[Federal Register Volume 69, Number 99 (Friday, May 21, 2004)]
[Proposed Rules]
[Pages 29244-29246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11514]


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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. 69, No. 99 / Friday, May 21, 2004 / Proposed 
Rules  

[[Page 29244]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Docket No. FV04-958-02 PR]


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

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 2004-2005 and subsequent fiscal periods from $0.095 to $0.105 
per hundredweight of onions handled. 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 fiscal 
period begins July 1 and ends June 30. The assessment rate would remain 
in effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by June 21, 2004.

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; E-mail: 
[email protected]; or Internet: http://www.regulations.gov. All 
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: Barry Broadbent, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW Third Ave, Suite 385, Portland, 
OR 97204; telephone: (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, 2004, 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 2004-2005 and subsequent fiscal periods from 
$0.095 to $0.105 per hundredweight of onions handled.
    The Idaho-Eastern Oregon onion marketing order 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. Each member 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 assessment rate is formulated and 
discussed in a public meeting. Thus, all directly affected persons have 
an opportunity to participate and provide input.
    For the 2003-2004 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 1, 2004, and unanimously recommended 
2004-2005 expenditures of $997,442. In comparison, last year's budgeted 
expenditures were $957,000. At that same meeting, the Committee, in a 
vote of seven in favor, two opposed (desired continuation of the 
current rate), and

[[Page 29245]]

one abstention, recommended increasing the assessment rate to $0.105 
per hundredweight of onions handled. The assessment rate of $0.105 is 
$0.01 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's policy is to 
maintain the operating reserve at a level of approximately one-half of 
one fiscal period's operational expenses. The Committee, over the last 
five fiscal periods, has reduced its operating reserve to slightly 
below this level. The Committee recommended the $0.01 increase so the 
total of assessment income ($932,400), contributions ($75,600), 
interest income ($7,000), and other income ($2,000) would sufficiently 
fund the recommended expenses for 2004-2005 of $997,442. The increased 
assessment income would also add approximately $19,558 to the operating 
reserve, increasing it to an estimated $504,661 at the end of the 2004-
2005 fiscal period.
    The major expenditures recommended by the Committee for the 2004-
2005 fiscal period include $10,000 for committee expenses, $163,482 for 
salary expenses, $81,9600 for travel/office expenses, $60,000 for 
production research expenses, $32,000 for export market development 
expenses, $600,000 for promotion expenses, and $50,000 for unforeseen 
marketing order contingencies. Budgeted expenses for these items in 
2002-2003 were $10,000, $148,353, $72,610, $59,170, $27,250, $589,617, 
and $50,000, respectively.
    The Committee estimates that fresh market onion shipments for the 
2004-2005 fiscal period will be approximately 8,880,000 hundredweight, 
which should provide $932,400 in assessment income. Income derived from 
handler assessments, along with contributions ($75,600), interest 
income ($7,000), and other income ($2,000) would be sufficient to cover 
budgeted expenses and increase the operating reserve approximately 
$19,558. The Committee estimates that its operating reserve will be 
approximately $485,103 at the beginning of the 2004-2005 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 2004-2005 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 2003 Summary reported by the National 
Agricultural Statistics Service, the total farm gate value of onions in 
the regulated production area for 2003 was $130,768,000. Therefore, the 
2003 average gross revenue for an onion producer in the regulated 
production area was $523,072. 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 increase the assessment rate established for the 
Committee for the 2004-2005 and subsequent fiscal periods from $0.095 
to $0.105 per hundredweight of onions handled. The Committee 
recommended 2004-2005 expenditures of $997,442 and an assessment rate 
of $0.105 per hundredweight, which is $0.01 higher than the rate 
currently in effect. The quantity of assessable onions for the 2004-
2005 fiscal period is estimated at 8,880,000 hundredweight. Thus, the 
$0.105 rate should provide $932,400 in assessment income, which along 
with anticipated contributions, interest income, and other income 
should cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2004-
2005 fiscal period include $10,000 for committee expenses, $163,482 for 
salary expenses, $81,960 for travel/office expenses, $60,000 for 
production research expenses, $32,000 for export market development 
expenses, $600,000 for promotion expenses, and $50,000 for unforeseen 
marketing order contingencies. Budgeted expenses for these items in 
2003-2004 were $10,000, $148,353, $72,610, $59,170, $27,250, $589,617, 
and $50,000, respectively.
    The Committee reviewed and unanimously recommended 2004-2005 
expenditures of $997,442. This budget would increase the budget line 
items for salary expenses, travel and office expenses, research 
expenses, export expenses, and promotion expenses. Committee expenses 
and marketing order contingency would remain the same. 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 $0.105 per hundredweight of 
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 2004-2005.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2004-2005 season could be about $10.80 per hundredweight. 
Therefore, the estimated assessment revenue for the 2004-2005 fiscal 
period as a percentage

[[Page 29246]]

of total producer revenue could be about 1.1 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 1, 2004, meeting was 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 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2004-2005 fiscal period begins on July 1, 2004, 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. Section 958.240 is revised to read as follows:


Sec.  958.240  Assessment rate.

    On and after July 1, 2004, an assessment rate of $0.105 per 
hundredweight is established for Idaho-Eastern Oregon onions.

    Dated: May 17, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-11514 Filed 5-20-04; 8:45 am]
BILLING CODE 3410-02-P