[Federal Register Volume 85, Number 133 (Friday, July 10, 2020)]
[Rules and Regulations]
[Pages 41323-41325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13502]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements 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 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective August 10, 2020.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Senior 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, 
implements an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This 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 rule in 
conformance with Executive Orders 13563 and 13175. This 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 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 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 
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 final rule increases the assessment rate from $0.10 per 50-
pound bag or equivalent, 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 of $0.10 per 50-
pound bag or equivalent of Walla Walla sweet onions handled. That 
assessment rate continued in effect from fiscal period to fiscal period 
until 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 fiscal period's budgeted 
expenditures were $99,800. The assessment rate of $0.15 is $0.05 higher 
than the rate previously in effect. The Committee recommended 
increasing the assessment rate to provide sufficient 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 $104,377 at the end of the 2020 fiscal period, which is 
within the Order's requirement of no more than approximately two fiscal 
period's budgeted expenses.
    The major expenditures recommended by the Committee for the 2020 
fiscal period 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.

[[Page 41324]]

    The Committee derived the recommended assessment rate by 
considering anticipated expenses, an estimated crop of 389,952 50-pound 
bags 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 
x $0.15 assessment rate), along with interest income and funds from the 
Committee's authorized reserve, will be adequate to cover budgeted 
expenses of $84,200.
    The assessment rate established in this rule will 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 will 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 will 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.

Final 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 rule on small entities. 
Accordingly, AMS has prepared this final 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. With total production at 
414,800 50-pound bags or equivalent for the 2019 season, and 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 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 free on board (FOB) price of $1.00 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 $8,712,480. Dividing this figure 
by the number of handlers (11) yields estimated average annual handler 
receipts of $792,044, 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 rule increases 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 assessment rate of $0.15 per 50-pound bag or equivalent is 
$0.05 higher than the rate previously in effect. The volume of 
assessable Walla Walla sweet onions for the 2020 fiscal period is 
estimated at 393,953 50-pound bags or equivalent. Thus, the $0.15 per 
50-pound bag or equivalent rate should provide $58,493 in assessment 
income (389,952 50-pound bags or equivalent x $0.15 assessment rate). 
Income derived from handler assessments, along with interest income and 
funds from the Committee's authorized reserve, will be adequate to 
cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2020 
fiscal period 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 its reserve funds to 
partially fund its budget expenditures. The Committee recommended 
increasing the assessment rate to fully fund budgeted expenditures 
without drawing down the funds held in reserve too quickly. This action 
will 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 the Committee 
discussed various alternatives, including maintaining the current 
assessment rate of $0.10 per 50-pound bag or equivalent rate and 
increasing the assessment rate to a different amount. However, the 
Committee determined that the recommended assessment rate will fully 
fund budgeted expenses and avoid drawing down reserves at an 
unsustainable rate.
    This rule increases 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 are expected 
to 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. Finally, interested persons were invited 
to submit comments on this 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

[[Page 41325]]

assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in 
those requirements will be necessary as a result of this rule. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    This rule will 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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
final rule.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on March 31, 2020 (85 FR 17768). Copies of the proposed rule 
were also mailed or sent via email to all Walla Walla sweet onion 
handlers. The proposal was made available through the internet by USDA 
and the Office of the Federal Register. A 60-day comment period ending 
June 1, 2020, was provided for interested persons to respond to the 
proposal. No comments were received. Accordingly, no changes will be 
made to the proposed rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://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.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule will tend to 
effectuate the declared policy of the Act.

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 
amended as follows:

PART 956--WALLA WALLA 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. 2020-13502 Filed 7-9-20; 8:45 am]
BILLING CODE P