03-20691. Onions Grown in Certain Designated Counties in Idaho, and Malheur County, Oregon; Increased Assessment Rate and Defined Fiscal Period

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This final rule increases the assessment rate established for the Idaho-Eastern Oregon Onion Committee (Committee) for the 2003-2004 and subsequent fiscal periods from $0.08 to $0.095 per hundredweight of onions handled, and establishes, in the regulatory text, the Committee's fiscal period beginning July 1 of each year and ending June 30 of the following year. The Committee locally administers the marketing order that regulates the handling of onions grown in designated counties in Idaho, and Malheur County, Oregon. Authorization to assess onion handlers enables the Committee to incur expenses that are reasonable and necessary to administer the program. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE:

August 15, 2003.

FOR FURTHER INFORMATION CONTACT:

Susan M. Hiller, Northwest Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW. Third Ave., suite 385, Portland, OR 97204; Phone: [phone]; Fax: [phone]; or George Kelhart, Technical Advisor, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: [phone], Fax: [phone].

Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: [phone], Fax: [phone], or E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This 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 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 (USDA) is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing 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, 2003, 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 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 rule increases the assessment rate established for the Committee for the 2003-2004 and subsequent fiscal periods from $0.08 to $0.095 per hundredweight of onions handled, and establishes, in the regulatory text, the Committee's fiscal period. The fiscal period begins July 1 of each year and ends June 30 of the following year.

The order provides authority for the Committee, with the approval of USDA, to establish a fiscal period. The Committee has operated under a fiscal period of July 1 through June 30 since its inception in the late 1950's, but this period has never been specified in the regulatory text. This rule adds to the order's rules and regulations a definition of the Committee's fiscal period. The fiscal period will be defined to be the 12-month period beginning July 1 and ending June 30 of the following year, both dates inclusive.

The order also 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 Committee consists of six producer members, four handler members and one public member. They are 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 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 2000-2001 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate that would continue 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 April 3, 2003, and in a vote of seven in favor, one against, and one abstention, recommended an assessment rate of $0.095 per hundredweight of onions handled. The assessment rate of $0.095 is $0.015 higher than the rate currently in effect. The order authorizes the Committee to establish an operating reserve of up to one fiscal period's operational expense. However, the Committee has maintained the operating reserve at a level of approximately one-half of one fiscal period's operational expenses. The Committee, over the last four fiscal periods, has reduced its operating reserve to this level. The Committee recommended the $0.015 increase so the total of assessment income ($870,200), contributions ($79,800), interest income ($6,000), and other income ($1,000) will equal the recommended expenses for 2003-2004 of $957,000. With these revenue sources, the Committee will not need to access its operating reserve and will maintain the reserve at the current level.

The Committee met on June 12, 2003, and unanimously recommended 2003-2004 expenditures of $957,000. In comparison, last year's budgeted expenditures were $1,044,824. The major expenditures for the 2003-2004 fiscal period include $10,000 for committee expenses, $148,353 for salary expenses, $72,610 for travel/office expenses, $59,170 for research expenses, $27,250 for export expenses, $589,617 for promotion expenses, and $50,000 for unforeseen marketing order contingencies. Budgeted expenses for these items in 2002-2003 were $10,000, $143,814, $77,460, $59,550, $54,000, $675,000, and $25,000, respectively.

The Committee estimates that onion shipments for the 2003-2004 fiscal period will be approximately 9,160,000 hundredweight, which should provide $870,200 in assessment income. Income derived from handler assessments, along with contributions ($79,800), interest income ($6,000), and other income ($1,000) will equal expenses. The Committee estimates that its operating reserve will be approximately $434,303 at the beginning of the 2003-2004 fiscal period. Funds in the reserve will be kept within the maximum permitted by the order of approximately one fiscal year's operational expenses (§ 958.44).

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 will be undertaken as necessary. The Committee's 2003-2004 budget and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by USDA.

Final Regulatory Flexibility Analysis

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, 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 37 handlers of Idaho-Eastern Oregon onions who are subject to regulation under the order and approximately 250 onion producers in the regulated production area. Small agricultural service firms are defined by the Small Business Administration (SBA)(13 CFR 121.201) as those having annual receipts less than $5,000,000, and small agricultural producers are defined as those having annual receipts less than $750,000.

The Committee estimates that 32 of the 37 handlers of Idaho-Eastern Oregon onions ship under $5,000,000 worth of onions on an annual basis. According to the “Vegetables 2002 Summary” reported by the National Agricultural Statistics Service, the total farm gate value of onions in the regulated production area for 2002 was $93,807,000. Therefore, the 2002 average gross revenue for an onion producer in the regulated production area was $375,228. Based on this information, it can be concluded that the majority of handlers and producers of Idaho-Eastern Oregon onions may be classified as small entities.

This rule establishes, in the regulatory text, the Committee's fiscal period beginning July 1 of each year and ending June 30 of the following year, and increases the assessment rate established for the Committee for the 2003-2004 and subsequent fiscal periods from $0.08 to $0.095 per hundredweight of onions handled. The Committee recommended an assessment rate of $0.095 per hundredweight, which is $0.015 higher than the rate currently in effect. The quantity of assessable onions for the 2003-2004 fiscal period is estimated at 9,160,000 hundredweight. Thus, the $0.095 rate should provide $870,200 in assessment income, which along with anticipated contributions, interest income, and other income will cover budgeted expenses expected to total about $957,000.

The major expenditures recommended by the Committee for the 2003-2004 fiscal period include $10,000 for committee expenses, $148,353 for salary expenses, $72,610 for travel/office expenses, $59,170 for research expenses, $27,250 for export expenses, $589,617 for promotion expenses, and $50,000 for unforeseen marketing order contingencies. Budgeted expenses for these items in 2002-2003 were $10,000, $143,814, $77,460, $59,550, $54,000, $675,000, and $25,000, respectively.

The Committee reviewed and unanimously recommended 2003-2004 expenditures of $957,000. This budget increases the budget line items for salary expenses and marketing order contingencies, and decreases the budget line items for travel and office expenses, research expenses, export expenses, and promotion expenses. Prior to arriving at this budget, the Committee considered information from various sources, including the Idaho-Eastern Oregon Onion Executive, Research, Export, and Promotion Committees. These subcommittees discussed alternative expenditure levels, based upon the relative value of various research and promotion projects to the Idaho-Eastern Oregon onion industry. The assessment rate of $0.095 per hundredweight of assessable onions was then determined by taking into consideration the estimated level of assessable shipments, other revenue sources, and the Committee's goal of not having to use reserve funds during 2003-2004.

A review of historical information and preliminary information pertaining to the upcoming shipping season indicates that the producer price for the 2003-2004 season could be about $5.00 per hundredweight. Therefore, the estimated assessment revenue for the 2003-2004 fiscal period as a percentage of total producer revenue could be about 1.9 percent.

This rule increases 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 are offset by the benefits derived by the operation of the marketing order. In addition, the Committee's meetings were widely publicized throughout the Idaho-Eastern Oregon onion industry and all interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the April 3, and the June 12, 2003, meetings were open to the public 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 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.

USDA 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 July 9, 2003 (68 FR 40815). A copy of the rule was provided to Committee staff, who in turn made it available to onion producers, handlers, and other interested persons. Finally, the rule was made available through the Internet by the Office of the Federal Register and USDA. A 15-day comment period ending July 24, 2003, was provided to allow interested persons to respond to the proposal. No comments were received.

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/​fv/​moab.html. Any questions about the compliance guide should be sent to Jay Guerber 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, 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 the 2003-2004 fiscal period began on July 1, 2003, and the order requires that the rate of assessment for each fiscal period apply to all assessable onions handled during such fiscal period. In addition, the Committee needs sufficient funds to pay its expenses which are incurred on a continuous basis. Further, handlers are aware of this action which was recommended by the Committee at a public meeting and is similar to other assessment rate actions issued in past years. Also, 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

• Onions
• Marketing agreements
• 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. A new § 958.112 is added to read as follows:

§ 958.112

Fiscal period.

The fiscal period shall begin July 1 of each year and end June 30 of the following year, both dates inclusive.

3. Section 958.240 is revised to read as follows:

§ 958.240

Assessment rate.

On and after July 1, 2003, an assessment rate of $0.095 per hundredweight is established for Idaho-Eastern Oregon onions.

Dated: August 8, 2003.

A.J. Yates,

Administrator, Agricultural Marketing Service.