[Federal Register Volume 88, Number 237 (Tuesday, December 12, 2023)]
[Proposed Rules]
[Pages 86066-86069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27213]


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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. 88, No. 237 / Tuesday, December 12, 2023 / 
Proposed Rules  

[[Page 86066]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Doc. No. AMS-SC-23-0033]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Idaho-Eastern Oregon Onion Committee (Committee) to increase the 
assessment rate established for the 2023-2024 and subsequent fiscal 
periods. The proposed assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by January 11, 2024.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments can be sent to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments can also be submitted to the Docket Clerk electronically by 
Email: [email protected] or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register. 
Comments submitted in response to this proposed rule will be included 
in the record and will be made available to the public and can be 
viewed at: https://www.regulations.gov. 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: Josh Wilde, Marketing Specialist, or 
Gary Olson, Chief, West Region Branch, Market Development 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, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, 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 No. 130 and Marketing Order No. 958, both as amended (7 CFR 
part 958), regulating the handling of onions grown in certain counties 
in Idaho, and Malheur County, Oregon. Part 958 (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 onions operating within the area of 
production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866, 13563, and 14094. 
Executive Orders 12866 and 13563 direct agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. Executive 
Order 14094 reaffirms, supplements, and updates Executive Order 12866 
and further directs agencies to solicit and consider input from a wide 
range of affected and interested parties through a variety of means. 
This proposed action falls within a category of regulatory actions that 
the Office of Management and Budget (OMB) exempted from Executive Order 
12866 review.
    This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires Federal agencies to consider whether their rulemaking actions 
would have Tribal implications. AMS has determined that this proposed 
rule is unlikely to have substantial direct effects on one or more 
Indian Tribes, on the relationship between the Federal Government and 
Indian Tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes.
    This proposed rule has been reviewed under Executive Order 12988--
Civil Justice Reform. Under the 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 would be applicable to all assessable Idaho-Eastern 
Oregon onions for the 2023-2024 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 the U.S. Department 
of Agriculture (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 for Idaho-
Eastern Oregon onions handled under the Order from $0.05 per 
hundredweight, the rate that was established for the 2015-2016 and 
subsequent fiscal periods, to $0.07 per hundredweight for the 2023-2024 
and subsequent fiscal periods.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and

[[Page 86067]]

collect assessments from handlers to administer the program. The 
members of the Committee are familiar with the Committee's needs and 
with the costs of goods and services in their local area and are able 
to formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting, and all directly 
affected persons have an opportunity to participate and provide input.
    For the 2015-2016 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate of $0.05 per 
hundredweight of Idaho-Eastern Oregon onions within the production 
area. That rate continues in effect from fiscal period to fiscal period 
until modified, suspended, or terminated by AMS upon recommendation and 
information submitted by the Committee or other information available 
to AMS.
    The Committee met on June 27, 2023, and recommended 2023-2024 
fiscal period expenditures of $1,039,785 and an assessment rate of 
$0.07 per hundredweight of Idaho-Eastern Oregon onions handled for the 
2023-2024 and subsequent fiscal periods with a vote of 7 in favor and 
none opposed. In comparison, last fiscal period's budgeted expenditures 
were $819,435. The proposed assessment rate of $0.07 per hundredweight 
is $0.02 higher than the rate currently in effect. The Committee 
recommended increasing the assessment rate to more fully fund the 
Committee's operations without relying on its financial reserve funds. 
The Committee has drawn down its financial reserve in recent years to 
cover Committee expenses as unfavorable growing conditions have caused 
the volume of assessable onion shipments to fall well below what the 
Committee had expected. Therefore, actual assessment income collected 
for the 2021-2022 and 2022-2023 fiscal periods was significantly less 
than projected. The Committee is cautiously optimistic that conditions 
would improve, projecting handler shipments of 10,000,000 hundredweight 
of assessable Idaho-Eastern Oregon onions for the 2023-2024 fiscal 
period, which is the same as initially projected for the 2022-2023 
fiscal period.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $190,000 for research; $175,000 for 
promotion; $21,000 for export initiatives; $118,529 in salary expenses; 
$55,270 for travel/office expenses; $15,000 for marketing order 
contingency; and $6,000 for Committee expenses. By comparison, for the 
2022-2023 fiscal period, budgeted expenses for research, promotion, 
export initiatives, salaries, travel/office, and marketing order 
contingency were $263,061; $200,000; $126,000; $103,004; $96,370; 
$25,000; and $6,000, respectively. The Committee's 2023-2024 budget 
also includes a separate line-item expense of $458,986 for ``grant 
expenses'' which refers to other research and development projects 
funded with reimbursable Specialty Crop Block Grant Program funds. This 
category reflects the total grant amount awarded for approved research, 
promotion, and export activities. In previous budgets, these funds were 
allocated to the individual programs where those funds would be 
utilized (e.g., research, promotion, and export). However, the 
Committee felt that holding these expenditures as a separate expense 
category for the 2023-2024 fiscal period helped differentiate 
activities funded exclusively through assessment income from those 
funded through reimbursable grants. The Committee submits each project 
under the Specialty Crop Block Grant to the State of Idaho for 
evaluation and approval prior to reimbursement.
    The expected 10,000,000 hundredweight of Idaho-Eastern Oregon 
onions from the 2023-2024 crop would generate $700,000 in assessment 
revenue at the proposed assessment rate (10,000,000 hundredweight of 
onions multiplied by $0.07 assessment rate). The 2023-2024 fiscal 
period assessment rate increase should be appropriate to ensure the 
Committee has sufficient revenue, along with an anticipated $458,986 in 
funds awarded through the Specialty Crop Block Grant Program and 
$23,850 in other income, to fully fund its recommended 2023-2024 fiscal 
period budgeted expenditures and begin replenishing the Committee's 
reserve funds to a level that the Committee believes is appropriate.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses and the estimated 2023 
crop volume of 10,000,000 hundredweight of assessable Idaho-Eastern 
Oregon onions. Income derived from handler assessments ($700,000), 
Specialty Crop Block Grants ($458,986), and other sources including 
interest income and voluntary contributions ($23,850), should be more 
than adequate to cover budgeted expenses ($1,039,785). The Committee 
projects a positive net difference between 2023-2024 fiscal period 
income and expenses of $143,051. This amount would help replenish the 
Committee's reserve fund from an estimated $230,351 on July 1, 2023, to 
an estimated $373,402 on July 1, 2024, a figure much more closely 
aligned with the Committee's preferred reserve balance of approximately 
half of one year's operational expenses.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS 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 AMS. Committee meetings are open to the public and interested 
persons may express their views at these meetings. AMS 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 2023-2024 
fiscal period budget, and those for subsequent fiscal periods, will be 
reviewed and, as appropriate, approved by AMS.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 190 producers of Idaho-Eastern Oregon 
onions in the production area and 30 handlers subject to regulation 
under the Order. Small agricultural producers of onions are defined by 
the Small Business Administration (SBA) as those having annual receipts 
of less than $3,750,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $34,000,000 (13 
CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average annual producer price

[[Page 86068]]

received for dry fresh market onions in Idaho and Malheur County, 
Oregon, in 2021, the most recent year for which there is NASS data, was 
$21.10 per hundredweight. Total production of Idaho-Eastern Oregon 
onions for the 2021 season was reported by the Committee to be 
9,281,912 hundredweight. Using the average producer price from 2021, 
the total 2021-2022 crop value of Idaho-Eastern Oregon onions could 
therefore be estimated to be $195,848,343 (9,281,912 hundredweight 
times $21.10 per hundredweight). Dividing the crop value by the 
estimated number of producers (190) yields an estimated average receipt 
per producer of $1,030,780, which is well below the SBA threshold for 
small producers.
    In addition, according to AMS Market News data, the reported 
average free on board (FOB) price for onions from Idaho-Eastern Oregon 
over the 2021-2022 fiscal period was between $15.00 and $20.00 per 50-
pound carton, depending upon variety, size and grade, and shipping 
date. Assuming an average of $17.50 for the fiscal period and 
multiplying this figure by 2 (to adjust to hundredweight) yields an 
average FOB price of $35.00 per hundredweight for the 2021-2022 fiscal 
period. Multiplying the 2021-2022 Idaho-Eastern Oregon onion production 
of 9,281,912 hundredweight by the estimated average price per 
hundredweight of $35.00 equals $324,866,920. Dividing this figure by 
the 30 regulated handlers yields estimated average annual handler 
receipts of $10,828,897 ($324,866,920 divided by 30 handlers), which is 
below the SBA threshold for small agricultural service firms. 
Therefore, using the above data and assuming a normal distribution, 
most of the producers and handlers of Idaho-Eastern Oregon onions may 
be classified as small entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2023-2024 and subsequent fiscal periods from $0.05 to 
$0.07 per hundredweight of Idaho-Eastern Oregon onions. The Committee 
unanimously recommended 2023-2024 fiscal period expenditures of 
$1,039,785 and an assessment rate of $0.07 per hundredweight of Idaho-
Eastern Oregon onions. The proposed assessment rate of $0.07 is $0.02 
higher than the current rate. The Committee expects the industry to 
handle 10,000,000 hundredweight of Idaho-Eastern Oregon onions during 
the 2023-2024 fiscal period. Thus, the $0.07 per hundredweight rate 
should provide $700,000 in assessment income (10,000,000 multiplied by 
$0.07). The Committee expects to use an anticipated $458,986 awarded 
from the Specialty Crop Block Grant Program to cover remaining 
expenses. Income derived from handler assessments, Specialty Crop Block 
Grant Program funds, and other sources including interest income and 
voluntary contributions, should be more than adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $190,000 for research committee, $175,000 
for promotion committee, $21,000 for export committee, $118,529 in 
salary expenses, $55,270 for travel/office expenses, $15,000 for 
marketing order contingency, and $6,000 in committee expenses. By 
comparison, for the 2022-2023 fiscal period, budgeted expenses for 
research, promotion, export initiatives, salaries, travel/office, and 
marketing order contingency were $263,061, $200,000, $126,000, 
$103,004, $96,370, $25,000, and $6,000, respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to fully fund 2023-2024 fiscal period 
budgeted expenditures and replenish funds held in its reserve. This 
action would add an estimated $143,051 to the Committee's financial 
reserve fund. The reserve balance would be kept at a level that the 
Committee believes is appropriate and which is compliant with the 
provisions of the Order.
    Prior to arriving at this budget and proposed assessment rate, the 
Committee discussed various alternatives, including maintaining the 
current assessment rate of $0.05 per hundredweight and increasing the 
assessment rate by different amounts. However, the Committee determined 
that the recommended assessment rate would fully fund budgeted expenses 
and replenish reserves to appropriate levels. The assessment rate of 
$0.07 per hundredweight of Idaho-Eastern Oregon onions was derived by 
considering anticipated expenses, the projected volume of assessable 
Idaho-Eastern Oregon onions, grant funds awarded, the projected 
monetary balance held in reserve, and additional pertinent factors.
    A review of NASS information indicates that the average producer 
price for the 2021-2022 fiscal period was $21.10 per hundredweight of 
onions in the production area. Further, the Committee reported the 
quantity of assessable Idaho-Eastern Oregon onions harvested in the 
2021-2022 fiscal period was 9,281,912 hundredweight, which yields 
estimated total producer revenue of $195,848,343 ($21.10 per 
hundredweight multiplied by 9,281,912). Therefore, utilizing the 
assessment rate of $0.07 per hundredweight, assessment revenue for the 
2021-2022 fiscal period, as a percentage of total producer revenue, 
would be approximately 0.33 percent of total producer revenue ($0.07 
multiplied by 9,281,912 per hundredweight divided by $195,848,343 and 
multiplied by 100).
    This proposed action would increase the assessment obligation 
imposed on Idaho-Eastern Oregon onion 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 meetings are widely publicized throughout the 
production area. The Idaho-Eastern Oregon onion industry and all 
interested persons are invited to attend the meetings and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the June 27, 2023, 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 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 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 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.
    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.

[[Page 86069]]

    AMS 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: 
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 recommendations submitted by the Committee and 
other available information, USDA has determined that this proposed 
rule is consistent with and will effectuate the purposes of the Act.
    A 30-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 rule.

List of Subjects in 7 CFR Part 958

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 958 as follows:

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

0
1. The authority citation for 7 CFR part 958 continues to read as 
follows:

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

0
2. Revise Sec.  958.240 to read as follows:


Sec.  958.240  Assessment rate.

    On and after July 1, 2023, an assessment rate of $0.07 per 
hundredweight is established for Idaho-Eastern Oregon onions.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-27213 Filed 12-11-23; 8:45 am]
BILLING CODE P