[Federal Register Volume 85, Number 62 (Tuesday, March 31, 2020)]
[Proposed Rules]
[Pages 17768-17770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06496]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Doc. No. AMS-SC-19-0115; SC20-956-1 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.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would implement a recommendation from the 
Walla Walla Sweet Onion Marketing Committee (Committee) to increase the 
assessment rate established for the 2020 and subsequent fiscal periods. 
The proposed assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by June 1, 2020.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
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 document 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. All comments submitted in response to 
this rule will be included in the record and will be made available to 
the public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Dale Novotny, Marketing Specialist, or 
Gary Olson, Regional Director, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA; Telephone: (503) 326-2724 or Email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
Agreement and Order No. 956, as amended (7 CFR part 956), regulating 
the handling of sweet onions grown in the Walla Walla Valley of 
southeast Washington and northeast Oregon. Part 956 (referred to as 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 Committee locally administers the Order and is comprised 
of producers and handlers of Walla Walla sweet onions operating within 
the production area, and a public member.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This proposed 
rule falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed rule does not meet the definition 
of a significant regulatory action, it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).
    This proposed 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 would be applicable to all assessable Walla Walla sweet 
onions for the 2020 fiscal period and continue until amended, 
suspended, or terminated.
    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 no later than 20 days after the date of the 
entry of the ruling.
    This proposed rule would increase the assessment rate from $0.10 
per 50-pound bag or equivalent of Walla Walla sweet onions handled, the 
rate that was established for the 2017 and subsequent fiscal periods, 
to $0.15 per 50-pound bag or equivalent of Walla Walla sweet onions 
handled for the 2020 and subsequent fiscal periods.
    The 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 are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area and are 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 2017 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate

[[Page 17769]]

of $0.10 per 50-pound bag or equivalent of Walla Walla sweet onions 
handled. That assessment rate continues 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 February 13, 2020, and unanimously recommended 
expenditures of $84,200 and an assessment rate of $0.15 per 50-pound 
bag or equivalent of Walla Walla sweet onions handled for the 2020 and 
subsequent fiscal periods. In comparison, last year's budgeted 
expenditures were $99,800. The proposed assessment rate of $0.15 is 
$0.05 higher than the rate currently in effect. The Committee 
recommended increasing the assessment rate to provide adequate income, 
along with interest income and reserve funds, to cover all of the 
Committee's budgeted expenses for the 2020 fiscal period. Funds in the 
reserve are expected to be approximately $104,377 at the end of the 
2020 fiscal period, which is within the Order's requirement of carrying 
over no more than approximately two years budgeted expenses.
    The major expenditures recommended by the Committee for the 2020 
year include $47,400 for administrative, $26,000 for promotions, $5,000 
for travel, $5,000 for research, and $800 for miscellaneous expenses. 
Budgeted expenses for these items for the 2019 fiscal period were 
$47,400, $41,600, $5,000, $5,000, and $800 respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses, an estimated crop of 389,952 50-pound 
bag or equivalents of Walla Walla sweet onions, and the amount of funds 
available in the authorized reserve. Income derived from handler 
assessments, calculated at $58,493 (389,952 50-pound bags or equivalent 
multiplied by $0.15 assessment rate), along with interest income and 
funds from the Committee's authorized reserve, would be adequate to 
cover budgeted expenses of $84,200. Funds in the reserve are estimated 
to be $104,377 at the end of the 2020 fiscal period.
    The assessment rate proposed in this rule 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 will 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 2020 budget, and those for 
subsequent fiscal periods, will be reviewed and, as appropriate, 
approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this proposed 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 
businesses 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 15 producers of Walla Walla sweet onions in 
the regulated area and approximately 11 handlers of Walla Walla sweet 
onions who are subject to regulation under the Order. Small 
agricultural producers are defined by the Small Business Administration 
(SBA) as those having annual receipts of less than $1,000,000, and 
small agricultural service firms have been defined as those whose 
annual receipts are less than $30,000,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the national average producer price for non-storage onions for the 
2011-2015 marketing years ranged from $15.10 to $22.10 per 
hundredweight. The average over those years was approximately $18.30 
per hundredweight, or $9.15 per 50-pound equivalent. NASS suspended 
reporting of non-storage onion prices in 2015 and no other more current 
third-party information regarding the producer price of sweet onions is 
available. Total production of Walla Walla sweet onions for the 2019 
season was 414,880 50-pound bags or equivalent. Using the price range 
from the 2011-2015 years for which there is NASS data, the total 2019 
farm gate value of the Walla Walla sweet onion crop could therefore be 
estimated to be between $6,264,688 and $9,168,848. Dividing the crop 
value by the estimated number of producers (15) yields an estimated 
average receipt per producer of between $417,646 and $611,257, which is 
well below the SBA threshold for small producers.
    USDA Market News reported a free on board (FOB) average price of 
$26.25 per 50-pound bag or equivalent of Walla Walla sweet onions for 
the 2019 season. Multiplying this FOB price by total 2019 shipments of 
414,880 50-pound bags or equivalent results in an estimated gross value 
of Walla Walla sweet onion shipments of $10,894,748. Dividing this 
figure by the number of handlers (11) yields estimated average annual 
handler receipts of $990,432, which is below the SBA threshold for 
small agricultural service firms. Therefore, using the above data, and 
assuming a normal distribution, the majority of producers and all of 
the handlers of Walla Walla sweet onions may be classified as small 
entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2020 and subsequent fiscal periods from $0.10 to $0.15 
per 50-pound bag or equivalent of Walla Walla sweet onions. The 
Committee unanimously recommended 2020 expenditures of $84,200 and an 
assessment rate of $0.15 per 50-pound bag or equivalent of Walla Walla 
sweet onions. The proposed assessment rate of $0.15 per 50-pound bag or 
equivalent is $0.05 higher than the current rate. The volume of 
assessable Walla Walla sweet onions for the 2020 fiscal period is 
estimated to be 389,953 50-pound bags or equivalent. Thus, the $0.15 
per 50-pound bag or equivalent rate should provide $58,493 in 
assessment income (389,953 multiplied by $0.15). Income derived from 
handler assessments, along with interest income and funds from the 
Committee's authorized reserve, would be adequate to cover budgeted 
expenses for the 2020 fiscal year.
    The major expenditures recommended by the Committee for the 2020 
year include $47,400 for administrative, $26,000 for promotions, $5,000 
for travel, $5,000 for research, and $800 for miscellaneous expenses. 
Budgeted expenses for these items in 2019 were $47,400, $41,600, 
$5,000, $5,000, and $800 respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the

[[Page 17770]]

assessment rate to fully fund 2020 fiscal period budgeted expenditures 
without excessively drawing down the funds held in its reserve. This 
action would maintain the Committee's reserve balance at a level that 
the Committee believes is appropriate and is compliant with the 
provisions of the Order.
    Prior to arriving at this budget and assessment rate 
recommendation, the Committee discussed various alternatives, including 
maintaining the current assessment rate of $0.10 per 50-pound bag or 
equivalent, and increasing the assessment rate by a different amount. 
However, the Committee determined that the recommended assessment rate 
would fully fund budgeted expenses and avoid drawing down reserves at 
an unsustainable rate.
    This proposed rule would increase the assessment obligation imposed 
on handlers. Assessments are applied uniformly on all handlers, and 
some of the costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the Order.
    The Committee's meeting was widely publicized throughout the Walla 
Walla sweet onion industry. All interested persons were invited to 
attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the February 13, 2020, meeting was 
a public meeting, and all entities, both large and small, were able to 
express views on this issue. Interested persons are invited to submit 
comments on this proposed rule, including the regulatory and 
information collection impacts of this action on small businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection requirements have been 
previously approved by the OMB and assigned OMB No. 0581-0178 Vegetable 
and Specialty Crops. No changes in those requirements would be 
necessary as a result of this proposed rule. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would not impose any 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.
    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 proposed 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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower 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, Reporting and recordkeeping requirements, 
Walla Walla sweet onions.

    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

0
1. The authority citation for 7 CFR part 956 continues to read as 
follows:

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

0
2. Section 956.202 is revised to read as follows:


Sec.  956.202  Assessment rate.

    On and after January 1, 2020, an assessment rate of $0.15 per 50-
pound bag or equivalent is established for Walla Walla sweet onions.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-06496 Filed 3-30-20; 8:45 am]
 BILLING CODE P