[Federal Register Volume 63, Number 67 (Wednesday, April 8, 1998)]
[Proposed Rules]
[Pages 17125-17127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9200]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 63, No. 67 / Wednesday, April 8, 1998 / 
Proposed Rules  

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Docket No. FV98-956-2 PR]


Sweet Onions Grown in the Walla Walla Valley of Southeast 
Washington and Northeast Oregon; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Walla Walla Sweet Onion Committee (Committee) under Marketing Order 
No. 956 for the 1998-99 and subsequent fiscal periods from $0.19 to 
$0.21 per 50-pound bag or equivalent of onions handled. The Committee 
is responsible for local administration of the marketing order which 
regulates the handling of sweet onions grown in portions of Walla Walla 
County, Washington, and Umatilla County, Oregon. Authorization to 
assess Walla Walla Sweet Onion handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program. 
The fiscal period begins June 1 and ends May 31. The assessment rate 
would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by May 8, 1998.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456, 
Washington, DC 20090-6456; Fax: (202) 205-6632. Comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register and will be available for public inspection in 
the Office of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, room 369, 
Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 326-
7440; or George Kelhart, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456, 
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-
6632. Small businesses may request information on compliance with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 
205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 956 (7 CFR part 956), regulating the handling 
of sweet onions grown in the Walla Walla Valley of southeast Washington 
and northeast Oregon, hereinafter referred to as the ``order.'' The 
order is effective under the Agricultural Marketing Agreement Act of 
1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the order now in effect, Walla Walla Sweet Onion 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rate 
proposed herein would be applicable to all assessable sweet onions 
beginning on June 1, 1998, and continue until amended, suspended, or 
terminated. This rule would not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. Such handler is afforded the opportunity for a hearing on 
the petition. After the hearing the Secretary would rule on the 
petition. The Act provides that the district court of the United States 
in any district in which the handler is an inhabitant, or has his or 
her principal place of business, has jurisdiction to review the 
Secretary's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.
    This rule would increase the assessment rate established for the 
Committee for the 1998-99 and subsequent fiscal periods from $0.19 per 
50-pound bag or equivalent to $0.21 per 50-pound bag or equivalent of 
Walla Walla Sweet Onions handled.
    The order provides authority for the Committee, with the approval 
of the Department, to formulate an annual budget of expenses and 
collect assessments from handlers to administer the program. The 
Committee consists of six producer members, three handler members and 
one public member, each of whom is familiar with the Committee's needs 
and with the costs for goods and services in their local area and are 
thus in a position to formulate an appropriate budget and assessment 
rate. The budget and assessment rate were discussed at a public meeting 
and all directly affected persons had an opportunity to participate and 
provide input.
    For the 1996-97 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by the Secretary upon recommendation and 
information submitted by the Committee or other information available 
to the Secretary.
    The Committee met on February 17, 1998, and unanimously recommended 
1998-99 expenditures of $97,272. In a vote with six favoring, three 
opposing, and one abstaining, the Committee recommended an assessment 
rate of $0.21 per 50-pound bag or equivalent handled during the 1998-99 
and subsequent fiscal periods. The Committee estimated that the 1998 
sweet onion crop will approximate 463,200 50-pound bags or equivalents 
of onions. In comparison, the 1997-98 fiscal period budget was 
established at $126,682 with an estimated assessable

[[Page 17126]]

poundage of 667,750 50-pound bags or equivalents of sweet onions. In an 
effort to partially offset the loss of assessment income due to the 
more conservative 1998 crop estimate, the Committee recommended the 
$0.02 increase.
    In both the 1996 and 1997 seasons, the actual quantity of 
assessable sweet onions produced for the fresh market was less than the 
Committee had estimated for the purpose of establishing the respective 
budgets. Actual assessment income earned during the 1997-98 fiscal 
period was approximately $30,000 less than was estimated for the 1997-
98 budget, and for the 1996-97 fiscal period, actual assessment income 
was approximately $26,000 less than was budgeted. For the 1998-99 
fiscal period, the Committee made its 1998 assessable crop estimate 
based on a lower average yield per acre than was used during the past 
two seasons. Based on a reported 772 acres planted, the Committee is 
anticipating a 1998 harvest averaging 600 50-pound bags or equivalents 
per acre. Thus, the 1998-99 fiscal period budget is formulated based on 
a crop estimate of 463,200 50-pound bags or equivalents of Walla Walla 
Sweet Onions. If the assessment rate is not increased from the 1997-98 
fiscal period rate of $0.19, funds would fall approximately $9,264 
short of 1998-99 fiscal period budgeted expenses, and this is not 
acceptable to a majority of the Committee. The members opposed believed 
that the assessment rate should be increased more than $0.02 per 50-
pound bag or equivalent, so more funds could be earmarked for promotion 
and paid advertising. The public member abstained because of his desire 
to remain neutral on these issues.
    After much discussion, the major expenditures recommended by the 
Committee for the 1998-99 fiscal period include $43,890 for 
administration, $10,000 for production research, $35,890 for market 
promotion including paid advertising, and $4,500 for marketing order 
compliance. Budgeted expenses for these items in the 1997-98 fiscal 
period were $41,700, $15,000, $51,000, and $9,000, respectively.
    The Committee based its recommended assessment rate increase on the 
1998 crop estimate and its estimate of 1998-99 fiscal period 
expenditures, including administrative costs and desired research and 
promotion projects. The Committee also took into consideration the 
impact an increase in the assessment rate would have on producers and 
handlers. The increased assessment rate should provide $97,272 in 
income which would be adequate to cover budgeted expenses. In the event 
the 1998 assessable sweet onion crop falls short of anticipated yields, 
the Committee estimates it will have approximately $25,000 in its 
operating reserve at the beginning of the 1998-99 fiscal period (June 
1, 1998), which should be adequate to cover any assessment shortages. 
This amount is within the maximum permitted by the order of 
approximately two fiscal period's budgeted expenses (Sec. 956.44).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by the Secretary upon 
recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department and are locally published. Committee meetings are open to 
the public and interested persons may express their views at these 
meetings. The Department would evaluate Committee recommendations and 
other available information to determine whether modification of the 
assessment rate is needed. Further rulemaking would be undertaken as 
necessary.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, the AMS 
has prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 60 producers of Walla Walla Sweet Onions in 
the production area and approximately 35 handlers subject to regulation 
under the order. Small agricultural producers have been defined by the 
Small Business Administration (13 CFR 121.601) as those having annual 
receipts less than $500,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $5,000,000. The 
majority of Walla Walla Sweet Onion producers and handlers may be 
classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 1998-99 and subsequent 
fiscal periods from $0.19 per 50-pound bag or equivalent to $0.21 per 
50-pound bag or equivalent of Walla Walla Sweet Onions handled. The 
Committee unanimously recommended 1998-99 expenditures of $97,272, and, 
with 6 members favoring, 3 members opposing and 1 member abstaining, 
recommended the $0.21 per 50-pound bag or equivalent assessment rate. 
The proposed assessment rate is $0.02 higher than the rate currently in 
effect. The Committee recommended an increased assessment rate to help 
offset the smaller projected crop of assessable sweet onions in 1998. 
The anticipated crop of 463,200 50-pound bags or equivalents is 
approximately 30 percent less than each of the 1996 and 1997 crops. The 
$0.21 rate should provide $97,272 in assessment income and be adequate 
to meet 1998-99 fiscal period expenses.
    The Committee discussed alternatives to this proposed rule, 
including alternative expenditure and assessment levels. The Committee 
discussed various alternative expenditure levels for promotion, 
production research, and marketing order compliance. Further, the 
Committee discussed various levels of assessment from the current $0.19 
to as much as $0.25 per 50-pound bag or equivalent of sweet onions. 
Action was taken by the Committee on a motion to increase the 
assessment rate by $0.01. The vote failed to carry a majority, however, 
since a $0.01 increase would not have adequately funded desired 
expenditures. The members opposed believed that the assessment rate 
should be increased more than $0.02 per 50-pound bag or equivalent, so 
more funds could be dedicated to promotion and paid advertising. The 
public member abstained because of his desire to remain neutral on 
these issues.
    After much discussion, the major expenditures recommended by the 
Committee for the 1998-99 fiscal period include $43,000 for 
administration, $10,000 for production research, $35,890 for market 
promotion including paid advertising, and $4,500 for marketing order 
compliance. Budgeted expenses for these items in the 1997-98 fiscal 
period were $41,700, $15,000, $51,000, and $9,000, respectively.
    Recent price information indicates that producer prices for all 
sizes and grades of Walla Walla Sweet Onions for the 1998 shipping 
season will range between $4.50 and $12.00 per 50-pound bag or 
equivalent. Thus, the estimated

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assessment revenue for the 1998-99 fiscal period as a percentage of 
total producer revenue would range between 0.017 and 0.046 percent.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the order. 
In addition, the Committee's meeting was widely publicized throughout 
the Walla Walla Sweet Onion industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the February 
17, 1998, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large Walla Walla Sweet 
Onion handlers. As with all Federal marketing order programs, reports 
and forms are periodically reviewed to reduce information requirements 
and duplication by industry and public sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    A 30-day comment period is provided to allow interested persons the 
opportunity to respond to this request for information and comments. 
Thirty days is deemed appropriate because: (1) The Committee needs to 
have sufficient funds to pay its expenses which are incurred on a 
continuous basis; (2) the 1998-99 fiscal period begins on June 1, 1998, 
and the order requires that the rate of assessment for each fiscal 
period apply to all assessable sweet onions handled during such fiscal 
period; and (3) handlers are aware of this action which was recommended 
by the Committee at a public meeting and is similar to other assessment 
rate actions issued in past years.

List of Subjects in 7 CFR Part 956

    Sweet onions, Marketing agreements, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 956 is 
proposed to be amended as follows:

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

    1. The authority citation for 7 CFR part 956 continues to read as 
follows:

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

    2. Section 956.202 is proposed to be revised to read as follows:


Sec. 956.202  Assessment rate.

    On and after June 1, 1998, an assessment rate of $0.21 per 50-pound 
bag or equivalent is established for Walla Walla Sweet Onions.

    Dated: April 2, 1998.
Robert C. Keeny,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-9200 Filed 4-7-98; 8:45 am]
BILLING CODE 3410-02-P