[Federal Register Volume 82, Number 37 (Monday, February 27, 2017)]
[Rules and Regulations]
[Pages 11789-11791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-03714]



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Rules and Regulations
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Federal Register / Vol. 82, No. 37 / Monday, February 27, 2017 / 
Rules and Regulations

[[Page 11789]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Doc. No. AMS-SC-16-0116; SC17-956-1 IR]


Sweet Onions Grown in the Walla Walla Valley of Southeast 
Washington and Northeast Oregon; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule implements a recommendation from the Walla Walla 
Sweet Onion Marketing Committee (Committee) for a decrease in the 
assessment rate established for the 2017 and subsequent fiscal periods 
from $0.22 to $0.10 per 50-pound bag or equivalent of sweet onions 
handled. The Committee locally administers the marketing order and is 
comprised of producers and handlers of sweet onions operating within 
the area of production along with one public member. Assessments upon 
sweet onion handlers are used by the Committee to fund reasonable and 
necessary expenses of the program. The fiscal period begins January 1 
and ends December 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Effective February 28, 2017. Comments received by April 28, 
2017, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this 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: Teresa Hutchinson or Gary Olson, 
Northwest Marketing Field Office, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1220 SW Third Ave., Suite 
305, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503) 326-
7440, 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 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, 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 Orders 12866, 13563, and 13175.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing 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 as issued herein will be applicable to all assessable 
sweet onions beginning January 1, 2017, 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 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 2017 and subsequent fiscal periods from $0.22 to 
$0.10 per 50-pound bag or equivalent of sweet onions handled.
    The Walla Walla sweet onion marketing 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 of the Committee are producers and handlers of 
Walla Walla sweet onions, 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 2008 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 December 6, 2016, and unanimously recommended 
2017 expenditures of $93,250 and an

[[Page 11790]]

assessment rate of $0.10 per 50-pound bag or equivalent of sweet 
onions. In comparison, last year's budgeted expenditures were $95,250. 
The assessment rate of $0.10 is $0.12 lower than the rate currently in 
effect. This action will allow the Committee to reduce its financial 
reserve while still providing adequate funding to meet program 
expenses.
    The major expenditures recommended by the Committee for the 2017 
fiscal period include $63,250 for administrative expenses, $24,700 for 
research and promotion, $4,000 for travel, and $1,300 for 
miscellaneous/contingency. Budgeted expenses for these items in 2016 
were $57,300, $36,200, $1,500, and $250 respectively.
    The assessment rate recommended by the Committee was derived by 
multiplying anticipated shipments of Walla Walla sweet onions by 
various assessment rates. Applying the $0.10 per 50-pound bag or 
equivalent assessment rate to the Committee's 325,000 50-pound bag or 
equivalent crop estimate should provide $32,500 in assessment income. 
Thus, income derived from handler assessments and other income ($750), 
plus $60,000 from the Committee's monetary reserve would be adequate to 
cover the recommended $93,250 budget for 2017. Funds held in the 
reserve were $237,354 as of November 30, 2016. The Committee estimates 
a reserve of $177,354 at the end of 2017 fiscal period (December 31, 
2017), which would be within the maximum permitted by the order of 
approximately two fiscal period's operational expenses (Sec.  956.44).
    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 is effective 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 2017 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 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 9 handlers of Walla Walla sweet onions subject to 
regulation under the order and approximately 30 producers in the 
regulated production area. Small agricultural service firms are defined 
by the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $7,500,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000.
    During the 2016 marketing year, the Committee reported that 
approximately 304,500 50-pound bags or equivalents of Walla Walla sweet 
onions were shipped into the fresh market. Based on information 
reported by USDA's Market News Service, the average 2016 marketing year 
f.o.b. shipping point price for the Walla Walla sweet onions was $19.55 
per 50-pound equivalent. Multiplying the $19.55 average price by the 
shipment quantity of 304,500 50-pound equivalents yields an annual crop 
revenue estimate of $5,952,975. The average annual revenue for each of 
the 9 handlers is therefore calculated to be $661,442 ($5,952,975 
divided by 9), which is considerably less than the Small Business 
Administration threshold of $7,500,000. Consequently, all of the Walla 
Walla sweet onion handlers could be classified as small entities.
    In addition, based on information provided by the National 
Agricultural Statistics Service (NASS), the average producer price for 
Walla Walla sweet onions for the 2011 through 2015 marketing years is 
$16.24 per 50-pound equivalent. NASS has not released data regarding 
the 2016 marketing year at this time. Multiplying the 2011-2015 
marketing year average price of $16.24 by the estimated 2017 marketing 
year shipments of 325,000 50-pound equivalents yields an annual crop 
revenue estimate of $5,278,000. The estimated average annual revenue 
for each of the 30 producers is therefore calculated to be 
approximately $175,933 ($5,278,000 divided by 30), which is less than 
the Small Business Administration threshold of $750,000. In view of the 
foregoing, the majority of Walla Walla sweet onion producers, and all 
of the Walla Walla sweet onion handlers, may be classified as small 
entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2017 and subsequent 
fiscal periods from $0.22 to $0.10 per 50-pound bag or equivalent of 
sweet onions. The Committee also unanimously recommended 2017 
expenditures of $93,250. The assessment rate of $0.10 is $0.12 lower 
than the previously established assessment rate. This action will allow 
the Committee to reduce its financial reserve while still providing 
adequate funding to meet program expenses.
    The quantity of assessable sweet onions for the 2017 fiscal period 
is estimated at 325,000 50-pound bags or equivalents. Thus, the $0.10 
rate should provide $32,500 in assessment income. Income derived from 
handler assessments, along with interest, other income, and funds from 
the Committee's authorized reserve, will be adequate to cover budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2017 
fiscal period include $63,250 for administrative expenses, $24,700 for 
research and promotion, $4,000 for travel, and $1,300 for 
miscellaneous/contingency. Budgeted expenses for these items in 2016 
were $57,300, $36,200, $1,500, and $250 respectively.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels, but determined that the recommended 
expenses were reasonable and necessary to adequately cover program 
operations. Lower assessment rates were also considered, but not 
recommended, because they would have reduced the financial reserve more 
than desired.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2017 fiscal period could range between $12.00 and $27.00 
per 50-pound bag or equivalent of sweet onions. Therefore, the 
estimated assessment revenue for the 2017 fiscal period as a percentage 
of total producer revenue is expected to range between 0.37 and 0.83 
percent.
    This action decreases the assessment obligation imposed on 
handlers.

[[Page 11791]]

Assessments are applied uniformly on all handlers, and some of the 
costs may be passed on to producers. However, decreasing the assessment 
rate reduces the burden on handlers, and may reduce the burden on 
producers. In addition, the Committee's meeting was widely publicized 
throughout the Walla Walla sweet 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 December 
6, 2016, 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 interim rule, including 
the regulatory and informational 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 Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes 
in those requirements as a result of this action are necessary. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    This action imposes no 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 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.
    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 upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and 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 2017 fiscal period begins on January 1, 2017, 
and the marketing order requires that the rate of assessment for each 
fiscal period apply to all assessable sweet onions handled during such 
fiscal period; (2) this action decreases the assessment rate for 
assessable sweet onions beginning with the 2017 fiscal period; (3) 
handlers are aware of this action, which was unanimously recommended by 
the Committee at a public meeting and is similar to other assessment 
rate actions issued in past years; and (4) this interim rule provides a 
60-day comment period, and all comments timely received will be 
considered prior to finalization of this rule.

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

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, 2017, an assessment rate of $0.10 per 50-
pound bag or equivalent is established for Walla Walla sweet onions.

    Dated: February 21, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-03714 Filed 2-24-17; 8:45 am]
BILLING CODE 3410-02-P