This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

36194

Vol. 63, No. 127

Thursday, July 2, 1998

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Docket No. FV97–958–2 PR]

Onions Grown in Certain Designated

Counties in Idaho, and Malheur

County, Oregon, and Imported Onions;

Proposed Increase in Grade

Requirement for White Onions

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

SUMMARY: This rule would increase the

minimum grade requirement for white

onion varieties handled under the

Idaho-Eastern Oregon onion marketing

order from U.S. No. 2 or U.S.

Commercial to U.S. No. 1. The

marketing order regulates the handling

of onions produced in certain

designated counties in Idaho, and

Malheur County, Oregon, and is

administered locally by the IdahoEastern Oregon Onion Committee

(Committee). This rule would improve

the marketing of white onions and

increase returns to producers, as well as

provide consumers with higher quality

onions. As provided under section 8e of

the Agricultural Marketing Agreement

Act of 1937, the proposed increase in

the minimum grade requirement would

also apply to all imported varieties of

white onions.

DATES: Comments must be received by

August 31, 1998.

ADDRESSES: Interested persons are

invited to submit written comments

concerning this proposal. Comments

must be sent to the Docket Clerk, Fruit

and Vegetable Programs, AMS, USDA,

room 2525–S, P.O. Box 96456,

Washington, DC 20090–6456; Fax: (202)

205–6632. All comments should

reference the docket number and the

date and page number of this issue of

the Federal Register and will be made

available for public inspection in the

Office of the Docket Clerk during regular

business hours.

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; and

George J. 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

proposal 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.’’

This proposed rule is also issued

under section 8e of the Act, which

provides that whenever certain

specified commodities, including

onions, are regulated under a Federal

marketing order, imports of these

commodities into the United States are

prohibited unless they meet the same or

comparable grade, size, quality, or

maturity requirements as those in effect

for the domestically produced

commodities.

The Department of Agriculture

(Department) is issuing this rule in

conformance with Executive Order

12866.

This proposal has been reviewed

under Executive Order 12988, Civil

Justice Reform. This rule is not intended

to have retroactive effect. This proposal

would 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. 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 date of the entry

of the ruling.

There are no administrative

procedures which must be exhausted

prior to any judicial challenge to the

provisions of import regulations issued

under section 8e of the Act. This

proposal invites comments on an

increase in the minimum grade

requirement for white onion varieties

grown in the defined production area

and handled under order authority. This

proposed rule, unanimously

recommended by the Committee at its

June 19, 1997, meeting, would require

that all white onion varieties handled be

U.S. No. 1 grade. The current

regulations allow the handling of white

onions of U.S. No. 2, U.S. Commercial,

and U.S. No. 1 grades. As provided

under section 8e of the Agricultural

Marketing Agreement Act of 1937, the

proposed increase in the minimum

grade requirements would also apply to

all imported varieties of white onions.

Sections 958.51 and 958.52 of the

order provide authority for the

establishment and modification of

regulations applicable to the handling of

particular grades of onions. Section

958.328(a)(1) establishes the grade

requirements for white onions handled

subject to the Idaho-Eastern Oregon

onion marketing order. Such grade

requirements are based on the U.S.

Standards for Grades of Onions (Other

than Bermuda-Granex-Grano and Creole

Types) (7 CFR part 51.2830 et seq.), or

the U.S. Standards for Grades of

Bermuda-Granex-Grano Type Onions (7

CFR part 51.3195 et seq.). Currently,

these handling regulations require that

white onion varieties shall be (1) U.S.
Federal Register / Vol. 63, No. 127 /Thursday, July 2, 1998 / Proposed Rules 36195

No. 2 or U.S. Commercial, 1 inch

minimum to 2 inches maximum

diameter; or (2) U.S. No. 2 or U.S.

Commercial, if not more than 30 percent

of the lot is comprised of onions of U.S.

No. 1 quality, and at least 11⁄2 inches

minimum diameter; or (3) U.S. No. 1, at

least 11⁄2 inches minimum diameter.

The regulations further specify that

none of these three categories may be

commingled in the same bag or other

container.

This proposed rule would require that

all bags or other containers of white

onion varieties shipped subject to order

requirements be either: (1) U.S. No. 1, 1

inch minimum to 2 inches maximum

diameter; or (2) U.S. No. 1, at least 11⁄2

inches minimum diameter.

Commingling of these two categories

would not be allowed. Current

exemptions under the order for special

purpose shipments in section

958.328(e), and shipments qualifying for

a minimum quantity exemption in

section 958.328(g), would continue to

apply when applicable.

The Committee justification for its

recommendation indicated that

shipments of U.S. No. 2 and U.S.

Commercial grade white onions have

had a negative impact on producer

returns and have been a factor in

decreasing this industry’s share of the

fresh domestic white onion market. In

addition, the Committee stated that

consumers of white onions traditionally

demand a quality product and that U.S.

No. 2 and U.S. Commercial grade white

onions have poor consumer acceptance.

The Committee stated that producers

seldom profit from U.S. No. 2 or U.S.

Commercial grade white onion sales,

and as a consequence, common business

practice for many is to discard such

onions as culls following harvest. Based

upon comments made by handlers and

receivers of white onions, the

Committee reported that shipments of

low quality U.S. No. 2 and U.S.

Commercial grade white onions have a

depressing influence on the price of the

higher quality U.S. No. 1 grade white

onions. The Free-on-Board (FOB) price

for U.S. No. 2 white onions usually runs

about one-half the FOB price on U.S.

No. 1 white onions reflecting the weak

demand for U.S. No. 2 white onions in

fresh markets. Moreover, over the last

several years there has been increased

competition from white onions grown in

Nevada, Washington, Colorado, and

Utah. The quality produced and

marketed from those States is excellent.

Thus, a higher grade for white onions

grown in Idaho-Eastern Oregon should

help this industry compete more

effectively and increase demand

through stronger confidence in the

quality of Idaho-Eastern Oregon white

onions.

Between the 1986/87 and the 1996/97

marketing seasons, an annual average of

336,000 hundredweight of white onions,

representing 3.9 percent of the total of

all onion varieties, has been shipped

from the Idaho-Eastern Oregon

production area. The annual average of

all Idaho-Eastern Oregon onion

shipments for this period, including

white, yellow, and red onion varieties,

is 9,517,500 hundredweight. During the

same period of time, shipments of

Idaho-Eastern Oregon U.S. No. 2 white

onions averaged 3,807 hundredweight

per year, or approximately an annual

average of 1.2 percent of white IdahoEastern Oregon onion shipments and an

annual average of .04 percent of all

Idaho-Eastern Oregon onion shipments.

The majority, or nearly 99 percent, of

the white onions shipped from this

production area are U.S. No. 1 grade.

Onions from the Idaho-Eastern Oregon

production area are shipped throughout

most of the year. Most Idaho-Eastern

Oregon white onions are marketed

during the months of September,

October, and November, with significant

additional volume through February.

Preliminary information pertaining to

the 1998/99 shipping season indicates

that the FOB price for onions this

season could average $13.10 per

hundredweight.

As mentioned earlier, section 8e of

the Act requires that when certain

domestically produced commodities,

including onions, are regulated under a

Federal marketing order, imports of that

commodity must meet the same or

comparable grade, size, quality, or

maturity requirements. Section 8e also

provides that whenever two or more

marketing orders regulating the same

commodity produced in different areas

of the United States are concurrently in

effect, a determination must be made as

to which of the areas produces the

commodity in most direct competition

with the imported commodity. Imports

must then meet the requirements

established for that particular area.

Grade, size, quality, and maturity

regulations have been issued regularly

under both Marketing Order No. 958

and Marketing Order No. 959, which

regulates the handling of onions grown

in South Texas, since the marketing

orders were established. The current

import regulation specifies that import

requirements for onions are to be based

on the seasonal categories of onions

grown in both marketing order areas.

The import regulation specifies that

imported onions must meet the

requirements of the Idaho-Eastern

Oregon onion marketing order during

the period June 5 through March 9 and

the South Texas onion marketing order

during the period March 10 through

June 4 each season. This proposal

would change the import requirements

for the period June 5 through March 9

of each marketing year to provide that

all imported white onion varieties must

be U.S. No. 1 grade. While no changes

are required in the language of section

980.117, all white onion varieties

imported during this period would be

required to meet the modified grade

requirement.

White onions are imported into the

United States throughout the year from

a number of different countries. By far

the largest source of all imported onions

is Mexico. Mexican white onions enter

the United States from November

through July, with the heaviest volumes

moving during the months of December

through April. The annual average

volume of all Mexican onions imported

into the United States between 1986 and

1996 was 3,333,150 hundredweight,

while the annual average volume for all

imported onions from all sources during

the same period was 4,040,004

hundredweight.

Other sources of imported onions are

Canada, Chile, New Zealand, France,

Guatemala, Belgium, Morocco, and the

Netherlands. In 1996 and 1997, imports

from Canada totaled 654,728

hundredweight and 498,950

hundredweight, imports from Chile

totaled 139,927 hundredweight and

85,914 hundredweight, and those from

New Zealand totaled 13,007

hundredweight and 20,172

hundredweight. During those two years,

onion imports from France totaled

82,034 hundredweight and 102,956

hundredweight, imports from

Guatemala were 32,540 hundredweight

and 32,474 hundredweight, imports

from Belgium totaled 1,565

hundredweight and 2,386

hundredweight, Moroccan imports

totaled 287 hundredweight and 948

hundredweight, and imports from the

Netherlands during 1996 and 1997

totaled 26,852 and 26,544

hundredweight, respectively.

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

Agricultural Marketing Service (AMS)

has considered the economic impact

this action would have on small entities.

Accordingly, the AMS has prepared this

initial 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 rules issued thereunder, are
36196 Federal Register / Vol. 63, No. 127 /Thursday, July 2, 1998 / Proposed Rules

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.

Import regulations issued under the

Act are based on those established

under Federal marketing orders which

regulate the handling of domestically

produced products.

There are approximately 35 handlers

of Idaho-Eastern Oregon onions who are

subject to regulation under the order

and approximately 260 onion

producers, including approximately 80

producers of white onions, in the

regulated area. In addition,

approximately 150 importers of onions

are subject to import regulations and

could be affected by this proposed rule.

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.

Approximately 90 percent of the

handlers and 70 percent of the

producers of Idaho-Eastern Oregon

white onions may be classified as small

entities. Although it is not known how

many importers of white onions may be

classified as small entities, it can be

assumed that a number of the 150

importers could be classified as such.

This proposal invites comments on an

increase in the minimum grade

requirement for white onion varieties

grown in the defined production area

and handled under order authority. This

proposed rule, unanimously

recommended by the Committee at its

June 19, 1997, meeting, would require

that all white onion varieties handled be

U.S. No. 1 grade. The current

regulations allow the handling of U.S.

No. 2 grade and U.S. Commercial grade

white onions as well. As provided

under section 8e of the Agricultural

Marketing Agreement Act of 1937, the

proposed increase in the minimum

grade requirement would also apply to

all imported varieties of white onions.

At the meeting the Committee

discussed the impact of this proposal on

handlers and producers in terms of cost.

The Committee stated that producers

seldom profit from U.S. No. 2 or U.S.

Commercial grade white onion sales,

and as a consequence, common business

practice for many is to discard such

onions as culls following harvest.

Based upon comments made by

handlers and receivers of white onions,

the Committee reported that shipments

of low quality U.S. No. 2 and U.S.

Commercial grade white onions have a

depressing influence on the price of the

higher quality U.S. No. 1 grade white

onions. The Free-on-Board (FOB) price

for U.S. No. 2 white onions usually runs

about one-half the FOB price on U.S.

No. 1 white onions reflecting the weak

demand for U.S. No. 2 white onions in

fresh markets. Moreover, over the last

several years there has been increased

competition from white onions grown in

Nevada, Washington, Colorado, and

Utah. The quality produced and

marketed from those States is excellent.

Thus, a higher grade for white onions

grown in Idaho-Eastern Oregon should

help this industry compete more

effectively and increase demand

through stronger confidence in the

quality of Idaho-Eastern Oregon white

onions. Preliminary information

pertaining to the 1998–99 shipping

season indicates that the FOB price for

onions this season could average $13.10

per hundredweight.

While this proposed rule may impose

some additional costs on handlers and

producers, the costs are expected to be

minimal, and would be offset by the

benefits of the proposal. This proposal

is expected to similarly impact

importers of white onions. The

Committee believes that this proposed

modification would benefit consumers,

producers, and handlers. The benefits of

this rule are not expected to be

disproportionately greater or lesser for

small entities than for large entities.

As alternatives to the proposal, the

Committee discussed leaving the

regulations as currently issued and

using voluntary methods to solve the

problem. Both alternatives were

rejected. The prevailing opinion was

that market confidence and producer

income would continue to erode

without the implementation of this

proposal. The majority of Committee

members stated that voluntary measures

had not been effective in the past.

Section 8e of the Act requires that

when certain domestically produced

commodities, including onions, are

regulated under a Federal marketing

order, imports of that commodity must

meet the same or comparable grade,

size, quality, or maturity requirements.

Section 8e also provides that whenever

two or more marketing orders regulating

the same commodity produced in

different areas of the United States are

concurrently in effect, the Secretary

shall determine which of the areas

produces the commodity in more direct

competition with the imported

commodity. Imports must then meet the

requirements established for the

particular area.

Grade, size, quality, and maturity

regulations have been issued regularly

under both Marketing Order No. 958

and Marketing Order No. 959, which

regulates the handling of onions grown

in South Texas, since the orders were

established. The current import

regulation specifies that import

requirements for onions are to be based

on the seasonal categories of onions

grown in both marketing order areas.

The import regulations specify that

imported onions must meet the

requirements of the Idaho-Eastern

Oregon onion order during the period

June 5 through March 9 each season and

the South Texas onion order during the

period March 10 through June 4 each

season. This proposal would change the

import requirements for the period June

5 through March 9 of each marketing

year to provide that all imported white

onion varieties must be U.S. No. 1

grade.

This action would not impose any

additional reporting or recordkeeping

requirements on either small or large

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 proposed rule.

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 June

19, 1997, 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 information on the regulatory

and informational impacts of this action

on small businesses.

An advance notice of proposed

rulemaking with request for public

comment was published in the Federal

Register (63 FR 5472) on February 3,

1998. A 60-day comment period was

provided to allow interested persons the

opportunity to comment on the volume

and grade of imported white onions, as

well as other aspects of the potential

grade increase, including its probable

regulatory and economic impact on

small business entities. Copies of the

notice were faxed and mailed to the

Committee office, which in turn notified

Committee and Idaho-Eastern Oregon

onion industry members of the

recommendation. The Department also

provided copies of the notice to the

administrative offices of the Walla

Walla Sweet Onion Committee, the

South Texas Onion Committee, and the

Vidalia Onion Committee, as well as to
Federal Register / Vol. 63, No. 127 /Thursday, July 2, 1998 / Proposed Rules 36197

the World Trade Organization. In

addition, the Committee’s meetings

were widely publicized throughout the

Idaho-Eastern Oregon onion industry

and all interested persons were invited

to attend and participate on all issues.

A copy of the notice was also made

available on the Internet by the U.S.

Government Printing Office.

Five comments were received. Four of

the comments are supportive of the

Committee’s recommendation. The

Idaho-Eastern Oregon Onion Committee

reaffirmed its unanimous

recommendation in favor of increasing

the minimum grade for white onions

from U.S. No. 2 or U.S. Commercial to

U.S. No. 1. The South Texas Onion

Committee, administering Marketing

Order No. 959, expressed its support of

the recommended modification as well.

The South Texas Onion Committee

commented that by the time the South

Texas industry enters the market in

March of each year, the market is

flooded with inferior quality white

onions from both Mexico and IdahoEastern Oregon, and that the onion

industries and consumers would benefit

from the minimum grade increase. The

minimum grade requirement for white

onion varieties handled under the South

Texas marketing order is a modified

U.S. No. 1 grade. The proposed rule

would increase the minimum grade

requirement for Idaho-Eastern Oregon

onions, with the two minimum grade

requirements becoming more similar.

Also commenting in favor of the

Committee’s recommendation were a

South Texas onion handler and an

association representing Texas onion

handlers as well as importers of

Mexican onions. Both commentators are

located in Mission, Texas. The handler

commented that the recommended

modification would allow the South

Texas industry the necessary confidence

to continue to produce onions for a

market free from the negative consumer

reaction associated with poor quality

white onions. The association also

added its support of the recommended

minimum grade increase. The

association stated that it has within its

membership approximately 21 South

Texas handlers of onions, most of whom

also import onions from Mexico. The

commenter added that the association

has numerous members who only

handle imported produce, including

white onions. The commenter noted

further that in the modern competitive

produce market, consumers must be

provided with the best quality products

available.

A comment was also received from

the European Commission, Brussels,

Belgium, on behalf of the European

Community. That comment stated that

the proposal aims at increasing the

minimum diameter size requirement for

imported onions from 2.54 to 2.79

centimeters for the period June 5

through March 9 of each year, and

objected to such action. However, the

Committee had recommended

increasing the minimum grade for

Idaho-Eastern Oregon white onions and

white onions imported during the

period June 5 through March 9 from

U.S. No. 2 to U.S. No. 1. However, the

recommendation did not include a

modification to the minimum diameter

size itself, which continues to be 1 inch

or 2.54 centimeters.

In conjunction with the issuance of

the advance notice and request for

comment, the Texas Cooperative

Inspection Program monitored white

onions imported from Mexico during

the period December 1, 1997, through

March 9, 1998. This process was

conducted at the request of the AMS to

determine the quantity of imported

white onions potentially impacted by

the Committee’s recommendation. An

analysis of the information provided by

the Inspection Program indicates that

approximately 98 percent of the white

onions imported from Mexico during

the test period met U.S. No. 1 grade. The

balance of the imported white onions

during this period either met U.S.

Commercial grade or failed to meet the

minimum of U.S. No. 2 grade. There

were no U.S. No. 2 grade white onions

imported from Mexico during this

period. During the test period, a total of

1,006,279 50-pound containers were

offered for importation. A total of

948,069 50-pound containers graded

U.S. No. 1, 11,427 50-pound containers

graded U.S. Commercial, and 10,783 50-

pound containers failed to meet the

current minimum grade requirement of

U.S. No. 2.

The Department has not identified

any relevant Federal rules that

duplicate, overlap, or conflict with this

rule.

A 60-day comment period is provided

to allow interested persons the

opportunity to respond to this proposal.

All written comments timely received

will be considered before a final

determination is made on this matter.

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 proposed to

be 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 958.328 is amended by

revising paragraph (a)(1) to read as

follows:

§ 958.328 Handling Regulations.

* * * * *

(a)(1) Grade and size requirements. (i)

White varieties shall be either:

(A) U.S. No. 1, 1 inch minimum to 2

inches maximum diameter; or

(B) U.S. No. 1, at least 11⁄2 inches

minimum diameter.

(ii) Neither of these two categories of

onions may be commingled in the same

bag or other container.

* * * * *

Dated: June 26, 1998.

Eric M. Forman,

Acting Deputy Administrator, Fruit and

Vegetable Programs.

[FR Doc. 98–17564 Filed 7–1–98; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 100

[CGD07–98–039]

RIN 2115–AE46

Special Local Regulations; City of

Charleston, SC

AGENCY: Coast Guard, DOT.

ACTION: Notice of proposed rulemaking.

SUMMARY: Temporary special local

regulations are being proposed for the

Charleston Maritime Center’s South

Carolina Tug Boat Challenge. The event

will last approximately 30 minutes and

will take place, depending on shipping

traffic, between 11 a.m. and 5 p.m.

Eastern Daylight Time (EDT) on August

8, 1998, in Charleston Harbor on Cooper

River Charleston, SC. The exact time of

the race will be announced via separate

Broadcast Notice to Mariners. These

regulations are necessary for the safety

of life on the navigable waters during

the event.

DATES: Comments must be received on

or before August 3, 1998.

ADDRESSES: Comments may be mailed to

U.S. Coast Guard Group Charleston, 196

Tradd Street, Charleston, SC 29401–

1817, or may be delivered to the