[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]
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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.
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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