Sweet Onions Grown in the Walla Walla Valley of Southeast Washington and Northeast Oregon; Establishment of Handler Reporting Requirements and Interest Charges on Overdue Assessment Payments

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[FV96-956-1 FR]

Sweet Onions Grown in the Walla Walla Valley of Southeast

Washington and Northeast Oregon; Establishment of Handler Reporting

Requirements and Interest Charges on Overdue Assessment Payments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule establishes handler reporting requirements and

establishes interest charges on overdue assessments. This rule will

contribute to the efficient operation of the program by helping to

ensure that assessments are available in a timely manner to cover

budgeted expenses incurred under the marketing order. The Walla Walla

Sweet Onion Committee (Committee) believes that these actions are the

only alternatives available to ensure timely payments of assessments.

These actions are expected to reduce the need for compliance efforts

and thereby reduce the costs to administer the order.

EFFECTIVE DATE: August 29, 1996.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Marketing Specialist,

Northwest Marketing Field Office, Marketing Order Administration

Branch, Fruit and Vegetable Division, AMS, USDA, 1220 SW Third Avenue,

room 369, Portland, Oregon 97204-2807; telephone: (503) 326-2724; or

Robert F. Matthews, Marketing Specialist, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, PO Box

96456, room 2523-S, Washington, DC 20090-6456; telephone: (202) 690-

0464. Small businesses may request information on compliance with this

regulation by contacting: Jay Guerber, Marketing Order Administration

Branch, PO Box 96456, room 2523-S, Washington, DC 29909- 6456;

telephone (202) 720-2491, FAX (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is effective under Marketing

Agreement and Order No. 956 (7 CFR part 956), regulating the handling

of sweet onions grown in the Walla Walla Valley of southeast Washington

and northeast Oregon, hereinafter referred to as the ``order.'' The

order is authorized by the Agricultural Marketing Agreement Act of

1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the

``Act.'' This final rule was recommended by the Committee , the agency

responsible for the local administration of the marketing order for

sweet onions grown in the Walla Walla Valley.

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This final rule has been reviewed under Executive Order 12988,

Civil Justice Reform. It is not intended to have retroactive effect. If

adopted, the rule will not preempt any State or local laws,

regulations, or policies, unless they present an irreconcilable

conflict with the proposal.

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 Secretary 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. A handler is afforded the opportunity for a hearing on the

petition. After the hearing the Secretary 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 the Secretary's

ruling on the petition, provided an action is filed not later than 20

days after the date of the entry of the ruling.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the AMS has considered the economic impact of this action on

small entities.

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 rules issued thereunder, are unique in that

they are brought about through group action of essentially small

entities acting on their own behalf. Thus, both statutes have small

entity orientation and compatibility.

There are approximately 30 handlers of Walla Walla Sweet Onions

subject to regulation under the marketing order and approximately 50

producers in the regulated production area. Small agricultural service

firms have been defined by the Small Business Administration (13 CFR

121.601) as those having annual receipts of less than $5,000,000, and

small agricultural producers are defined as those whose annual receipts

are less than $500,000. The majority of Walla Walla Sweet Onion

handlers and producers may be classified as small entities.

This final rule establishes interest charges on overdue assessments

and establishes handler reporting requirements.

This final rule will contribute to the efficient operation of the

program by helping to ensure that assessments are available in a timely

manner to cover budgeted expenses incurred under the marketing order.

Those persons large and small who pay in a timely manner will not be

subject to an interest charge. The changes establishing interest

charges are expected to reduce the need for compliance efforts and

thereby reduce the costs to administer the order which will benefit all

persons who are subject to assessments.

The preparation of one form one time each year with shipment

information should not constitute a significant burden on a business

unit, small or large. The estimated reporting burden per response is

0.323 hours. In addition, gift box and roadside stand sales are exempt

from reporting the region to which shipments are made, which should be

particularly favorable to small entities.

Therefore, the AMS has determined that this action will not have a

significant economic impact on a substantial number of small entities.

The Committee meets prior to each season to consider

recommendations for modification, suspension, or termination of the

regulatory requirements for Walla Walla Sweet Onions. Committee

meetings are open to the public and interested persons may express

their views at these meetings. The Department reviews Committee

recommendations and information submitted by the Committee and other

available information, and determines whether modification, suspension,

or termination of the regulatory requirements tends to effectuate the

declared policy of the Act.

At its February 15, 1996, meeting the Committee unanimously

recommended the addition of administrative rules and regulations that

provide a late payment charge for delinquent assessments and a

reporting requirement for handlers.

The Act provides that each handler shall pay to the Committee such

handler's pro rata share of Committee expenses that the Secretary finds

are reasonable and likely to be incurred for the maintenance and

functioning of the Committee. Section 956.42 authorizes the Committee

to levy assessments on handlers of Walla Walla Sweet Onions to cover

each handler's share of Committee expenses.

Section 956.42(f) provides the authority for the Committee to

impose, with the approval of the Secretary, a late

[[Page 44151]]

payment or an interest charge on handlers who fail to pay any

assessment in a timely manner. This final rule establishes an interest

charge of 1\1/2\ percent per month to be applied to any assessment

balance remaining unpaid on October 1 of each year.

The Committee depends upon handler assessments for operating funds.

Last year, the first season of operation of the order, some handlers

were late with their assessment payments, with fewer than half

submitting their assessment payments when due. When assessments are not

paid in a timely manner, the handlers paying assessments on time are

placed in an unfair situation compared to the delinquent handlers.

As part of its collection efforts, the Committee requested

delinquent handlers to promptly submit assessment payments. However,

such requests did not substantially hasten the payment of such

delinquent assessments, a few of which were over 120 days delinquent.

To facilitate the collection of assessments needed for the maintenance

and functioning of the Committee, the Committee recommended the

establishment of an interest charge of 1\1/2\ percent per month to be

applied to assessment balances unpaid after 30 days. Annual assessments

are due from handlers on September 1. The 1\1/2\ percent interest

charge will be applied monthly, after September 30, to the unpaid

balance, including any accumulated interest.

This change is intended to encourage handlers to pay their

assessments when due, thereby eliminating potential inequities towards

handlers who pay their assessments on time. It contributes to the

efficient operation of the program by ensuring that adequate funds are

available to cover expenses incurred under the marketing order.

Section 956.80 provides authority for the Committee, with the

approval of the Secretary, to require that each handler furnish to the

Committee, in such manner and at such time as it may prescribe, such

reports and other information as may be necessary for the Committee to

perform its duties under the marketing order.

Pursuant to this authority, this final rule also establishes a

requirement that each handler submit an annual report, on a form

provided by the Committee, showing their weekly and total yearly

shipments of Walla Walla Sweet Onions by geographical region. The

annual handler reporting requirement will provide the Committee with

statistical information regarding total industry shipments which will

be useful to the Committee in developing a budget and in making

marketing and promotion plans for the upcoming season. The form

includes the total number of 50 pound equivalents of Walla Walla Sweet

Onions shipped during each week of the shipping season and an end of

season total. The form will also require handlers to indicate the

geographical regions to which onions are shipped. Information on the

geographical region to which shipments are made will be useful to the

Committee in planning marketing and promotional activities. The

Committee has drawn up boundaries of 11 geographical regions to help it

in developing its marketing and promotional plans. To effectively

promote and market Walla Walla Sweet Onions, knowledge of market

conditions and access to accurate statistical information is

invaluable. The Committee recommended that handlers be exempt from

having to indicate the geographical region to where the onions were

shipped when making roadside stand and gift box sales. The Committee

feels that having to report the geographical region shipped for every

bag of onions sold in these outlets will be burdensome to handlers

making such shipments.

The form also requires handlers to provide their name and address

to properly identify the firm, as a basis for verifying compliance with

the assessment provisions of the order.

In addition to marketing and promotion planning, the information on

the form will help compliance efforts by keeping the Committee informed

of handlers' operations. It will enable the Committee manager to become

aware of potential problems and discuss them with the handlers involved

before violations occur, thus reducing the need for, and the expense

of, compliance action by the Committee and the Department.

To implement these changes, a new Subpart--Rules and Regulations is

added to part 956. Sections 956.142 Interest charges., and 956.180

Reports. are included in that subpart.

The proposed rule concerning these actions was published in the

July 15, 1996, Federal Register (61 FR 36827), with a 15-day comment

period ending July 30, 1996. No comments were received.

The proposed rule also announced that AMS intended to request a

revision to the currently approved information collection for Walla

Walla Sweet Onions under the Paperwork Reduction Act of 1955 (44 U.S.C.

Chapter 35). The revision of the approved information collection is

necessary to cover the new annual shipment report to be submitted by

handlers to the Committee. Comments concerning this revision must be

received not later than September 13, 1996.

Because there is insufficient time for normal clearance procedures,

AMS has received temporary approval from the Office of Management and

Budget (OMB) for the use of this form for the 1996 shipping season. The

form has been added to the other 5 forms currently approved for use

under OMB Number 0581-0172. The information collection revision will be

sent to OMB for final approval after September 13, 1996. All comments

received on the revision will be summarized and included in the request

for final OMB approval.

After consideration of all relative material presented, including

the committee's recommendation, and other available information, it is

hereby found that this final rule, as hereinafter set forth, will tend

to effectuate the declared policy of the Act.

It is further found that good cause exists for not postponing the

effective date of this action until 30 days after publication in the

Federal Register because: (1) This rule should be effective promptly so

the Committee can gather information on shipments prior to the

September 1 assessment billing date; (2) this rule was unanimously

recommended at a public meeting and all interested persons had an

opportunity to express their views and provide input; and (3) Walla

Walla Sweet Onion handlers are aware of this rule and need no

additional time to comply with the requirements.

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

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. A new Subpart--Rules and Regulations consisting of sections

956.142 and 956.180 are added to read as follows:

Subpart--Rules and Regulations

Sec. 956.142 Interest charges.

The Committee shall impose an interest charge on any handler who

fails to pay his or her annual assessments

[[Page 44152]]

within thirty (30) days of the due date of September 1. The interest

charge shall, after 30 days, be 1\1/2\ percent of the unpaid assessment

balance. In the event the handler fails to pay the delinquent

assessment amount within 60 days following the due date, the 1\1/2\

percent interest charge shall be applied monthly thereafter to the

unpaid balance, including any accumulated interest. Any amount paid by

a handler as an assessment, including any charges imposed pursuant to

this paragraph, shall be credited when the payment is received in the

Committee office.

Sec. 956.180 Reports.

Each handler shall furnish to the Committee by September 1 of each

year an annual report containing the following information, except that

gift-box and roadside stand sales shall be exempt from paragraph (b):

(a) The number of 50 lb. equivalents of Walla Walla Sweet Onions

shipped by each handler during each week of the shipping season and the

total for the season;

(b) The geographical regions as defined by the Committee to which

each shipment is made; and

(c) The name, address, and signature of each handler.

Dated: August 22, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-21958 Filed 8-27-96; 8:45 am]

BILLING CODE 3410-02-P