[Federal Register Volume 64, Number 134 (Wednesday, July 14, 1999)]
[Proposed Rules]
[Pages 37890-37892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17892]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV99-948-1 PR]


Irish Potatoes Grown in Colorado; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule would increase the assessment rate from $0.01 to 
$0.02 per hundredweight of potatoes established for the Colorado Potato 
Administrative Committee, Area III (Committee) under Marketing Order 
No. 948 for the 1999-2000 and subsequent fiscal periods handled. The 
Committee is responsible for local administration of the marketing 
order which regulates the handling of potatoes grown in Colorado. 
Authorization to assess Colorado potato handlers enables the Committee 
to incur expenses that are reasonable and necessary to administer the 
program. The 1999-2000 fiscal period began July 1 and ends June 30. The 
assessment rate would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by August 13, 1999.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. 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) 720-5698; or E-mail: 
[email protected]. 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: 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; or George Kelhart, Technical Advisor, 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) 720-5698. Small businesses may request information 
on complying with this regulation, or obtain a guide on complying with 
fruit, vegetable, and specialty crop marketing agreements and orders by 
contacting Jay Guerber, 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) 720-
5698, or E-mail: Jay.G[email protected]. You may view the marketing 
agreement and order small business compliance guide at the following 
web site: http://www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 97 and Marketing Order No. 948 [7 CFR Part 948], both as 
amended, regulating the handling of Irish potatoes grown in Colorado, 
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 order now in effect, Colorado potato handlers 
are subject to assessments. Funds to administer the order are derived 
from such

[[Page 37891]]

assessments. It is intended that the assessment rate proposed herein 
will be applicable to all assessable potatoes beginning on July 1, 
1999, 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 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 would increase the assessment rate established for the 
Committee for the 1999-2000 and subsequent fiscal periods from $0.01 
per hundredweight to $0.02 per hundredweight of potatoes handled.
    The Colorado potato 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 five producer members and four 
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 current assessment rate of $.01 per hundredweight was 
recommended by the Committee and approved by the Department for the 
1996-97 and subsequent fiscal periods. That rate continues in effect 
until modified, suspended, or terminated by the Secretary, upon 
recommendation and information submitted by the Committee, or other 
information available to the Secretary.
    A meeting of the Committee was scheduled for May 13, 1999, to 
review the current assessment rate and budget needs of the program for 
the 1999-2000 fiscal period. However, a quorum was not present. Based 
upon discussion among those Committee members who showed up for the 
meeting, the manager of the Committee prepared information and voting 
material that was sent by facsimile copy (fax) to Committee members and 
alternates. Voting by telegraph, telephone, or other means of 
communication is provided for in paragraph (c) of Sec. 948.61 
Procedure, of the marketing order. Seven members subsequently faxed 
completed votes back to the manager during the voting period May 14 
through May 19, 1999. Thus, a fax vote was used to determined the 
Committee's level of support for an increased rate of assessment and to 
establish an operating budget for the 1999-2000 fiscal period. Those 
voting confirmed their votes at the next scheduled Committee meeting 
June 20, 1999.
    Based on the fax vote, the Committee approved an assessment rate of 
$0.02 per hundredweight of potatoes handled during the 1999-2000 and 
subsequent fiscal periods. This is a $0.01 increase over the rate 
currently in effect. The increased assessment rate is recommended 
because the current rate of $.01 would not generate enough income to 
adequately administer the program, given the projected short crop for 
1999. The assessment rate increase is based on the 1999-2000 crop 
estimate, the 1999-2000 fiscal period expenditures estimate, and the 
current and projected balance of the operating reserve.
    The Area III assessable potato crop for 1999-2000 is estimated to 
be approximately 792,000 hundredweight. This is about 380,000 
hundredweight less than the assessed crop of 1998-99 due to a reduction 
in the acreage planted this season. The increased assessment would 
ensure that the operating reserve is not depleted at the end of the 
1999-2000 fiscal period because of the projected short crop.
    The increased assessment rate of $.02 per hundredweight should 
provide $15,840 in assessment income, (792,000 hundredweight  x  $.02). 
This amount would be supplemented with $3,000 interest income, $1,500 
rental income from the sublease of office space to the State Inspection 
Service, and $4,110 from the operating reserve. These income sources 
would total $24,450, which is the same as the 1999-2000 budget 
recommended by the Committee by a vote of 6 in favor and 1 opposed. The 
recommended budget is $1,603 less than the 1998-99 budget of $26,053. 
Because of fax voting, the reason for the one negative budget vote is 
not known.
    The major expenditures recommended by the Committee for the 1999-
2000 fiscal period include $10,500 for the manager's salary, $3,000 for 
rent, and $2,000 for office supplies. Budgeted expenses for these items 
in the 1998-99 fiscal period were $11,500, $3,000, and $2,000, 
respectively.
    The Committee estimates it will have approximately $38,245 in its 
operating reserve at the end of the current fiscal period. This should 
be adequate to cover any income shortages for the current fiscal 
period. This amount is within the maximum permitted by the order of 
approximately two fiscal periods' expenditures (Sec. 948.78).
    The proposed assessment rate of $.02 would continue in effect for 
the 2000-2001 and subsequent fiscal periods unless modified, suspended, 
or terminated by the Secretary, based on recommendation and information 
submitted by the Committee, or other available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would 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 and are locally published. Committee meetings are open to 
the public and interested persons may express their views at these 
meetings. The Department would evaluate Committee recommendations and 
other available information to determine whether modification of the 
assessment rate is needed. Further rulemaking would be undertaken as 
necessary.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact this rule 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 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 17 handlers of Colorado Area III potatoes 
who are subject to regulation under the order and approximately 60 
potato producers in the regulated production area. Small agricultural 
service firms have been defined by the Small Business Administration 
(13 CFR 121.601) as those having annual receipts of less than

[[Page 37892]]

$5,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $500,000. The majority of Colorado 
Area III potato handlers and producers may be classified as small 
entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 1999-2000 and subsequent 
fiscal periods from $0.01 per hundredweight to $0.02 per hundredweight 
of potatoes handled. The $0.02 assessment rate was approved by all 
seven of the Committee members who cast votes during a fax vote held 
between May 14 and May 19, 1999. The proposed assessment rate is $0.01 
greater than the rate currently in effect. The Committee recommended 
the increased assessment rate because the current rate would not 
generate enough income to adequately administer the program. The 
anticipated fresh potato crop of 792,000 hundredweight is approximately 
380,000 hundredweight less than the 1998-99 crop. The $0.02 rate should 
provide $15,840 in assessment income, which, when combined with 
interest income of $3,000, rental income of $1,500 from the sublease of 
office space to the State Inspection Service, and $4,110 from the 
operating reserve, would be adequate to meet the 1999-2000 fiscal 
period's budgeted expenses.
    In a fax vote of six in favor and one opposed, the Committee 
recommended 1999-2000 expenditures of $24,450, which is $1,603 less 
than last year's budgeted expenses. Prior to recommending this budget, 
the Committee considered historical income and expenses, current income 
and expense levels, the 1999-2000 estimated crop production, current 
and projected operating reserve levels, and input from the Committee 
officers. The major expenditures recommended by the Committee for the 
1999-2000 fiscal period include $10,500 for the manager's salary, 
$3,000 for rent, and $2,000 for office supplies. Budgeted expenses for 
these items in the 1998-99 fiscal period were $11,500, $3,000, and 
$2,000, respectively.
    A review of historical data and preliminary information pertaining 
to the upcoming season indicates that the price to producers for the 
1999-2000 Colorado Area III potato season could average $5.30 per 
hundredweight of potatoes. Therefore, the estimated assessment revenue 
for the 1999-2000 fiscal period ($0.02  x  792,000 cwt = $15,840) as a 
percentage of the projected total revenue at the farm gate ($5.30  x  
792,000 cwt = $4,197,600) would be 0.37 percent. This figure indicates 
that the $0.02 assessment rate recommended by the Committee would have 
an insignificant impact on the Colorado potato industry.
    This action would increase 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 
would be offset by the benefits derived by the operation of the order. 
In addition, the Committee's meeting was widely publicized throughout 
the Colorado 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 May 13, 1999, 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 proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large 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 the 
opportunity to respond to this request for information and comments. 
Thirty days is deemed appropriate because: (1) The Committee needs to 
have sufficient funds to pay its expenses which are incurred on a 
continuous basis; (2) the 1999-2000 fiscal period began on July 1, 
1999, and the order requires that the rate of assessment for each 
fiscal period apply to all assessable potatoes handled during such 
fiscal period; and (3) handlers are aware of this action which is 
similar to other assessment rate actions issued in past years.

List of Subjects in 7 CFR Part 948

    Potatoes, Marketing agreements, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 948 is 
proposed to be amended as follows:

PART 948--IRISH POTATOES GROWN IN COLORADO

    1. The authority citation for 7 CFR part 948 continues to read as 
follows:

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

    2. Section 948.215 is revised to read as follows:


Sec. 948.215  Assessment rate.

    On and after July 1, 1999, an assessment rate of $0.02 per 
hundredweight is established for Colorado Area III potatoes.

    Dated: July 8, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-17892 Filed 7-13-99; 8:45 am]
BILLING CODE 3410-02-P