for full 
committee membership. Testimony also indicates that producers with less 
than three years experience growing Walla Walla Sweet Onions should be 
eligible for appointment to the committee as alternate members.
    To guard against the possibility of a position remaining vacant 
because of a lack of eligible nominees or persons eligible to serve, 
the Secretary should have the authority to except an individual from 
tenure limitation. Such an exception would be made in special and 
unusual circumstances. Limiting the tenure of committee membership as 
proposed would be in accordance with the Secretary's ``Guidelines for 
Fruit, Vegetable, and Specialty Crop Marketing Orders.''
    The order should provide that the Secretary shall have the 
authority to select members and alternates of the committee, but the 
Walla Walla Sweet Onion growers and handlers should have the 
responsibility for recommending nominees to the Secretary for selection 
under proposed Sec. 956.22. The nomination procedure outlined in the 
order would provide a means of making available to the Secretary the 
names of prospective members and alternates desired by the industry to 
serve on the committee.
    The record does not indicate how the initial committee should be 
nominated, but an often used method in such instances is for the 
Secretary to conduct a meeting to nominate initial industry committee 
members. All producers of record in the production area should receive 
notice of the meeting in sufficient time to enable them to attend. 
Nominations should be received and voted upon at these meetings. Those 
persons receiving the highest number of votes for each of the positions 
to be filled should be considered the nominee for that position. 
Handler nominations should be accomplished in the same way.
    The committee should be responsible for conducting subsequent 
nomination meetings, and providing notice to Walla Walla Sweet Onion 
producers and handlers of those meetings. The proposal in the Notice 
also provided that at least one nominee be submitted for each position 
for the Secretary's consideration. Proposed Sec. 956.22 provides that 
one nominee be designated for each member and alternate member position 
that is vacant or is about to become vacant. However, the Secretary 
would reserve the right to select any qualified candidate willing to 
serve.
    Testimony indicates that it would be desirable to hold nomination 
meetings in conjunction with other industry meetings, such as a 
shipper's association, grower's association, or Extension Service 
meetings. Such a procedure would encourage higher attendance at the 
meetings.
    Meetings held for nominating members and alternates of subsequent 
committees should be held no later than April 1 of each year or such 
other date as the committee may recommend and the Secretary may 
approve. Inasmuch as the term of office would begin June 1 of each 
year, nomination meetings should be held in sufficient time to assure 
that appointments may be made prior to the beginning of each new term 
of office.
    Nominations should be submitted in such manner and form as the 
Secretary may prescribe. One nominee should be designated for each 
position that is to be filled the following June 1. Sufficient 
information about each nominee should be provided so the Secretary can 
determine if such person is qualified for the position for which 
nominated.
    Only Walla Walla Sweet Onion producers should participate in 
designating nominees for producer members and alternates. Only Walla 
Walla Sweet Onion handlers would be entitled to vote for handler 
members. If a person both produces and handles Walla Walla Sweet 
Onions, such person may vote either as a producer or a handler, but not 
both. Each eligible person should be allowed to cast only one vote in 
the nomination process for each member and alternate member position 
that is to be filled.
    Provisions also should be made for the nomination and selection of 
a public member and alternate. The record indicates that nominees for 
the public member and alternate should be selected by the industry 
members of the committee every three years at the first meeting 
following the selection of the current committee. The names of the 
nominees would then be forwarded to the Secretary for selection.
    The order should provide that the members of the committee should 
be selected by the Secretary from persons nominated or from among other 
qualified persons, in accordance with proposed Sec. 956.23. In the 
event nominations are not made within the time and in the manner 
specified in the order, the Secretary may select members and alternates 
without regard to nominations, in accordance with proposed Sec. 956.27. 
Such selection should be from qualified persons as provided in the 
order. Each person to be selected by the Secretary as a member or as an 
alternate member of the committee should, prior to selection, qualify 
by advising the Secretary that such person agrees to serve in the 
position for which nominated.
    Proposed Sec. 956.26 states that the order should provide a method 
for promptly filling any vacancies on the committee for unexpired terms 
of office. There may be vacancies caused by the death, removal, 
resignation, or disqualification of a member or alternate. The order 
should provide that the Secretary should name a successor to fill an 
unexpired term from nominations made in the same manner as provided for 
nominating all other members and alternates. Any nomination meetings 
for filling vacancies should be held within a reasonable amount of time 
after a vacancy occurs.
    In order to avoid holding meetings and electing nominees when other 
nominees acceptable to the Walla Walla Sweet Onion industry are before 
the Secretary, the selection of members from nominees previously 
submitted but not selected should be permitted. This would allow, for 
example, the Secretary to appoint a person who received the second 
highest number of votes at the last nomination meeting for the position 
that has become vacant.
    As set forth in proposed Sec. 956.28, the order should specify a 
procedure for the committee to conduct its meetings. It should provide 
that a majority of all members of the committee is necessary to 
constitute a quorum and to pass any motion or approve any committee 
action. However, any action made pursuant to proposed Sec. 956.61 
pertaining to recommendations for regulations, would require seven 
concurring votes. Accordingly, six members of the ten-member committee 
must be present in order to constitute a quorum and enable the 
committee to conduct a meeting. At least six affirmative votes should 
be required to pass any motion or approve any committee action, except 
when dealing with recommendations for regulations, which would require 
at least seven. The evidence of record is that at least seven committee 
members should be required to concur on any recommendations pertaining 
to the imposition of container marking requirements because more is 
needed to protect minority interests while at the same time allowing 
majority rule. A simple majority would be sufficient for 
recommendations on other activities authorized under the marketing 
order, i.e., recommendations on production and marketing research and 
marketing development and promotion projects, including paid 
advertising, and the financing of these activities through handler 
assessments and voluntary contributions.
    There may be times when it will be impossible to assemble the 
committee promptly to meet an emergency situation. Therefore, the order 
also should enable committee members, and alternates when acting as 
members, to vote by mail, telegraph, telephone, facsimile, or other 
means of communication, provided that any vote cast orally be confirmed 
promptly in writing. If an assembled meeting is held, all votes should 
be cast in person, to ensure that the person voting on a motion or 
committee action hears both sides of the question before taking such 
action. The majority, quorum, and voting requirements should still 
apply when voting by mail, telegraph, telephone, facsimile, or other 
means of communication.
    Committee members and alternates will necessarily incur some 
expense while on committee business. Reasonable expenses, which may 
include travel, meals and lodging, should be reimbursed to members 
while attending committee meetings or performing other duties under the 
order, in accordance with proposed Sec. 956.29. Therefore, the order 
should provide that members, and alternates when serving as members of 
the committee, should serve without compensation but shall be 
reimbursed for such expenses authorized by the committee and 
necessarily incurred by them in attending committee meetings and in the 
performance of their duties under the order. Testimony indicates that 
it should be at the discretion of the committee to pay expenses of 
alternate members who are requested to attend meetings regardless of 
whether their respective members are present.
    The committee, under proposed Sec. 956.30, should be given those 
specific powers that are set forth in section 608c(7)(C) of the Act. 
Such powers are granted by the enabling statutory authority and are 
necessary for an administrative agency, such as the Walla Walla Sweet 
Onion Committee, to carry out its proper functions. It would be 
necessary for the committee to adopt rules and regulations, prescribe 
the terms on which applications or information is to be filed, and to 
set up procedural rules to administer this part. The committee also 
should have the power to investigate complaints of violations to the 
order and forward such information to the Secretary, and to recommend 
to the Secretary appropriate amendments to this part.
    The committee's duties as set forth in Sec. 956.31 of the proposed 
order are necessary for the discharge of its responsibilities. These 
duties are similar to those typically specified for administrative 
agencies under other programs of this nature. They pertain to specific 
activities authorized under the order, such as investigating and 
compiling information regarding Walla Walla Sweet Onion marketing 
conditions, and to the general operation of the order including hiring 
employees, appointing officers, and keeping records of all committee 
transactions. It is proposed that the marketing order delineate 
committee duties as follows:
    (1) At the beginning of each fiscal period, or as soon thereafter 
as practicable, the committee should hold an organizational meeting at 
which a chairman and such other officers as may be necessary would be 
selected, any necessary subcommittees should be appointed, and such 
rules and regulations for the conduct of business should be adopted as 
may be advisable.
    (2) The committee should act as intermediary between the Secretary 
and producers and handlers of Walla Walla Sweet Onions.
    (3) Any available information requested by the Secretary should be 
furnished by the committee.
    (4) The committee should appoint such employees, agents, and 
representatives as it may deem necessary, and determine salaries, 
benefits, and duties for each such persons.
    (5) At such times as may be necessary, the committee should 
investigate and assemble data on the growing, harvesting, shipping, and 
marketing conditions of Walla Walla Sweet Onions. Furthermore, upon 
approval of the Secretary, the committee should engage in research and 
service activities that relate to the production, handling, or 
marketing of Walla Walla Sweet Onions.
    (6) The committee should keep minutes, books, and records which 
clearly reflect all of its acts and transactions. These minutes, books, 
and records would be subject to examination at any time by the 
Secretary or an authorized agent or representative of the Secretary.
    (7) The committee should ensure that its voting record on 
recommended regulations and other matters are available to producers 
and handlers.
    (8) Prior to the beginning of each fiscal period, the committee 
should submit to the Secretary a budget of its proposed expenses for 
such fiscal period along with a recommendation for the assessment rate 
for such period.
    (9) The committee should have its books audited by a competent 
independent accountant at least once each fiscal period, and at such 
other times as the committee may find necessary or as the Secretary may 
request. The audit report should show the receipt and expenditures of 
funds collected pursuant to this part. A copy of this report should be 
made available to the Secretary, as well as at the principal office of 
the committee for inspection by handlers and producers. Confidential or 
proprietary information should be removed from the audit report before 
making it available to handlers and producers.
    (10) The committee should have the duty of consulting, cooperating, 
and exchanging information with other onion marketing committees, as 
well as with other individuals or agencies in connection with all 
proper committee activities and objectives under this subpart.
    The duties listed in proposed Sec. 956.31 are reasonable and 
necessary if the committee is to function in the manner prescribed 
under the Act and the order. It should be recognized that the duties 
specified are not necessarily all inclusive, and it may develop that 
there are other duties that the committee may need to perform which are 
incidental to, and not inconsistent with, these specified duties.
    (c) The committee should be authorized under Sec. 956.40 of the 
proposed order to incur such expenses as the Secretary finds are 
reasonable and likely to be incurred during each fiscal year. Such a 
provision is necessary to assure the maintenance and functioning of the 
committee, as well as to finance production research and market 
promotion programs. Necessary expenses would include, but would not be 
limited to, such items as employee salaries and benefits; establishment 
of an office and equipping such office; telephone and mail services; 
and business-related transportation for the committee staff. Expenses 
incurred by committee members in attending committee meetings should 
also be a reimbursable expense. All such expenses may be incurred on an 
ongoing basis.
    The committee, under proposed Sec. 956.41, should be required to 
prepare a budget showing estimates of income and expenditures necessary 
for the administration of the marketing order during each fiscal year. 
The budget, including an analysis of its component parts, should be 
submitted to the Secretary sufficiently in advance of each fiscal 
period to provide for the Secretary's review and approval. The 
submitted budget should include a recommendation to the Secretary of a 
rate of assessment designed to secure all or part of the income 
required for such fiscal year. The committee should be permitted to use 
reserve and other committee funds carried over from previous years, and 
voluntary contributions, to meet budget requirements as authorized 
under the order.
    The Act authorizes the Secretary to approve the incurring of 
expenses by the administrative agency established under an order and 
states that the order must contain provisions requiring handlers to pay 
their pro rata share of such expenses.
    The rate of assessment should be established by the Secretary on 
the basis of the committee's recommendation and other available 
information in accordance with proposed Sec. 956.42. In the event that 
an assessment rate is established which does not generate sufficient 
income to pay for the approved expenses, the committee should be 
authorized to recommend to the Secretary an increase in the rate of 
assessment in order to secure sufficient funds. The Secretary may 
approve an assessment rate increase, and such increase should be 
applicable to all Walla Walla Sweet Onions handled during the fiscal 
year to which that assessment rate applies.
    The order should provide for the payment of assessments by first 
handlers of Walla Walla Sweet Onions for the maintenance and 
functioning of the committee throughout the time the order is in 
effect, irrespective of whether particular provisions of the order are 
suspended or are inoperative. For example, adverse weather during a 
growing season could result in reduced supplies, and therefore, planned 
market support activities for the season could be canceled. The 
committee should be able to continue levying assessments to pay other 
approved expenses incurred for other purposes.
    If a handler does not pay any assessment by the date it is due, the 
order should provide that the late assessment may be subject to a late 
payment charge or an interest charge, or both, at rates set by the 
committee with the Secretary's approval. Such charges should be set at 
rates established to cover additional costs that may be incurred by the 
committee in attempting to collect overdue assessments, and should 
encourage timely payments. The period in which payments would be 
considered late, and late payment charges or interest charges incurred 
should be recommended by the committee and approved by the Secretary.
    The committee should be authorized to accept advance payment of 
assessments so that it may pay expenses which become due before 
assessment income is normally received. This would give the committee 
more flexibility in paying obligated expenses, particularly in the 
first part of a fiscal year before assessment funds are received.
    The committee should also be able to borrow money to meet 
administrative expenses that would be incurred before assessment income 
is sufficient to defray such expenses. However, the committee should 
not borrow money to pay obligations if sufficient funds already exist 
in the committee's reserve fund or in other committee accounts.
    All funds collected by the committee through assessments or any 
other provision of the order should be used only for the purposes set 
forth in the order, as set forth in proposed Sec. 956.43. The Secretary 
should at all times have authority to require the committee, its 
members and alternates, and its employees and agents to account for all 
receipts, disbursements, property or records of the committee for which 
such person has been responsible. Likewise, when any such person ceases 
to act in the aforesaid positions, that person should account for all 
receipts, disbursements, property or records of the committee for which 
such person has been responsible. In the event the order is terminated 
or becomes inoperative, the committee should appoint, with the approval 
of the Secretary, one or more trustees for holding records, funds or 
other property of the committee.
    If, at the end of a fiscal period, the assessments collected are in 
excess of expenses incurred, such excess should be established as a 
reserve or refunded pro rata to the handlers, under proposed 
Sec. 956.44. The committee should be authorized to carry over excess 
assessment income into the following fiscal period as a reserve. If 
such excess income is not carried over as a reserve, handlers should be 
entitled to a refund proportionate to the assessments each handler 
paid. The reserve should not be allowed to exceed approximately two 
years' of committee expenses.
    One purpose of the reserve fund would be to provide stability in 
the administration of the order in the case of a short crop. Also, 
establishing a reserve should minimize the necessity of the committee 
borrowing money at the beginning of a fiscal year or raising an 
assessment rate during a season of less than anticipated production.
    Finally, reserve funds could be used to cover necessary liquidation 
expenses in the event the order is terminated. Upon such termination, 
any funds not needed to defray liquidation expenses should be disposed 
of as determined by the Secretary. To the extent possible, however, 
these funds should be returned pro rata to the handlers from whom they 
were collected.
    Under proposed Sec. 956.45, for the payment of production research 
or promotional activities as authorized by the order, the committee 
should also be authorized to receive voluntary contributions. Testimony 
also indicated that contributions should be authorized for first-year 
administrative start-up costs. Such contributions should be received by 
the committee without any obligations to the donor, and the expenditure 
of such funds should be under the complete control of the committee and 
subject to the provisions of the order. The committee should not 
receive a voluntary contribution from any person if that contribution 
could represent a conflict of interest. Testimony indicates that 
donations should be considered as miscellaneous receipts, the same as 
interest or dividend income, and be subject to all of the accounting 
provisions of the order.
    (d) Under proposed Sec. 956.50, the order should authorize the 
committee to establish and provide for the establishment of production 
research, marketing research and development, and marketing promotion 
projects, including paid advertising, designed to assist, improve, or 
promote the marketing, distribution, consumption, or efficient 
production of Walla Walla Sweet Onions. Funding for these programs 
should come from any authorized receipts of the committee including 
assessment income, voluntary contributions and miscellaneous income 
such as interest.
    The committee should have the authority to initiate new production 
and marketing research projects, as well as to contribute to research 
which may currently be taking place.
    Testimony indicated that public funds for research are becoming 
scarcer and more difficult to obtain. Marketing order proponents 
believe that their industry needs to finance research on improved onion 
storage and cultural practices.
    The record also supports the need for marketing research and 
promotion projects. Research would enable the Walla Walla Sweet Onion 
industry to identify and analyze its current markets and find ways of 
expanding current markets and developing new ones.
    Expanding markets for Walla Walla Sweet Onions could be 
accomplished by promotional activities, including paid advertising, to 
acquaint wholesalers, retailers, and consumers with the product 
available from the Walla Walla area.
    Market development projects would enable the committee to compile 
meaningful market data and to explore marketing possibilities, such as 
how to gain entry to or recapture a specific market. That authority 
also would enable the committee to contact buyers and food editors to 
distribute educational material relating to the handling and marketing 
of Walla Walla Sweet Onions, and disseminate to the industry the 
results of current or past marketing research projects. It would also 
allow the committee to give out promotional literature, recipes, and 
information relative to consumption or use.
    Record testimony indicated that the committee should be authorized 
to develop and register a common identifying mark, or logo, that could 
be used by all Walla Walla Sweet Onion producers and handlers to 
distinguish the Walla Walla Sweet Onion in the marketplace. Proponents 
supported utilizing such a mark in conjunction with any paid 
advertising, to make the consumer aware that they are purchasing Walla 
Walla Sweet Onions. Witnesses supported advertising as a means of 
increasing demand for Walla Walla Sweet Onions.
    Walla Walla Sweet Onions have a very limited marketing season (June 
to early August) and prices customarily begin to decline rapidly over 
the season. Proponents believe an education and advertising campaign 
would help increase the public's awareness of this specialty onion with 
the objective of expanding the market and increasing consumption of 
Walla Walla Sweet Onions. Paid advertising with an identifying mark 
would assist in clarifying and maintaining the Walla Walla Sweet 
Onion's image in the marketplace in a way not available through other 
forms of promotion or publicity. Also, Walla Walla Sweet Onion 
producers face larger and better funded competition. Testimony 
indicates that paid advertising is necessary for the industry to be 
competitive and maintain or increase its market share. Testimony also 
indicates that advertising could have a positive influence on the 
demand for Walla Walla Sweet Onions, particularly in times of heavy 
supply, thereby tending to increase grower returns.
    Market promotion programs, including paid advertising, for Walla 
Walla Sweet Onions carried out with funds collected under the proposed 
program, would be generic in nature and would not use particular name 
brands, handler or producer names, or favor any particular portion of 
the production area. In addition, any promotional material or 
advertising would not be authorized to make false or unwarranted claims 
on behalf of Walla Walla Sweet Onions.
    Nor would such material be authorized to include statements that 
disparage other agricultural commodities.
    The record does not indicate the amount of assessment funds that 
may be allotted for research and promotion programs. The committee 
should have the responsibility to determine the amount of funds spent 
on each program each year. Such determination should be based on the 
needs of the industry each year. The amount of funds to be spent on 
research and promotion programs would be included in the annual budget 
required to be submitted to the Secretary for review and approval.
    All research and promotion projects to be conducted under the order 
in a given fiscal period should be submitted by the committee to the 
Secretary for approval prior to being undertaken. This will ensure that 
all projects are appropriate given the order's authority, and that 
sufficient funds will be available for their funding. Further, the 
committee should be required to report at least annually on the 
progress of each project and at the conclusion of each project. Such 
reports should be made to the Secretary.
    (e) In accordance with proposed Sec. 956.61, the committee should 
have the authority to recommend regulations to the Secretary, whenever 
it believes that regulations issued pursuant to proposed Sec. 956.62 
regarding container markings would be appropriate. Also, the committee 
should be authorized to recommend to the Secretary the amendment, 
modification, termination, or suspension of any regulation issued under 
this part, when deemed necessary. The committee should also be 
permitted to recommend modification, termination, or suspension of any 
regulation or amendment thereto to facilitate the handling of Walla 
Walla Sweet Onions for special purpose handling pursuant to proposed 
Sec. 956.63, regarding handling for specified purposes.
    The committee should have the authority to recommend to the 
Secretary rules and regulations for fixing the markings of the 
containers used in the packaging and handling of Walla Walla Sweet 
Onions. This could include a logo or other markings that would identify 
the contents of such containers. Such a logo or other marking would be 
small enough to be used in conjunction with the handler's own label, so 
that handlers would not have to incur the cost of having existing 
labels remade.
    As set forth in proposed Sec. 956.63, there should be provision for 
handling Walla Walla Sweet Onions in other than fresh market channels 
differently than those for the fresh market. It would authorize the 
Secretary, whenever it is found that it would tend to effectuate the 
declared policy of the Act, to issue regulations, suspend or terminate 
assessment requirements, container marking regulations, or any 
combination thereof, to facilitate the handling of Walla Walla Sweet 
Onions for other than fresh market uses. Such uses would be for relief 
or charity, livestock feed, planting and/or plants, salad onions, and 
all processing uses including canning, freezing, pickling, peeling, 
dehydration, juicing, or other processing. In addition, shipments for 
disposal, for packing and storing within the production area or to 
specified areas outside the production area in Washington and Oregon, 
or for other purposes which may be specified are included.
    Requirements for special purpose shipments would be intended to 
ensure that shipments of Walla Walla Sweet Onions for these uses would 
not be diverted to the fresh market. Shipments for relief, charity, or 
livestock feed would not compete with fresh market shipments in the 
market place. Onion plants are too small to be used as a food product. 
Salad onions, i.e., immature Walla Walla Sweet Onions of smaller sizes, 
usually 1\1/2\ to 2 inches in diameter, would not normally be regulated 
in the same way as fully mature, dry bulbs. Onions for canning and 
freezing are exempt from regulation under the authority for this part, 
and onions of such poor quality that they must be destroyed would not 
be marketable in any case. Shipments for storage both within and in 
specified locations outside of the production area would be handled as 
special purpose shipments with suitable safeguards. Such safeguards 
might be in the form of handler reports and would include such 
information that the committee would deem adequate to ensure compliance 
with program provisions. Other safeguards, unforeseen at this time, 
might be needed to assure program compliance and prevent abuses. Hence, 
the committee should be provided the flexibility to recommend, with 
approval of the Secretary, other safeguards as needed.
    There should be authority under proposed Sec. 956.64 to establish 
minimum quantities of Walla Walla Sweet Onions that would not be 
subject to regulation under this part. Testimony indicates that this 
quantity should be recommended by the committee and approved by the 
Secretary. Such quantities would not be subject to the requirements set 
forth in Secs. 956.42, 956.62, and/or 956.63. Such quantities usually 
are too small to affect the overall marketing of Walla Walla Sweet 
Onions.
    In accordance with proposed Sec. 956.65, the Secretary should 
notify the committee of each regulation issued, and of each amendment, 
modification, suspension, or termination thereof, and the committee 
would give reasonable notice of such action to handlers subject to this 
part. Such notification would be necessary for the efficient operation 
of the marketing order.
    The committee should be able to issue appropriate rules, 
regulations, and safeguards in connection with shipments for specified 
purposes and minimum quantity shipments. Such rules and regulations 
should authorize the use of appropriate safeguards under proposed 
Sec. 956.66.
    The term ``certificate of privilege'' is intended to mean the 
approval or permit necessary to make special purpose shipments. 
Authority should be included for the committee to specify the 
requirements contained in the certificate of privilege. Such 
requirements, established through rulemaking, would be intended to 
ensure that shipments would not be diverted to the fresh market.
    Safeguards should be adequate so that the committee can track such 
shipments from the time they leave the local shipping point to ultimate 
destination. This would be necessary to determine that such shipments 
did not enter fresh market channels of trade.
    The committee should have the authority to rescind or deny 
certificates of privilege or any other permit to any handler if proof 
is obtained that such handler shipped Walla Walla Sweet Onions for any 
other purpose than stated on the certificate of privilege. The 
committee would rescind or deny certificates only after an appropriate 
investigation concerning the alleged shipments and upon adequate and 
substantial proof that the handler did in fact violate the regulation. 
The Secretary would have the right to modify, change, or rescind any 
safeguards prescribed and any certificates issued by the committee 
pursuant to the provisions of this section.
    The committee would report to the Secretary such information 
concerning certificates of privilege as may be requested.
    (f) The committee should have the authority, under proposed 
Sec. 956.80, with the approval of the Secretary, to require that first 
handlers submit to the committee such reports and information as the 
committee may need to perform its functions and fulfill its 
responsibilities under the order. In the normal course of business, 
Walla Walla Sweet Onion handlers collect and record information that 
may be needed by the committee. Witnesses expressed the belief that the 
reporting requirements that may be imposed under the proposed order 
would not constitute an undue burden on handler businesses since the 
information is typically collected for other purposes.
    Reports could be needed by the committee for such purposes as 
collecting assessments; compiling statistical data for use in 
evaluating marketing research and development projects; promotional 
activities; making recommendations for production research; and 
determining whether handlers are complying with order requirements. The 
record evidence indicates that to the extent necessary for the 
committee to perform its functions, handlers will likely need to 
provide information on the quantity of Walla Walla Sweet Onions handled 
each season. This required information may include, but would not 
necessarily be limited to, the quantities of Walla Walla Sweet Onions 
received by the handler and the quantities disposed of by such handler, 
the date of each such receipt and disposition, and the identity of the 
carrier transporting such onions. This should not be construed as a 
complete list of information the committee might require, nor should it 
be assumed that all of the above would necessarily be required of 
handlers. There may be other reports or kinds of information that the 
committee may find necessary for the proper conduct of its operations 
under the order. Therefore, the committee should have the authority, 
with the Secretary's approval, to require each handler to furnish such 
information as it finds necessary to perform its duties under the 
order.
    Each handler should be required to maintain such records of Walla 
Walla Sweet Onions received and disposed of as may be necessary to 
verify the reports that the handlers submit to the committee. All such 
records should be maintained for at least two fiscal periods after the 
fiscal period in which the transactions occurred. The order should 
provide that the Secretary and authorized employees of the committee 
should have access to handlers' premises to examine those records 
pertaining to matters within the purview of the order. This provision 
would enable verification of compliance with requirements of the order.
    All reports and records submitted for committee use by handlers 
would be required to remain confidential and be disclosed to none other 
than persons authorized by the Secretary, as required by the Act. Such 
reports should become part of the committee and Secretary's records. 
However, the committee should be authorized to release composite 
information from any or all reports that do not reveal confidential 
information. Such composite information could be helpful to the 
committee and to the industry in planning operations under the order 
and in promoting the order. Any release of composite information should 
not disclose the identity of the persons furnishing the information or 
any person's individual operation.
    (g) No handler should be permitted to handle Walla Walla Sweet 
Onions except in conformity with the provisions of this part, as set 
forth in proposed Sec. 956.89. If the program is to be effective, 
compliance with its requirements is essential, and no handler should be 
permitted to evade any of its provisions. Any such evasion, on the part 
of even one handler, could be demoralizing to those handlers who are in 
compliance and would tend to impair the effective operation of the 
program.
    Witnesses testified that consumers are being deceived when they 
purchase onions they believe to be Walla Walla Sweet Onions, but which 
are actually onions produced outside the production area. Proponents 
testified that the application of the Walla Walla name to onions not 
grown in the production area is an unfair trade practice that destroys 
the reputation of the Walla Walla Sweet Onion and causes harm to the 
industry.
    The Act provides that a marketing order can only apply to a defined 
commodity grown in a specified production area. No authority exists for 
regulating the handling of that commodity grown outside that production 
area.
    In accordance with proposed Sec. 956.85, the order should provide 
that the Secretary conduct a periodic referendum every six years with 
the initial referendum conducted within six years of the effective date 
of the marketing order.
    The Secretary of Agriculture has determined that continuance 
referenda are an effective means for ascertaining whether producers 
favor continuance of marketing order programs. The Act provides that 
the Secretary shall terminate a marketing order whenever, through the 
conduct of a referendum, it is indicated that a majority of all 
producers favor termination and such majority produced more than 50 
percent of the commodity for market during a representative period.
    Since less than 50 percent of all producers usually participate in 
a referendum, it is difficult to determine overall producer support or 
opposition to termination of an order. Thus, to provide a basis for 
determining whether producers favor continuance of the order, a 
provision for continuance referenda should be included. Continuance 
should be based upon the affirmative vote of either two-thirds of the 
producers voting or an affirmative vote of the producers of two-thirds 
of the volume of Walla Walla Sweet Onions represented in the 
referendum.
    The Act requires that in the promulgation or amendment of a 
marketing order, at least two-thirds of the producers voting, by number 
or volume represented in the referendum, must favor the issuance or 
amendment of a marketing order. Continuance referenda should be based 
on the same standard of industry support. This requirement is 
considered adequate to measure producers' support to continue the 
marketing order. The Secretary would consider termination of the order 
if less than two-thirds of the producers voting in the referendum and 
producers of less than two-thirds of the volume of Walla Walla Sweet 
Onions represented in the referendum favor continuance. In evaluating 
the merits of continuance versus termination, the Secretary should not 
only consider the results of the referendum but also should consider 
all other relevant information concerning the operation of the order 
and the relative benefits and disadvantages to producers, handlers and 
consumers in order to determine whether continued operation of the 
order would tend to effectuate the declared policy of the Act.
    In any event, section 608(C)(16)(B) of the Act requires the 
Secretary to terminate the order whenever the Secretary finds that the 
majority of all producers favor termination, and that such majority 
produced more than 50 percent of the commodity for market.
    The Secretary's ``Guidelines for Fruit, Vegetable, and Specialty 
Crop Marketing Orders'' provide for periodic referenda to allow 
producers the opportunity to indicate their support for or rejection of 
a marketing order. It is the position of the Department that periodic 
referenda ensure that marketing order programs continue to be 
accountable to producers, obligate producers to evaluate their programs 
periodically, and involve them more closely in their operation. The 
record evidence supports these goals.
    The provisions of proposed Secs. 956.87 through 956.99 of the order 
as contained in the Notice of Hearing and hereinafter set forth, are 
common to marketing agreements and orders now operating. All such 
provisions are incidental to and not inconsistent with the Act and are 
necessary to effectuate the other provisions of the marketing order and 
marketing agreement and to effectuate the declared policy of the Act. 
The record evidence supports inclusion of each such provision as 
proposed in the Notice of Hearing. These provisions, which are 
applicable to both the marketing agreement and the marketing order, are 
identified by section number and heading as follows: Sec. 956.87 
Proceedings after termination; Sec. 956.88 Effect of termination or 
amendment; Sec. 956.90 Right of the Secretary; Sec. 956.91 Duration of 
immunities; Sec. 956.92 Agents; Sec. 956.93 Derogation; Sec. 956.94 
Personal liability; Sec. 956.95 Separability; and Sec. 956.96 
Amendments. Those provisions applicable to the marketing agreement only 
are: Sec. 956.97 Counterparts; Sec. 956.98 Additional parties; and 
Sec. 956.99 Order with marketing agreement.
    Miscellaneous changes have been made from the provisions as 
proposed in the notice of hearing for the purpose of clarity.

List of Subjects in 7 CFR Part 956

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

    Title 7, Chapter IX is proposed to be amended by adding Part 956 to 
read as follows:

PART 956--SWEET ONIONS GROWN IN THE WALLA WALLA VALLEY OF SOUTHEAST 
WASHINGTON AND NORTHEAST OREGON

Subpart--Order Regulating Handling

Definitions

Sec.
956.1  Secretary.
956.2  Act.
956.3  Person.
956.4  Production area.
956.5  Walla Walla Sweet Onions.
956.6  Handler.
956.7  Registered handler.
956.8  Handle.
956.9  Container.
956.10  Producer.
956.11  Varieties.
956.12  Committee.
956.13  Fiscal period.

Administrative Committee

956.20  Establishment and membership.
956.21  Term of office.
956.22  Nominations.
956.23  Selection.
956.24  Qualifications and acceptance.
956.25  Alternates.
956.26  Vacancies.
956.27  Failure to nominate.
956.28  Procedure.
956.29  Expenses.
956.30  Powers.
956.31  Duties.

Expenses and Assessments

956.40  Expenses.
956.41  Budget.
956.42  Assessments.
956.43  Accounting.
956.44  Excess funds.
956.45  Contributions.

Research and Development

956.50  Research and development.

Regulation

956.61  Recommendation for regulations
956.62  Container markings.
956.63  Handling for specified purposes.
956.64  Minimum quantities.
956.65  Notification of regulations.
956.66  Safeguards.

Reports

956.80  Reports and recordkeeping.

Miscellaneous Provisions

956.85  Termination or suspension.
956.87  Proceedings after termination.
956.88  Effect of termination or amendment.
956.89  Compliance.
956.90  Right of the Secretary.
956.91  Duration of immunities.
956.92  Agents.
956.93  Derogation.
956.94  Personal liability.
956.95  Separability.
956.96  Amendments.
956.97  Counterparts.
956.98  Additional parties.
956.99  Order with marketing agreement.

    Authority: 7 U.S.C. 601-674.

Definitions


Sec. 956.1  Secretary.

    Secretary means the Secretary of Agriculture of the United States 
or any officer or employee of the Department of Agriculture who has 
been delegated, or to whom authority may hereafter be delegated, the 
authority to act for the Secretary.


Sec. 956.2  Act.

    Act means Public Act No. 10, 73d Congress (May 12, 1933), as 
amended and as reenacted and amended by the Agricultural Marketing 
Agreement Act of 1937, as amended (Sec. 1-19, 48 Stat. 31, as amended; 
7 U.S.C. 601 et seq.).


Sec. 956.3  Person.

    Person means an individual, partnership, corporation, association, 
or any other business unit.


Sec. 956.4  Production area.

    Production area means a tract of land in Umatilla County, Oregon, 
and Walla Walla County, Washington, based on surveyors' maps, enclosed 
by the following boundaries: Commencing at the Southeast corner of 
Section 13, Township (Twp.) 5 North, Range (Rge.) 36 East, W.M.; thence 
Westerly along the South line of Sections 13, 14, 15, 16, 17, and 18 in 
Twp. 5 North, Rge. 36 East, Sections 13, 14, 15, 16, 17, and 18 in Twp. 
5 North, Rge. 35 East, Sections 13, 14, 15, 16, 17, and 18 in Twp. 5 
North, Rge. 34 East, Sections 13, 14, and 15 in Twp. 5 North, Rge. 33 
East, W.M. to the East right of way line of the Northern Pacific 
Railway, as it runs Northwesterly through Vansyckle Canyon; thence 
Northwesterly along said Easterly right of way line to a point in the 
Northwest \1/4\ of Section 20, Twp. 7 North, Rge. 32 East, W.M. where 
said line intersects the South right of way of the Union Pacific 
Railway, said intersection being commonly known as Zangar Junction; 
thence Easterly along said South right of way line of the Union Pacific 
Railway to a point in the Southwest \1/4\ of Section 23, Twp. 7 North, 
Rge. 32 East where said line intersects the South right of way line of 
Washington State Highway No. 12; thence Easterly along said South right 
of way line to the intersection with the West line of Section 34, Twp. 
7 North, Rge. 33 East, W.M.; thence North, along the West line of 
Sections 34, 27, 22, 15, 10, and 3 in Twp. 7 North, Rge. 33 East, W.M., 
and the West line of Sections 34, 27, and 22 in Twp. 8 North, Rge. 33 
East, W.M. to the Northwest corner of said Section 22; thence East 
along the North line of said Section 22 to the Northeast corner 
thereof; thence North along the West line of Sections 14, 11, and 2 in 
Twp. 8 North, Rge. 33 East, W.M. to the Northwest corner of said 
Section 2; thence East along North lines of Sections 2 and 1 in Twp. 8 
North, Rge. 33 East, W.M. and the North line of Section 6, Twp. 8 
North, Rge. 34 East, W.M. to the centerline of the Touchet River; 
thence northerly and Easterly along said centerline of the Touchet 
River as it runs through Twp. 9 North, Rge. 34 East, Twp. 9 North, Rge. 
35 East, Twp. 10 North, Rge. 35 East, Twp. 10 North, Rge. 36 East, Twp. 
9 North, Rge. 36 East, and Twp. 9 North, Rge. 37 East to a point on the 
East line of Section 11 in Twp. 9 North, Rge. 37 East, W.M., thence 
South along the East line of Sections 11, 14, 23, 26, and 35 in Twp. 9 
North, Rge. 37 East, W.M., the East lines of Sections 2, 11, 14, 23, 
26, and 35 in Twp. 8 North, Rge. 37 East, W.M., the East lines of 
Sections 2, 11, 14, 23, 26, and 35 in Twp. 7 North, Rge. 37 East, W.M., 
and the East lines of Sections 2, 11, and fractional Section 14 in Twp. 
6 North, Rge. 37 East, W.M., to a point on the Washington-Oregon State 
line; thence West along said State Line to the closing corner on the 
West side of Section 18 in Twp. 6 North, Rge. 37 East, W.M.; thence 
South along the West line of Sections 18, 19, 30, and 31 in Twp. 6 
North, Rge. 37 East, W.M. and the West line of Sections 6, 7, and 18 in 
Twp. 5 North, Rge. 37 East to the corner common to Sections 18 and 19 
in Twp. 5 North, Rge. 37 East, W.M. and 13 and 24 in Twp. 5 North, Rge. 
36 East, W.M., Being the True Point of Beginning of this Legal 
Description.


Sec. 956.5  Walla Walla Sweet Onions.

    Walla Walla Sweet Onions means all varieties of Allium cepa grown 
within the production area, except Spanish hybrid varieties. The 
committee may, with the approval of the Secretary, exempt individual 
varieties from any or all regulations issued under this part.


Sec. 956.6  Handler.

    Handler is synonymous with ``shipper'' and means any person (except 
a common or contract carrier of Walla Walla Sweet Onions owned by 
another person) who handles Walla Walla Sweet Onions or causes Walla 
Walla Sweet Onions to be handled.


Sec. 956.7  Registered handler.

    Registered handler means any person with adequate facilities for 
preparing Walla Walla Sweet Onions for commercial market, who has 
requested such registration and is so recorded by the committee, or any 
person who has access to such facilities and has recorded with the 
committee the ability and willingness to assume customary obligations 
of preparing Walla Walla Sweet Onions for commercial market. The 
committee may recommend, for approval of the Secretary, procedures with 
respect to handler registration.


Sec. 956.8  Handle.

    Handle is synonymous with ``ship'' and means to package, load, 
sell, transport, or in any way place Walla Walla Sweet Onions or cause 
Walla Walla Sweet Onions to be placed in the current of commerce within 
the production area or between the production area and any point 
outside thereof. Such term shall not include the transportation, sale, 
or delivery of harvested Walla Walla Sweet Onions to a handler within 
the production area for the purpose of having such Walla Walla Sweet 
Onions prepared for market.


Sec. 956.9  Container.

    Container means a box, bag, crate, hamper, basket, package, or any 
other receptacle used in the packaging, transporting, sale, shipment, 
or other handling of Walla Walla Sweet Onions.


Sec. 956.10  Producer.

    Producer is synonymous with ``grower'' and means any person engaged 
in a proprietary capacity in the production of Walla Walla Sweet Onions 
for market.


Sec. 956.11  Varieties.

    Varieties means and includes all classifications, subdivisions, or 
types of Walla Walla Sweet Onions according to those definitive 
characteristics now or hereafter recognized by the United States 
Department of Agriculture or recommended by the committee and approved 
by the Secretary.


Sec. 956.12  Committee.

    Committee means the Walla Walla Sweet Onion Committee established 
pursuant to Sec. 956.20.


Sec. 956.13  Fiscal period.

    Fiscal period means the period beginning on June 1 and ending on 
May 31 of each year, or other such period as may be recommended by the 
committee and approved by the Secretary.

Administrative Committee


Sec. 956.20  Establishment and membership.

    (a) The Walla Walla Sweet Onion Committee, consisting of ten 
members, is hereby established. The committee shall consist of six 
producer members, three handler members, and one public member. Each 
member shall have an alternate who shall have the same qualifications 
as the member.
    (b) A producer shall have three years of experience in producing 
onions in order to qualify for committee membership. At the time of 
selection, no more than two producer members may be affiliated with the 
same handler.


Sec. 956.21  Term of office.

    (a) Except as otherwise provided in paragraph (b) of this section, 
the term of office of committee members and their respective alternates 
shall be for three fiscal periods beginning on June 1 or such other 
date as recommended by the committee and approved by the Secretary. The 
terms shall be determined so that one-third of the grower membership 
and one-third of the handler membership shall terminate each year. 
Members and alternates shall serve during the term of office for which 
they are selected and have been qualified, or during that portion 
thereof beginning on the date on which they qualify during such term of 
office and continuing until the end thereof, or until their successors 
are selected and have qualified.
    (b) The term of office of the initial members and alternates shall 
begin as soon as possible after the effective date of this subpart. 
One-third of the initial industry members and alternates shall serve 
for a one-year term, one-third shall serve for a two-year term, and 
one-third shall serve for a three-year term. The initial, as well as 
all successive terms of office of the public member and alternate 
member shall be for three years.
    (c) The consecutive terms of office for all members shall be 
limited to two three-year terms. There shall be no such limitation for 
alternate members.


Sec. 956.22  Nominations.

    Nominations from which the Secretary may select the members of the 
committee and their respective alternates may be made in the following 
manner:
    (a) The committee shall hold or cause to be held, within the 
production area and prior to April 1 of each year or by such other date 
as may be specified by the Secretary, one or more meetings of producers 
and handlers for the purpose of designating one nominee for each of the 
member and alternate member positions which are vacant or will be 
vacant at the end of the fiscal period;
    (b) In arranging for such meetings the committee may, if it deems 
such desirable, cooperate with existing organizations and agencies;
    (c) Nominations for committee members and alternate members shall 
be provided to the Secretary, in such manner and form as the Secretary 
may prescribe, not later than 30 days prior to the end of the fiscal 
period within which the current term of office expires;
    (d) Only producers may participate in designating nominees for 
producer committee members and their alternates and only handlers may 
participate in designating nominees for handler committee members and 
their alternates;
    (e) Each person who is both a handler and a producer may vote 
either as a handler or as a producer, but not both;
    (f) Each person is entitled to cast only one vote on behalf of him 
or herself, his or her partners, agents, subsidiaries, affiliates and 
representatives, in designating nominees for committee members and 
alternates. An eligible producer's or handler's privilege of casting 
only one vote, as aforesaid, shall be construed to permit such voter to 
cast one vote for each producer member and alternate member position to 
be filled or each handler member and alternate member position to be 
filled, but not both.
    (g) Every three years, at the first meeting following selection, 
the committee shall nominate the public member and alternate for a 
three-year term of office.
    (h) The committee shall prescribe such additional qualifications, 
administrative rules and procedures for selection and voting for each 
candidate as it deems necessary and as the Secretary approves.


Sec. 956.23  Selection.

    The Secretary shall select members and alternate members of the 
committee from the nominations made pursuant to Sec. 956.22 or from 
other qualified persons.


Sec. 956.24  Qualification and acceptance.

    Any person nominated to serve as a member or alternate member of 
the committee shall, prior to selection by the Secretary, qualify by 
filing a written background and acceptance statement indicating such 
person's willingness to serve in the position for which nominated.


Sec. 956.25  Alternates.

    An alternate member of the committee shall act in the place and 
stead of the member for whom such person is an alternate, during such 
member's absence. In the event of the death, removal, resignation, or 
disqualification of a member, that member's alternate shall serve until 
a successor to such member has qualified and is selected.


Sec. 956.26  Vacancies.

    To fill any vacancy occasioned by the failure of any person 
nominated as a member or as an alternate to qualify, or in the event of 
the death, removal, resignation, or disqualification of a member or 
alternate, a successor for the unexpired term may be selected by the 
Secretary from nominations made pursuant to Sec. 956.22 from previously 
unselected nominees on the current nominee list, or from other eligible 
persons.


Sec. 956.27  Failure to nominate.

    If nominations are not made within the time and manner prescribed 
in Sec. 956.22 the Secretary may, without regard to nominations, select 
the members and alternates on the basis of the representation provided 
for in Sec. 956.20.


Sec. 956.28  Procedure.

    (a) Six members of the committee shall constitute a quorum, and six 
concurring votes shall be required to pass any motion or approve any 
committee action, except that recommendations made pursuant to 
Sec. 956.61 shall require seven concurring votes.
    (b) The committee may provide for meetings by telephone, telegraph, 
facsimile, or other means of communication, and any vote cast orally at 
such meetings shall be confirmed promptly in writing: Provided, That if 
an assembled meeting is held, all votes shall be cast in person.


Sec. 956.29  Expenses.

    Members and alternates shall serve without compensation but shall 
be reimbursed for such expenses authorized by the committee and 
necessarily incurred by them in attending committee meetings and in the 
performance of their duties under this part.


Sec. 956.30  Powers.

    The committee shall have the following powers:
    (a) To administer the provisions of this part in accordance with 
its terms;
    (b) To make rules and regulations to effectuate the terms and 
provisions of this part;
    (c) To receive, investigate, and report to the Secretary complaints 
of violations of the provisions of this part; and
    (d) To recommend to the Secretary amendments to this part.


Sec. 956.31  Duties.

    It shall be among the duties of the committee:
    (a) At the beginning of each fiscal period, or as soon thereafter 
as practicable, to meet and organize, to select a chairman and such 
other officers as may be necessary, to select subcommittees, and to 
adopt such rules and regulations for the conduct of its business as it 
may deem advisable;
    (b) To act as intermediary between the Secretary and any producer 
or handler;
    (c) To furnish to the Secretary such available information as the 
Secretary may request;
    (d) To appoint such employees, agents, and representatives as it 
may deem necessary and to determine the salaries and define the duties 
of each such person;
    (e) To investigate from time to time and to assemble data on the 
growing, harvesting, shipping, and marketing conditions with respect to 
Walla Walla Sweet Onions and to engage in such research and service 
activities which relate to the production, handling, or marketing of 
Walla Walla Sweet Onions as may be approved by the Secretary;
    (f) To keep minutes, books, and records which clearly reflect all 
of the acts and transactions of the committee. Such minutes, books, and 
records shall be subject to examination at any time by the Secretary or 
the Secretary's authorized agent or representative;
    (g) To make available to producers and handlers the committee 
voting record on recommended regulations and on other matters of 
policy;
    (h) Prior to each fiscal period, to submit to the Secretary a 
budget of its proposed expenses for such fiscal period, together with a 
report thereon, and a recommendation as to the rate of assessment for 
such period;
    (i) To cause its books to be audited by a competent accountant at 
least once each fiscal period, and at such other time as the committee 
may deem necessary or as the Secretary may require; the report of such 
audit shall show the receipt and expenditure of funds collected 
pursuant to this part; a copy of each such report shall be furnished to 
the Secretary, and a copy of each such report shall be made available 
at the principal office of the committee for inspection by producers 
and handlers: Provided, that confidential information shall be removed 
from all copies made available to the public; and
    (j) To consult, cooperate, and exchange information with other 
onion marketing committees and other individuals or agencies in 
connection with all proper committee activities and objectives under 
this subpart.

Expenses and Assessments


Sec. 956.40  Expenses.

    The committee is authorized to incur such expenses as the Secretary 
may find are reasonable and likely to be incurred by the committee for 
its maintenance and functioning, and to enable it to exercise its 
powers and perform its duties in accordance with the provisions of this 
part. The funds to cover such expenses shall be acquired in the manner 
prescribed in Secs. 956.42 and 956.45.


Sec. 956.41  Budget.

    Prior to each fiscal period and as may be necessary thereafter, the 
committee shall prepare an estimated budget of income and expenditures 
necessary for the administration of this part. The committee shall 
recommend a rate of assessment calculated to provide adequate funds to 
defray its proposed expenditures. The committee shall present such 
budget to the Secretary with an accompanying report showing the basis 
for its calculations.


Sec. 956.42  Assessments.

    (a) The funds to cover the committee's expenses shall be acquired 
by the levying of assessments upon handlers as provided in this 
subpart. Each person who first handles Walla Walla Sweet Onions shall 
pay assessments to the committee upon demand, which assessments shall 
be in payment of such handler's pro rata share of the committee's 
expenses.
    (b) Assessments shall be levied upon handlers, at rates established 
by the Secretary. Such rates may be established upon the basis of the 
committee's recommendations or other available information.
    (c) At any time during, or subsequent to, a given fiscal period, 
the committee may recommend the approval of an amended budget and an 
increase in the rate of assessment. Upon the basis of such 
recommendations, or other available information, the Secretary may 
approve an amended budget and increase the assessment rate. Such 
increase in the assessment rate shall be applicable to all Walla Walla 
Sweet Onions which were handled by each handler thereof during such 
fiscal period.
    (d) The payment of assessments for the maintenance and functioning 
of the committee may be required under this part throughout the period 
it is in effect, irrespective of whether particular provisions of this 
part are suspended or become inoperative.
    (e) To provide funds for the administration of the provisions of 
this part during the initial fiscal period or the first part of a 
fiscal period when neither sufficient operating reserve funds nor 
sufficient revenue from assessments on the current season's shipments 
are available, the committee may accept payment of assessments in 
advance or may borrow money for such purposes.
    (f) The committee may impose a late payment charge or an interest 
charge, or both, on any handler who fails to pay any assessment in a 
timely manner. Such time and the rates shall be recommended by the 
committee and approved by the Secretary.


Sec. 956.43  Accounting.

    (a) All funds received by the committee pursuant to the provisions 
of this part shall be used solely for the purposes specified in this 
part.
    (b) The Secretary may at any time require the committee, its 
members and alternate members, employees, agents, and all other such 
persons associated with the committee to account for all receipts, 
disbursements, funds, property, or records for which they are 
responsible. Whenever any person ceases to be a member, alternate 
member, employee, or agent of the committee, such person shall account 
for all receipts, disbursements, funds, property, and records 
pertaining to the committee's activities for which such person was 
responsible, deliver all property and funds in such person's possession 
to the committee, and execute such assignments and other instruments as 
may be necessary or appropriate to vest in the committee full title to 
all of the property, funds, and claims vested in such person pursuant 
to this part.
    (c) The committee may make recommendations to the Secretary for one 
or more of the members thereof, or any other person, to act as a 
trustee for holding records, funds, or any other committee property 
during periods of suspension of this part, or during any period or 
periods when regulations are not in effect and, upon determining such 
action is appropriate, the Secretary may direct that such person or 
persons shall act as trustee or trustees for the committee.


Sec. 956.44  Excess funds.

    If, at the end of a fiscal period, the assessments collected are in 
excess of expenses incurred, such excess shall be accounted for as 
follows:
    (a) The committee, with approval of the Secretary, may establish an 
operating reserve and may carry over to subsequent fiscal periods 
excess funds in a reserve so established, except funds in the reserve 
shall not exceed the equivalent of approximately two fiscal periods' 
budgeted expenses. Such reserve funds may be used:
    (1) To defray any expenses authorized under this part;
    (2) To defray expenses during any fiscal period prior to the time 
assessment income is sufficient to cover such expenses;
    (3) To cover deficits incurred during any fiscal period when 
assessment income is less than expenses;
    (4) To defray expenses incurred during any period when any or all 
provisions of this part are suspended or are inoperative; and
    (5) To cover necessary expenses of liquidation in the event of 
termination of this part.
    (b) Upon termination of this part, any funds not required to defray 
the necessary expenses of liquidation shall be disposed of in such 
manner as the Secretary may determine to be appropriate except that to 
the extent practicable, such funds shall be returned pro rata to the 
persons from whom such funds were collected.
    (c) If such excess is not retained in a reserve as provided in 
paragraph (a) of this section, each handler entitled to a proportionate 
refund of the excess assessments collected shall be credited at the end 
of a fiscal period with such refund against the operations of the 
following fiscal period unless such handler demands payment thereof, in 
which event such proportionate refund shall be paid as soon as 
practicable.


Sec. 956.45  Contributions.

    The committee may accept voluntary contributions but these shall be 
used only to pay expenses incurred pursuant to Sec. 956.50. Such 
contributions shall be free from any encumbrances by the donor, and the 
committee shall retain complete control of their use.

Research and Development


Sec. 956.50  Research and development.

    (a) The committee, with the approval of the Secretary, may 
establish or provide for the establishment of production research, 
marketing research and development, and marketing promotion projects, 
including paid advertising, designed to assist, improve, or promote the 
marketing, distribution, consumption, or efficient production of Walla 
Walla Sweet Onions. Any such project for the promotion and advertising 
of Walla Walla Sweet Onions may utilize an identifying mark, including 
but not limited to registered trademarks and logos, which shall be made 
available for use by all handlers in accordance with such terms and 
conditions as the committee, with the approval of the Secretary, may 
prescribe. The committee may register such logos with the Commissioner 
of Patents and Trademarks, U.S. Patent and Trademark Office. The 
expense of such projects shall be paid from funds collected pursuant to 
Secs. 956.42 and 956.45.
    (b) In recommending projects pursuant to this section, the 
committee shall give consideration to the following:
    (1) The expected supply of Walla Walla Sweet Onions in relation to 
market requirements;
    (2) The supply situation among competing onion areas and 
communities;
    (3) The anticipated benefits from such projects in relation to 
their costs;
    (4) The need for marketing research with respect to any market 
development activity; and
    (5) Other relevant factors.
    (c) If the committee concludes that a program of research and 
development should be undertaken, or continued, in any fiscal period, 
it shall submit the following for the approval of the Secretary:
    (1) Its recommendations as to the funds to be obtained pursuant to 
Secs. 956.42 and 956.45;
    (2) Its recommendations as to any research projects; and
    (3) Its recommendations as to promotion activity and paid 
advertising.
    (d) Upon conclusion of each activity, but at least annually, the 
committee shall summarize and report the results of such activity to 
the Secretary.
    (e) All marketing promotion activity engaged in by the committee, 
including paid advertising, shall be subject to the following terms and 
conditions:
    (1) No marketing promotion, including paid advertising, shall refer 
to any private brand, private trademark, or private trade name;
    (2) No promotion or advertising shall disparage the quality, use, 
value, or sale of like or any other agricultural commodity or product, 
and no false or unwarranted claims shall be made in connection with the 
product; and
    (3) No promotion or advertising shall be undertaken without reason 
to believe that returns to producers will be improved by such activity.

Regulation


Sec. 956.61  Recommendation for regulations.

    The committee shall recommend regulations to the Secretary whenever 
it deems it advisable, as provided in Sec. 956.62. The committee also 
may recommend modification, suspension, or termination of any 
regulation, or amendments thereto, in order to facilitate the handling 
of Walla Walla Sweet Onions for the purposes authorized in Sec. 956.63. 
The committee may also recommend amendment, modification, termination, 
or suspension of any regulation issued under this part.


Sec. 956.62  Container markings.

    The committee may, with the approval of the Secretary, provide a 
method, through rules and regulations issued pursuant to this part, for 
fixing the marking of containers which may be used in the packaging or 
handling of Walla Walla Sweet Onions, including appropriate logo or 
other container markings to identify the contents thereof. Further, the 
committee may, with the approval of the Secretary, establish through 
rules and regulations such safeguards as may be necessary to ensure 
that such container marking requirements are complied with.


Sec. 956.63  Handling for specified purposes.

    Upon the basis of recommendations and information submitted by the 
committee, or other available information, the Secretary may issue 
special regulations, or modify, suspend, or terminate requirements in 
effect pursuant to Secs. 956.42 and 956.62 or any combination thereof, 
in order to facilitate the handling of onions for the following 
purposes:
    (a) Shipments of Walla Walla Sweet Onions for relief or to 
charitable institutions;
    (b) Shipments of Walla Walla Sweet Onions for livestock feed;
    (c) Shipments of Walla Walla Sweet Onions for planting and for 
plants;
    (d) Shipments of Walla Walla Sweet Onions as salad onions;
    (e) Shipments of Walla Walla Sweet Onions for all processing uses 
including, pickling, peeling, dehydration, juicing, or other 
processing;
    (f) Shipments of Walla Walla Sweet Onions for disposal;
    (g) Shipments of Walla Walla Sweet Onions for seed;
    (h) Shipments of Walla Walla Sweet Onions for packing or storing 
within the production area or outside the production area, but within 
specified locations in the States of Oregon and Washington; and
    (i) Shipments of Walla Walla Sweet Onions for other purposes which 
may be specified.


Sec. 956.64  Minimum quantities.

    The committee, with the approval of the Secretary, may establish 
minimum quantities below which Walla Walla Sweet Onion shipments will 
be free from the requirements in, or pursuant to, Secs. 956.42, 956.62, 
and 956.63, or any combination thereof.


Sec. 956.65  Notification of regulations.

    The Secretary shall notify the committee of each regulation issued 
and of each amendment, modification, suspension, or termination 
thereof. The committee shall give reasonable notice thereof to 
handlers.


Sec. 956.66  Safeguards.

    (a) The committee, with the approval of the Secretary, may 
prescribe adequate safeguards to prevent Walla Walla Sweet Onions 
shipped, pursuant to Secs. 956.63 and 956.64, from entering channels of 
trade for other than the purpose authorized therefor.
    (b) The committee, with the approval of the Secretary, may also 
prescribe rules and regulations governing the issuance, and the 
contents, of Certificates of Privilege, if such certificates are 
prescribed as safeguards by the committee. Such safeguards may include 
requirements that:
    (1) Handlers shall first file applications with the committee to 
ship such Walla Walla Sweet Onions.
    (2) Handlers shall pay the pro rata share of expenses provided by 
Sec. 956.42 in connection with such Walla Walla Sweet Onions.
    (3) Handlers shall obtain Certificates of Privilege from the 
committee prior to effecting the particular onion shipment.
    (c) The committee may rescind any Certificate of Privilege, or 
refuse to issue any Certificate of Privilege, to any handler if proof 
is obtained that Walla Walla Sweet Onions shipped by the handler for 
the purposes stated in the Certificate of Privilege were handled 
contrary to the provisions of this part.
    (d) The Secretary shall have the right to modify, change, alter, or 
rescind any safeguards prescribed and any certificates issued by the 
committee pursuant to the provisions of this section.
    (e) The committee shall make reports to the Secretary as requested, 
showing the number of applications for such certificates, the quantity 
of Walla Walla Sweet Onions covered by such applications, the number of 
such applications denied and certificates granted, the quantity of 
Walla Walla Sweet Onions handled under duly issued certificates, and 
such other information as may be requested.

Reports


Sec. 956.80  Reports and recordkeeping.

    Upon request of the committee, made with the approval of the 
Secretary, each handler shall furnish to the committee, in such manner 
and at such time as it may prescribe, such reports and other 
information as may be necessary for the committee to perform its duties 
under this part.
    (a) Such reports may include, but are not necessarily limited to, 
the following:
    (1) The acreage of Walla Walla Sweet Onions grown;
    (2) The quantities of Walla Walla Sweet Onions received by such 
handler;
    (3) The quantities of Walla Walla Sweet Onions disposed of by such 
handler;
    (4) The disposition date of such Walla Walla Sweet Onions;
    (5) The manner of disposition of such Walla Walla Sweet Onions; and
    (6) The identification of the carrier transporting such Walla Walla 
Sweet Onions.
    (b) All such reports shall be held under appropriate protective 
classification and custody by the committee, or duly appointed 
employees thereof, so that any information contained therein which may 
adversely affect the competitive position of any handler in relation to 
other handlers will not be disclosed. Compilations of general reports 
from data submitted by handlers is authorized, subject to the 
prohibition of disclosure of individual handler's identity or 
operations.
    (c) Each handler shall maintain for at least two succeeding years 
such records of the Walla Walla Sweet Onions received and disposed of 
by such handler as may be necessary to verify reports submitted to the 
committee pursuant to this section.

Miscellaneous Provisions


Sec. 956.85  Termination or suspension.

    (a) The Secretary may at any time terminate the provisions of this 
subpart by giving at least one day's notice by means of a press release 
or in any other manner which the Secretary may determine.
    (b) The Secretary shall terminate or suspend the operations of any 
or all of the provisions of this subpart whenever it is found that such 
provisions do not tend to effectuate the declared policy of the act.
    (c) The Secretary shall terminate the provisions of this subpart at 
the end of any fiscal period whenever it is found that such termination 
is favored by a majority of producers who, during a representative 
period, have been engaged in the production of Walla Walla Sweet 
Onions: Provided, That such majority has, during such representative 
period, produced for market more than fifty percent of the volume of 
such Walla Walla Sweet Onions produced for market, but such termination 
shall be announced at least 90 days before the end of the current 
fiscal period.
    (d) Within six years of the effective date of this subpart the 
Secretary shall conduct a continuance referendum to ascertain whether 
continuance of this subpart is favored by producers. Subsequent 
referenda to ascertain continuance shall be conducted every six years 
thereafter. The Secretary may terminate the provisions of this part at 
the end of any fiscal period in which the Secretary has found that 
continuance of this subpart is not favored by a majority of producers 
who, during a representative period determined by the Secretary, have 
been engaged in the production for market of Walla Walla Sweet Onions 
in the production area. Such termination shall be announced on or 
before the end of the fiscal period.
    (e) The provisions of this subpart shall, in any event, terminate 
whenever the provisions of the Act authorizing them cease to be in 
effect.


Sec. 956.87  Proceedings after termination.

    (a) Upon the termination of the provisions of this subpart, the 
then functioning members of the committee shall continue as joint 
trustees, for the purpose of liquidating the affairs of the committee, 
of all funds and property then in the possession, or under control, of 
the committee, including claims for any funds unpaid or property not 
delivered at the time of such termination. Action by said trusteeship 
shall require the concurrence of a majority of the said trustees.
    (b) The said trustees shall continue in such capacity until 
discharged by the Secretary; shall, from time to time, account for all 
receipts and disbursements and deliver all property on hand, together 
with all books and records of said committee and of the trustees, to 
such person as the Secretary may direct; and shall upon the request of 
the Secretary, execute such assignments or other instruments necessary 
or appropriate to vest in such person full title and right to all of 
the funds, property, and claims vested in said committee or the 
trustees pursuant to this subpart.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered by the committee or its members pursuant to 
this section shall be subject to the same obligations imposed upon the 
members of the committee and upon the said trustees.


Sec. 956.88  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this subpart or of any regulation issued pursuant to 
this subpart, or the issuance of any amendments to either thereof, 
shall not:
    (a) Affect or waive any right, duty, obligation, or liability which 
shall have arisen or which may thereafter arise in connection with any 
provision of this subpart;
    (b) Release or extinguish any violation of this subpart or of any 
regulations issued under this subpart; and
    (c) Affect or impair any rights or remedies of the Secretary or of 
any other person with respect to any such violations.


Sec. 956.89  Compliance.

    No handler shall handle Walla Walla Sweet Onions except in 
conformity to the provisions of this part.


Sec. 956.90  Right of the Secretary.

    The members of the committee, including successors and alternates, 
and any agent or employee appointed or employed by the committee shall 
be subject to removal or suspension by the Secretary at any time. Each 
and every order, regulation, decision, determination, or other act of 
the committee shall be subject to the continuing right of the Secretary 
to disapprove of the same at any time. Upon such disapproval, the 
disapproved action of the committee shall be deemed null and void 
except as to acts done in reliance thereon or in compliance therewith 
prior to such disapproval by the Secretary.


Sec. 956.91  Duration of immunities.

    The benefits, privileges, and immunities conferred upon any person 
by virtue of this subpart shall cease upon the termination of this 
subpart, except with respect to acts done under and during the 
existence of this subpart.


Sec. 956.92  Agents.

    The Secretary may, by designation in writing, name any person, 
including any officer or employee of the Government, or name any agency 
in the United States Department of Agriculture, to act as the 
Secretary's agent or representative in connection with any of the 
provisions of this part.


Sec. 956.93  Derogation.

    Nothing contained in this part is, or shall be construed to be, in 
derogation or in modification of the rights of the Secretary or of the 
United States to exercise any powers granted by the Act or otherwise, 
or, in accordance with such powers, to act in the premises whenever 
such action is deemed advisable.


Sec. 956.94  Personal liability.

    No member or alternate of the committee or any employee or agent 
thereof, shall be held personally responsible, either individually or 
jointly with others, in any way whatsoever, to any handler or to any 
person for errors in judgment, mistakes, or other acts, either of 
commission or omission, as such member, alternate, employee, or agent, 
except for acts of dishonesty, willful misconduct, or gross negligence.


Sec. 956.95  Separability.

    If any provision of this subpart is declared invalid, or the 
applicability thereof to any person, circumstance, or thing is held 
invalid, the validity of the remainder of this subpart, or the 
applicability thereof to any other person, circumstance, or thing shall 
not be affected thereby.


Sec. 956.96  Amendments.

    Amendments to this subpart may be proposed, from time to time, by 
the committee or by the Secretary.


Sec. 956.97  Counterparts.

    This agreement may be executed in multiple counterparts, and when 
one counterpart is signed by the Secretary, all such counterparts shall 
constitute, when taken together, one and the same instrument as if all 
signatures were contained in one original.


Sec. 956.98  Additional parties.

    After the effective date hereof, any handler may become a party to 
this agreement if a counterpart is executed by him and delivered to the 
Secretary. This agreement shall take effect as to such new contracting 
party at the time such counterpart is delivered to the Secretary, and 
the benefits, privileges, and immunities conferred by this agreement 
shall then be effective as to such new contracting party.


Sec. 956.99  Order with marketing agreement.

    Each signatory handler hereby requests the Secretary to issue, 
pursuant to the Act, an order providing for regulating the handling of 
Walla Walla Sweet Onions in the same manner as is provided for in this 
agreement.

    Dated: November 3, 1994.
Kenneth C. Clayton,
Acting Administrator.
[FR Doc. 94-27759 Filed 11-4-94; 3:53 pm]
BILLING CODE 3410-02-P