[Federal Register Volume 68, Number 131 (Wednesday, July 9, 2003)]
[Proposed Rules]
[Pages 40815-40817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17277]


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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. 68, No. 131 / Wednesday, July 9, 2003 / 
Proposed Rules  

[[Page 40815]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Docket No. FV03-958-01 PR]


Onions Grown in Certain Designated Counties in Idaho, and Malheur 
County, OR; Increased Assessment Rate and Defined Fiscal Period

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would increase the assessment rate 
established for the Idaho-Eastern Oregon Onion Committee (Committee) 
for the 2003-2004 and subsequent fiscal periods from $0.08 to $0.095 
per hundredweight of onions handled, and would establish, in the 
regulatory text, the Committee's fiscal period beginning July 1 of each 
year and ending June 30 of the following year. The Committee locally 
administers the marketing order that regulates the handling of onions 
grown in designated counties in Idaho, and Malheur County, Oregon. 
Authorization to assess onion handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program. 
The assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATE: Comments must be received by July 24, 2003.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, 
Washington, DC 20250-0237; Fax: (202) 720-8938, or E-mail: 
[email protected]. 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, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Susan M. Hiller, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW Third Ave, suite 385, Portland, 
OR 97204; Phone: (503) 326-2724; Fax: (503) 326-7440; or George 
Kelhart, Technical Advisor, Marketing Order Administration Branch, 
Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW, 
STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-2491, Fax: 
(202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 130 and Marketing Order No. 958, both as amended (7 CFR 
part 958), regulating the handling of onions grown in certain 
designated counties in Idaho, and Malheur County, 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 (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, Idaho-Eastern 
Oregon onion handlers are subject to assessments. Funds to administer 
the order are derived from such assessments. It is intended that the 
assessment rate as proposed herein would be applicable to all 
assessable onions beginning on July 1, 2003, 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 USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This proposed rule would increase the assessment rate established 
for the Committee for the 2003-2004 and subsequent fiscal periods from 
$0.08 to $0.095 per hundredweight of onions handled, and would 
establish, in the regulatory text, the Committee's fiscal period. The 
fiscal period begins July 1 of each year and ends June 30 of the 
following year.
    The order provides authority for the Committee, with the approval 
of USDA, to establish a fiscal period. The Committee has operated under 
a fiscal period of July 1 through June 30 since its inception in the 
late 1950's, but this period has never been specified in the regulatory 
text. This rule would add to the order's rules and regulations a 
definition of the Committee's fiscal period. The fiscal period would be 
defined to be the 12 month period beginning July 1 and ending June 30 
of the following year, both dates inclusive.
    The order also provides authority for the Committee, with the 
approval of USDA, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The Committee 
consists of six producer members, four handler members and one public 
member. They are familiar with the Committee's needs and with the costs 
for goods and services in their local area and are thus in a position 
to formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.

[[Page 40816]]

    For the 2000-2001 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on April 3, 2003, and in a vote of seven in 
favor, one against, and one abstention, recommended an assessment rate 
of $0.095 per hundredweight of onions handled. The assessment rate of 
$0.095 is $0.015 higher than the rate currently in effect. The order 
authorizes the Committee to establish an operating reserve of up to one 
fiscal period's operational expense. However, the Committee has 
maintained the operating reserve at a level of approximately one-half 
of one fiscal period's operational expenses. The Committee, over the 
last four fiscal periods, has reduced its operating reserve to this 
level. The Committee recommended the $0.015 increase so the total of 
assessment income ($870,200), contributions ($79,800), interest income 
($6,000), and other income ($1,000) would equal the recommended 
expenses for 2003-2004 of $957,000. With these revenue sources, the 
Committee would not need to access its operating reserve and would 
maintain the reserve at the current level.
    The Committee met on June 12, 2003 and unanimously recommended 
2003-2004 expenditures of $957,000. In comparison, last year's budgeted 
expenditures were $1,044,824. The major expenditures for the 2003-2004 
fiscal period include $10,000 for committee expenses, $148,353 for 
salary expenses, $72,610 for travel/office expenses, $59,170 for 
research expenses, $27,250 for export expenses, $589,617 for promotion 
expenses, and $50,000 for unforeseen marketing order contingencies. 
Budgeted expenses for these items in 2002-2003 were $10,000, $143,814, 
$77,460, $59,550, $54,000, $675,000, and $25,000, respectively.
    The Committee estimates that onion shipments for the 2003-2004 
fiscal period will be approximately 9,160,000 hundredweight, which 
should provide $870,200 in assessment income. Income derived from 
handler assessments, along with contributions ($79,800), interest 
income ($6,000), and other income ($1,000) would equal expenses. The 
Committee estimates that its operating reserve will be approximately 
$434,303 at the beginning of the 2003-2004 fiscal period. Funds in the 
reserve would be kept within the maximum permitted by the order of 
approximately one fiscal years's operational expenses (Sec.  958.44).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2003-2004 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 37 handlers of Idaho-Eastern Oregon onions 
who are subject to regulation under the order and approximately 250 
onion producers in the regulated production area. Small agricultural 
service firms are defined by the Small Business Administration (SBA) 
(13 CFR 121.201) as those whose annual receipts are less than 
$5,000,000, and small agricultural producers are defined as those whose 
annual receipts are less than $750,000.
    The Committee estimates that 32 of the 37 handlers of Idaho-Eastern 
Oregon onions ship under $5,000,000 worth of onions on an annual basis. 
According to the Vegetables 2002 Summary reported by the National 
Agricultural Statistics Service, the total farm gate value of onions in 
the regulated production area for 2002 was $93,807,000. Therefore, the 
2002 average gross revenue for an onion producer in the regulated 
production area was $375,228. Based on this information, it can be 
concluded that the majority of handlers and producers of Idaho-Eastern 
Oregon onions may be classified as small entities.
    This rule would specify in the regulatory text the Committee's 
fiscal period beginning July 1 of each year and ending June 30 of the 
following year, and increase the assessment rate established for the 
Committee for the 2003-2004 and subsequent fiscal periods from $0.08 to 
$0.095 per hundredweight of onions handled, and would establish, in the 
regulatory text, the Committee's fiscal period beginning July 1 of each 
year and ending June 30 of the following year. The Committee 
recommended an assessment rate of $0.095 per hundredweight, which is 
$0.015 higher than the rate currently in effect. The quantity of 
assessable onions for the 2003-2004 fiscal period is estimated at 
9,160,000 hundredweight. Thus, the $0.095 rate should provide $870,200 
in assessment income, which along with anticipated contributions, 
interest income, and other income is balanced to cover budgeted 
expenses expected to total about $957,000.
    The major expenditures recommended by the Committee for the 2003-
2004 fiscal period include $10,000 for committee expenses, $148,353 for 
salary expenses, $72,610 for travel/office expenses, $59,170 for 
research expenses, $27,250 for export expenses, $589,617 for promotion 
expenses, and $50,000 for unforeseen marketing order contingencies. 
Budgeted expenses for these items in 2002-2003 were $10,000, $143,814, 
$77,460, $59,550, $54,000, $675,000, and $25,000, respectively.
    The Committee reviewed and unanimously recommended 2003-2004 
expenditures of $957,000. This budget will increase the budget line 
items for salary expenses and marketing order contingencies, and 
decrease the budget line items for travel and office expenses, research 
expenses, export expenses, and promotion expenses. Prior to arriving at 
this budget, the Committee considered information from various sources, 
including the Idaho-Eastern Oregon Onion Executive, Research, Export, 
and Promotion Committees. These subcommittees discussed alternative 
expenditure levels, based upon the relative value of various research 
and promotion projects to the Idaho-Eastern Oregon onion industry. The 
assessment rate of $0.095 per hundredweight of

[[Page 40817]]

assessable onions was then determined by taking into consideration the 
estimated level of assessable shipments, other revenue sources, and the 
Committee's goal of not having to use reserve funds during 2003-2004.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2003-2004 season could be about $5.00 per hundredweight. 
Therefore, the estimated assessment revenue for the 2003-2004 fiscal 
period as a percentage of total producer revenue could be about 1.9 
percent.
    This proposed rule would increase the assessment obligation imposed 
on handlers. While assessments impose some additional costs on 
handlers, the costs are minimal and uniform on all handlers. Some of 
the additional costs may be passed on to producers. However, these 
costs would be offset by the benefits derived by the operation of the 
marketing order. In addition, the Committee's meetings were widely 
publicized throughout the Idaho-Eastern Oregon onion industry and all 
interested persons were invited to attend the meetings and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the April 3, and the June 12, 2003, meetings were open to the public 
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 not impose additional reporting or 
recordkeeping requirements on either small or large Idaho-Eastern 
Oregon 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2003-2004 fiscal period begins on July 1, 2003, and 
the order requires that the rate of assessment for each fiscal period 
apply to all assessable onions handled during such fiscal period; (2) 
the Committee needs to have sufficient funds to pay its expenses which 
are incurred on a continuous basis; and (3) handlers are aware of this 
action which was 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 958

    Onions, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 958 is 
proposed to be amended as follows:

PART 958--ONIONS GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND 
MALHEUR COUNTY, OREGON

    1. The authority citation for 7 CFR part 958 continues to read as 
follows:

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

    2. A new section 958.112 is added to read as follows:


Sec.  958.112  Fiscal period.

    The fiscal period shall begin July 1 of each year and end June 30 
of the following year, both dates inclusive.
    3. Section 958.240 is revised to read as follows:


Sec.  958.240  Assessment rate.

    On and after July 1, 2003, an assessment rate of $0.095 per 
hundredweight is established for Idaho-Eastern Oregon onions.

    Dated: July 2, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-17277 Filed 7-8-03; 8:45 am]
BILLING CODE 3410-02-P