[Federal Register Volume 73, Number 51 (Friday, March 14, 2008)]
[Proposed Rules]
[Pages 13798-13800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-5102]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Docket No. AMS-FV-07-0157; FV08-956-1 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 Marketing Committee (Committee) for the 
2008 and subsequent fiscal periods from $0.21 to $0.22 per 50-pound bag 
or equivalent of Walla Walla sweet onions handled. The Committee 
locally administers the marketing order which regulates the handling of 
sweet onions grown in the Walla Walla Valley of Southeast Washington 
and Northeast Oregon. Assessments upon Walla Walla sweet onion handlers 
are used by the Committee to fund the reasonable and necessary expenses 
of the program. The fiscal period begins January 1 and ends December 
31. The assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by May 13, 2008.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments should 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 Internet: http://www.regulations.gov. 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.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, 
Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503) 
326-7440, or E-mail: [email protected] or [email protected].
    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 and Order No. 956, both as amended (7 CFR part 956), 
regulating the handling of Walla Walla sweet onions grown in 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 (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, 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, as proposed herein, would be applicable to all 
assessable Walla Walla sweet onions beginning on January 1, 2008, and 
continue until amended, suspended, or terminated. This rule will 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 rule would increase the assessment rate established for the 
Committee for the 2008 and subsequent fiscal periods from $0.21 to 
$0.22 per 50-pound bag or equivalent of Walla Walla sweet onions 
handled.
    The Walla Walla sweet 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 members of the Committee are

[[Page 13799]]

producers and handlers of Walla Walla sweet onions. 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.
    For the 1998-1999 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate of $0.21 per 50-
pound bag or equivalent that would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon the basis of the 
Committee's recommendation or other information available to USDA.
    On December 11, 2007, the Committee met and unanimously recommended 
2008 expenditures of $116,255 and a $0.01 increase in the assessment 
rate from $0.21 to $0.22 per 50-pound bag or equivalent. In comparison, 
the budgeted expenditures for the 2007 fiscal period were $139,210.
    The increase in the assessment rate is necessary to offset the 
recent decline in assessments paid by handlers. Assessment receipts 
have decreased as the production levels of Walla Walla sweet onions 
have dropped below historical averages--a result of lower total acreage 
planted and isolated weather related crop failures. In response to the 
lower assessment income level, the Committee reduced the total budgeted 
expenditures from $139,210 in 2007 to $116,255 for 2008, but still 
found it necessary to increase the assessment rate to adequately fund 
Committee operations.
    The major expenditures recommended by the Committee for the 2008 
fiscal year include $62,732 for administration, $5,000 for travel, 
$44,000 for promotion, and $2,000 for compliance. Budgeted expenses for 
these items in 2007 was $62,477, $5,000, $63,300, and $1,000, 
respectively.
    The assessment rate recommended by the Committee was derived at by 
dividing anticipated expenses by expected shipments of Walla Walla 
sweet onions from the production area. Walla Walla sweet onion 
shipments are estimated to be 510,250 50-pound bags or equivalents for 
the 2008 fiscal period, which should provide $112,255 in assessment 
income. The remaining difference between the anticipated Committee 
expenses and the anticipated revenue from assessments is expected to 
come from interest income on reserve funds ($4,000). Funds held in 
reserve by the Committee (currently $144,953) are not expected to 
exceed the equivalent of two fiscal periods budgeted expenditures, the 
maximum permitted by the order.
    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 2008 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.
    There are approximately 42 producers of Walla Walla sweet onions in 
the production area and approximately 20 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (13 CFR 121.201) (SBA) as those 
having annual receipts less than $750,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$6,500,000.
    The Committee estimates that in 2007, 494,918 50-pound units of 
Walla Walla sweet onions were marketed at an average FOB price of 
approximately $19.00 per 50-pound unit. Using that price as a basis, 
the total industry value at shipping point was approximately 
$9,400,000. Average receipts per handler were $470,000, which is much 
less than the threshold the SBA uses to define a small service firm. 
Average receipts for the 42 producers of Walla Walla sweet onions for 
last year was approximately $225,000, well within the SBA definition of 
small agricultural producer. Thus, it can be concluded that most, if 
not all, handlers and producers of Walla Walla sweet onions may be 
classified as small entities based on the definition of the SBA.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2008 and subsequent 
fiscal periods from $0.21 to $0.22 per 50-pound bag or equivalent. The 
Committee unanimously recommended 2008 expenditures of $116,255 and an 
assessment rate of $0.22 per 50-pound bag or equivalent. The proposed 
assessment rate of $0.22 is $0.01 higher than the rate previously 
established in the order. The quantity of assessable Walla Walla sweet 
onions for the 2008 year is estimated at 510,250 50-pound bags or 
equivalents. Thus, the $0.22 rate should provide $112,255 in assessment 
income and, along with $4,000 in interest income, would be adequate to 
meet this year's budgeted expenses of $116,255.
    The major expenditures recommended by the Committee for the 2008 
year include $62,732 for administration, $5,000 for travel, $44,000 for 
promotion, and $2,000 for compliance. Budgeted expenses for these items 
in 2007 was $62,477, $5,000, $63,300, and $1,000, respectively.
    The recent decline in assessments collected from handlers has 
necessitated this assessment rate increase. Assessment income has 
decreased as the production levels of Walla Walla sweet onions have 
dropped below historical average levels as a result of lower total 
acreage planted and isolated weather related crop failures. In response 
to the lower assessment income level, the Committee reduced its total 
budgeted expenditures from $139,210 in 2007 to $116,255 for 2008, but 
still found it necessary to increase the assessment rate to adequately 
fund Committee operations without depleting the Committee's reserve 
funds.
    The Committee reviewed and unanimously recommended 2008 
expenditures of $116,255. Prior to arriving at this budget, the 
Committee considered information from various

[[Page 13800]]

sources, including the Finance and the Promotion sub-committees. 
Alternative expenditure levels were discussed at length by all parties. 
The assessment rate of $0.22 per 50-pound bag or equivalent of 
assessable Walla Walla sweet onions was then determined by dividing the 
total recommended budget by the quantity of assessable Walla Walla 
sweet onions, estimated at 510,250 50-pound units for the 2008 fiscal 
period. Anticipated assessment revenue is expected to be approximately 
$4,000 below the budgeted expenses, which the Committee determined to 
be acceptable. The Committee expects that interest income for the year 
will compensate for the $4,000 deficit, but is prepared to use reserve 
funds if necessary.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the grower price 
for Walla Walla sweet onions for the 2008 season could range between 
$10.00 and $12.00 per 50-pound bag or equivalent. Therefore, the 
estimated assessment revenue for the 2008 crop year as a percentage of 
total grower revenue could range between 1.83 and 2.20 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 
marketing 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 December 11, 2007, 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 comments on this 
proposed rule, including 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 production area 
commodity 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    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 60-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this matter.

List of Subjects in 7 CFR Part 956

    Marketing agreements, Onions, 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 revised to read as follows:


Sec.  956.202  Assessment rate.

    On and after January 1, 2008, an assessment rate of $0.22 per 50-
pound bag or equivalent is established for Walla Walla sweet onions.

    Dated: March 10, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E8-5102 Filed 3-13-08; 8:45 am]
BILLING CODE 3410-02-P