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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Docket No. FV98-958-1 FR]

Onions Grown in Certain Designated Counties in Idaho, and Malheur

County, Oregon; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule decreases the assessment rate established for the

Idaho-Eastern Oregon Onion Committee (Committee) under Marketing Order

No. 958 for the 1998-99 and subsequent fiscal periods from $0.10 to

$0.09 per hundredweight of onions handled. The Committee is responsible

for local administration of the marketing order which regulates the

handling of onions grown in designated counties in Idaho, and Malheur

County, Oregon. Authorization to assess Idaho-Eastern Oregon onion

handlers enables the Committee to incur expenses that are reasonable

and necessary to administer the program. The fiscal period begins July

1 and ends June 30. The assessment rate will remain in effect

indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: June 16, 1998.

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

Field Office, Marketing Order Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, room 369,

Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 326-

7440; or George Kelhart, Marketing Order Administration Branch, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-

6632. Small businesses may request information on compliance with this

regulation by contacting Jay Guerber, Marketing Order Administration

Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box

96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)

205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 130 and Marketing Order No. 958 (7 CFR part 958), both as

amended, regulating the handling of onions grown in certain designated

counties in Idaho, and Malheur County, Oregon, hereinafter referred to

as the ``order.'' 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 Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This 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 as issued herein will be applicable to all assessable

onions beginning on July 1, 1998, and continue until amended,

suspended, or terminated. This rule will not preempt any State or local

laws, regulations, or policies, unless they present an irreconcilable

conflict with this rule.

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. Such 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.

This rule decreases the assessment rate established for the

Committee for the 1998-99 and subsequent fiscal periods from $0.10 to

$0.09 per hundredweight of onions handled.

The order provides authority for the Committee, with the approval

of the Department, to formulate an annual budget of expenses and

collect assessments from handlers to administer the program. The

Committee consists of six producer members, four handler members, and

one public member, each of whom is familiar with the Committee's needs

and with the costs for goods and services in their local area and are

thus in a position to formulate an appropriate budget and assessment

rate. The budget and assessment rate were discussed at a public meeting

and all directly affected persons had an opportunity to participate and

provide input.

For the 1996-97 and subsequent fiscal periods, the Committee

recommended, and the Department approved, an assessment rate of $0.10

per hundredweight that would continue in effect from fiscal period to

fiscal period unless modified, suspended, or terminated by the

Secretary upon recommendation and information submitted by the

Committee or other information available to the Secretary.

The Committee met on April 2, 1998, and unanimously recommended

1998-99 expenditures of $1,155,205 and an assessment rate of $0.09 per

hundredweight of onions handled during the 1998-99 and subsequent

fiscal periods. The Committee estimates that the 1998-99 onion crop

will approximate 9,200,000 hundredweight of onions. In comparison, the

1997-98 fiscal period budget was established at $1,146,916 on an

estimated assessable onion harvest of 8,800,000 hundredweight of

onions. The decrease is necessary to prevent expected assessment income

from exceeding the

[[Page 32599]]

amount necessary to administer the program for the 1998-99 fiscal

period.

The Committee anticipates that assessment income during the 1997-98

fiscal period will be approximately $100,000 higher than that estimated

for its 1997-98 budget. This is due to a greater level of onion

production than anticipated by the Committee during its 1997-98 budget

deliberations. The Committee also anticipates that it will not expend

$1,146,916 as budgeted for the 1997-98 fiscal period, but rather will

have expenditures totaling approximately $950,000. At the time the

1997-98 fiscal period budget was recommended, the Committee had

estimated that it would draw up to $216,916 from its operating reserve.

However, since 1997-98 assessment income is greater than anticipated

and the respective expenditures are less than budgeted, the operating

reserve may actually increase by the end of the fiscal period rather

than decrease. As a consequence, the Committee estimates that its

operating reserve will approximate $1,141,700 by June 30, 1998. Thus,

to help ensure that the operating reserve does not exceed the maximum

allowed by the order of approximately one fiscal period's expenditures,

the Committee recommended that the assessment rate be decreased. Lower

assessment rates were considered, but not recommended because they

would not generate the income necessary to administer the program with

an adequate operating reserve.

The major expenditures recommended by the Committee for the 1998-99

fiscal period include $215,205 for administration, $55,000 for

production research, $750,000 for market promotion including paid

advertising, $60,000 for export market development, and $75,000 for

marketing order contingencies. Budgeted expenses for these items in the

1997-98 fiscal period were $206,716, $55,200, $750,000, $60,000, and

$75,000, respectively.

The Committee based its recommended assessment rate decrease on the

1998-99 crop estimate, the 1998-99 fiscal period expenditures estimate,

as well as the current and projected balance of the operating reserve.

The decreased assessment rate should provide $828,000 in income, which,

when combined with interest income of $55,000 and operating reserve

funds of $272,205, will be adequate to cover budgeted expenses. As

noted above, the Committee estimates it will have approximately

$1,141,700 in its operating reserve at the end of the current fiscal

period, which should be adequate to cover any income shortages. This

amount is within the maximum permitted by the order of approximately

one fiscal period's expenditures (Sec. 958.44).

The assessment rate established in this rule will continue in

effect indefinitely unless modified, suspended, or terminated by the

Secretary 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 the

Department and are locally published. Committee meetings are open to

the public and interested persons may express their views at these

meetings. The Department will evaluate Committee recommendations and

other available information to determine whether modification of the

assessment rate is needed. Further rulemaking will be undertaken as

necessary.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this rule on small entities. Accordingly, the AMS

has prepared this final regulatory flexibility analysis.

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 the 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 35 handlers of Idaho-Eastern Oregon onions

who are subject to regulation under the order and approximately 260

onion 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

having annual receipts of less than $500,000. The majority of Idaho-

Eastern Oregon onion handlers and producers may be classified as small

entities.

This rule decreases the assessment rate established for the

Committee and collected from handlers for the 1998-99 and subsequent

fiscal periods from $0.10 to $0.09 per hundredweight of onions handled.

Both the $0.09 assessment rate and the 1998-99 budget of $1,155,205

were unanimously recommended by the Committee at its April 2, 1998,

meeting. The assessment rate established by this action is $0.01 lower

than the 1997-98 rate. The Committee recommended a decreased assessment

rate to help ensure that the operating reserve does not exceed the

maximum allowed by the order of approximately one fiscal period's

expenditures. The anticipated crop of 9,200,000 hundredweight is

approximately 400,000 hundredweight larger than the crop estimate used

to establish the 1997-98 budget. The $0.09 rate should provide $828,000

in assessment income, which, when combined with interest income of

$55,000 and $272,205 from the operating reserve, will be adequate to

meet the 1998-99 fiscal period's budgeted expenses.

The Committee reviewed and unanimously recommended 1998-99

expenditures of $1,155,205 which includes increases in administrative

expenses, salaries, and committee expenses. Prior to recommending this

budget, the Committee considered information from various sources,

including the Idaho-Eastern Oregon Onion Executive, Research,

Promotion, and Export Development Committees. Alternative expenditure

levels were discussed and rejected by these subcommittees, and

ultimately by the full Committee, based upon the relative value of

various research and promotion projects to the Idaho-Eastern Oregon

onion industry.

The major expenditures recommended by the Committee for the 1998-99

fiscal period include $215,205 for administration, $55,000 for

production research, $750,000 for market promotion including paid

advertising, $60,000 for export market development, and $75,000 for

marketing order contingencies. Budgeted expenses for these items in the

1997-98 fiscal period were $206,716, $55,200, $750,000, $60,000, and

$75,000, respectively.

A review of historical information and preliminary information

pertaining to the upcoming season indicates that the F.O.B. price for

the 1998-99 onion season could average $13.10 per hundredweight of

onions. Therefore, the estimated assessment revenue for the 1998-99

fiscal period ($828,000) as a percentage of the projected total F.O.B.

revenue ($120,520,000) would be 0.007 percent. This figure indicates

that the $0.09 assessment rate will have a

[[Page 32600]]

relatively insignificant impact on the Idaho-Eastern Oregon onion

industry.

This action decreases the assessment obligation imposed on

handlers. While assessments impose some additional costs on handlers,

the costs are minimal and uniform on all handlers. Some of the

additional costs may be passed on to producers. However, these costs

will be offset by the benefits derived by the operation of the order.

In addition, the Committee's meeting was widely publicized throughout

the Idaho-Eastern Oregon onion industry and all interested persons were

invited to attend the meeting and participate in Committee

deliberations on all issues. Like all Committee meetings, the April 2,

1998, meeting was a public meeting and all entities, both large and

small, were able to express views on this issue.

This rule imposes no additional reporting or recordkeeping

requirements on either small or large 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.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

A proposed rule concerning this action was published in the Federal

Register on May 15, 1998 (63 FR 26999). A copy of the proposed rule was

also sent via facsimile transmission to the administrative office of

the Committee, which in turn notified Committee members and industry

members. The proposal was also made available through the Internet by

the Government Printing Office.

A 15-day comment period ending June 1, 1998, was provided to allow

interested persons the opportunity to respond to the request for

information and comments. No comments were received in response to the

proposal.

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, as

hereinafter set forth, will tend to effectuate the declared policy of

the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good

cause exists for not postponing the effective date of this rule until

30 days after publication in the Federal Register because: (1) The

Committee needs to have sufficient funds to pay its expenses which are

incurred on a continuous basis; (2) the 1998-99 fiscal period begins on

July 1, 1998, and the order requires that the rate of assessment for

each fiscal period apply to all assessable onions handled during such

fiscal period; (3) handlers are aware of this action which was

recommended by the Committee at a public meeting; and (4) a 15-day

comment period was provided for in the proposed rule, and no comments

were received.

List of Subjects in 7 CFR Part 958

Marketing agreements, Onions, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 958 is

amended as follows:

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

MALHEUR COUNTY, OREGON

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

follows:

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

2. Section 958.240 is revised to read as follows:

Sec. 958.240 Assessment rate.

On and after July 1, 1998, an assessment rate of $0.09 per

hundredweight is established for Idaho-Eastern Oregon onions.

Dated: June 10, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-15835 Filed 6-12-98; 8:45 am]

BILLING CODE 3410-02-P