(May 30) WENATCHEE, Wash. — Albeit with a skeleton staff and a fraction of its former budget, the Washington Apple Commission will continue to operate under terms of a settlement in the lawsuit to determine the legality of its marketing programs.

Under the settlement, reached May 20 and unanimously approved at a public commission meeting May 22, the apple commission will continue its nonspeech functions based on a per-box assessment of 3½ cents. The assessment had been 25 cents per box for the past several years and as high as 40 cents.

In 2000, when shippers packed a record 98 million cartons, the 40-cent assessment netted the commission about $39 million. In 2002, with a harvest of about 87 million cartons assessed at 25 cents each, the commission took in about $22 million. With a similar harvest this year and the 3½-cent box tax, the commission would operate on little more than $3 million.

The settlement means that the apple commission will continue to fund organizations such as the Northwest Horticultural Council and the U.S. Apple Association. The settlement also will allow the commission to continue to administer the foreign trade program sponsored by the U.S. government and to retain its existing assets, including its logo.

Payments of the 3½-cent assessment will start Sept. 1 for all varieties except golden delicious, red delicious and fujis, which will start Oct. 1.

Increasing assessments will require a vote of two-thirds of participating growers, rather than a simple majority as before.

Under the settlement, the commission also agreed to request state legislation redistricting and allocating commission seats to regions based on planted acreage in each region. Commission meetings will rotate between Wenatchee and Yakima.

The commission agreed to pay the intervening defendants’ legal costs, which are estimated at $90,000 to $95,000. However, under the settlement, the commission will not refund assessments grower-shippers have paid since the lawsuit was filed, said Welcome Sauer, commission president.

The commission will continue to cut jobs, which started when a U.S. district judge ruled against it March 31, Sauer said. On April 10, the commission laid off 33 employees, leaving about 15 people to wrap up commission affairs. Sauer said that by the end of the first week of June, five more positions would be eliminated and that by the end of July, the commission would operate with six people, whom Sauer didn’t name.

“The organization is in transition mode, beginning to focus on the future and staffing itself accordingly,” Sauer said.

The commission met the last week of May to discuss budgets, cash flow projections, inventory liquidation and other matters.

“It appears that the commission will remain solvent until it begins collecting 3½-cent assessments at the beginning of the next apple crop in September-October,” Sauer said.

Yakima attorney Brendan Monahan, who represents three growers who were in opposition to the commission, could not be reached for comment.

Many growers said they were happy the commission remained in some form. They also said they were glad the legal questions finally had been resolved.

The commission’s ability to fund the horticulture council and U.S. Apple, as well as to maintain the foreign agricultural program, will continue to be important, many said.

“The Washington Apple Commission has certainly been diminished in scope, but it will serve the industry as we go forward,” said Ed Kershaw, president of Domex Marketing Co. Inc., Yakima. “Certainly the functions have changed. But I envision the apple commission will move forward. Those activities the current industry leaders think are appropriate will be carried on.”

It was critical to get the legal issues settled, Kershaw said.

“I don’t think you’ll find objection to change in the apple commission,” he said. “Some are opposed to such radical change, but that’s OK. We can build on it.”

The settlement comes a month and a half after a U.S. district judge ruled that the apple commission was violating growers’ First Amendment rights by charging mandatory, per-box fees to fund generic promotions of Washington apples.

Before a settlement was reached, the apple commission announced that it was shutting down.

The commission filed suit in late summer 2001 to verify its legal status in light of the July 2001 U.S. Supreme Court decision that found that mandatory advertising assessments collected by the Mushroom Council violated growers’ free speech rights.