[Federal Register Volume 63, Number 116 (Wednesday, June 17, 1998)]
[Rules and Regulations]
[Pages 32966-32969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16091]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 953

[Docket No. FV98-953-1 IFR]


Irish Potatoes Grown in Southeastern States; Increased Assessment 
Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule increases the assessment rate established for the 
Southeastern Potato Committee (Committee) under Marketing Order No. 953 
for the 1998-99 and subsequent fiscal periods from $0.0075 to $0.01 per 
hundredweight of potatoes handled. The Committee is responsible for 
local administration of the marketing order

[[Page 32967]]

which regulates the handling of Irish potatoes grown in two 
southeastern States (Virginia and North Carolina). Authorization to 
assess potato handlers enables the Committee to incur expenses that are 
reasonable and necessary to administer the program. The fiscal period 
begins June 1 and ends May 31. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Effective June 18, 1998. Comments received by July 17, 1998 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 Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; Fax 
202-205-6632. Comments should reference the docket 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.

FOR FURTHER INFORMATION CONTACT: Jim Wendland, DC Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 96456, room 2525-S, 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, also at the above address, telephone, and Fax.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 104 and Order No. 953, both as amended (7 CFR part 953), 
regulating the handling of Irish potatoes grown in two southeastern 
States (Virginia and North Carolina), 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 marketing order now in effect, Virginia-North 
Carolina potato 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 potatoes beginning June 1, 1998, and continuing 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 increases the assessment rate established for the 
Committee for the 1998-99 and subsequent fiscal periods from $0.0075 to 
$0.01 per hundredweight of potatoes 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 seven producer members and five handler members, 
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 formulated and discussed in a public meeting. 
Thus, 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 $0.0075 
per hundredweight of potatoes handled 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 16, 1998, and unanimously recommended 
1998-99 expenditures of $12,000, the same as last year. The major 
expenditures include $7,700 for the manager's and secretarial salaries 
and $1,000 for travel expenses. These and all other expense items are 
budgeted at last year's amounts.
    Regarding the assessment rate, after considering several options, 
the Committee concluded that the current $0.0075 per hundredweight 
would not be adequate for the 1998-99 fiscal period for the following 
reasons. The Committee's operating reserve is only $5,000 and is 
expected to be quickly exhausted. This reserve is the lowest ever for 
any of the Committee's fiscal periods except one. Also, wet fields 
caused delayed plantings and unfavorable growing conditions, resulting 
in potato plant stands estimated to be 20 percent below normal. As a 
result of this and other factors, the Committee projects that during 
the industry's brief, predominately June and July, shipping and 
assessing period, its total potato volume to be handled will be down at 
least 100,000 hundredweight. Therefore, the Committee unanimously 
recommended an assessment rate of $0.01 per hundredweight, $0.0025 
higher than the rate currently in effect.
    The assessment rate recommended by the Committee was based on 
projected shipments of 1,200,000 hundredweight of Southeastern 
potatoes, which should provide $12,000 in assessment income. Income 
derived from handler assessments, along with funds from the Committee's 
authorized operating reserve, will be adequate to cover budgeted 
expenses. Funds in the reserve at the beginning of the 1997-98 fiscal 
period are estimated at only $5,000. Funds in the reserve will be kept 
within the maximum permitted by the order of approximately one fiscal 
period's expenses of $12,000 (Sec. 953.35).
    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 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 the 
Department. 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

[[Page 32968]]

rate is needed. Further rulemaking will be undertaken as necessary. The 
Committee's 1998-99 budget and those for subsequent fiscal periods will 
be reviewed and, as appropriate, approved by the Department.
    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 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 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 85 producers of Southeastern potatoes in 
the production area and approximately 40 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $500,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000. The majority of Southeastern potato producers and handlers 
may be classified as small entities.
    This rule increases the assessment rate established for the 
Southeastern Potato Committee and collected from handlers for the 1998-
99 and subsequent fiscal periods from $0.0075 per hundredweight to 
$0.01 per hundredweight of potatoes handled. Both the $0.01 assessment 
rate and the 1998-99 budget of $12,000 were unanimously recommended by 
the Committee at its April 16, 1998, meeting. The assessment rate 
established by this action is $0.0025 higher than the 1997-98 rate. The 
Committee recommended an increased assessment rate to help offset the 
smaller projected crop of assessable Southeastern potatoes in 1998. The 
anticipated crop of 1,200,000 hundredweight is approximately 100,000 
hundredweight less than the 1997 crop. The $0.01 rate should provide 
$12,000 in assessment income which will be adequate to meet the 1998-99 
fiscal period's budgeted expenses.
    The Committee discussed leaving the assessment at the current 
$0.0075 rate but determined that since the crop is estimated to be only 
1,200,000 hundredweight, which is 20 percent below normal, that this 
would not generate enough income to meet budgeted expenses without 
exhausting the $5,000 operating reserve.
    The major expenditures recommended by the Committee for the 1998-99 
fiscal period include $7,700 for the manager's and secretarial salaries 
and $1,000 for travel expenses. These and all other expense items are 
budgeted at last year's amounts.
    A review of historical information and preliminary information 
pertaining to the upcoming season indicates that the grower price for 
the 1998-99 potato season could average $8.60 per hundredweight of 
potatoes. Shipments for 1998 are expected to be 1,200,000 
hundredweight. Therefore, the estimated assessment revenue for the 
1998-99 fiscal period ($12,000) as a percentage of the projected total 
crop value ($10,320,000) could be .1163 percent.
    While assessments impose some additional costs on handlers, the 
assessment is 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 Southeastern potato 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 16, 
1998, 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.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large Southeastern potato 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 30-day comment period is provided to allow interested persons to 
submit written comments. Thirty days is deemed appropriate because a 
final decision on the assessment rate increase needs to be made as 
close as possible to the end of the 1998 shipping season.
    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 Committee needs to have sufficient funds to 
pay its expenses which are incurred on a continuous basis. Its 
operating reserve funds are very low and are expected to be exhausted 
before sufficient assessments can be collected during the very brief, 
predominately June and July, shipping and assessing period to pay 
critical expenses; (2) the 1998-99 fiscal period began on June 1, 1998, 
and the order requires that the rate of assessment for each fiscal 
period apply to all assessable Irish potatoes handled during such 
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 final rule provides a 30-day comment period, and all 
comments timely received will be considered prior to finalization of 
this rule.

List of Subjects in 7 CFR Part 953

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 953 is 
amended as follows:

PART 953--IRISH POTATOES GROWN IN SOUTHEASTERN STATES

    1. The authority citation for 7 CFR part 953 continues to read as 
follows:

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

    2. Section 953.253 is revised to read as follows:


Sec. 953.253  Assessment rate.

    On and after June 1, 1998, an assessment rate of $0.01 per 
hundredweight is established for Southeastern States potatoes.


[[Page 32969]]


    Dated: June 12, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-16091 Filed 6-16-98; 8:45 am]
BILLING CODE 3410-02-P