[Federal Register Volume 66, Number 149 (Thursday, August 2, 2001)]
[Proposed Rules]
[Pages 40153-40155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19265]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV01-948-3 PR]


Irish Potatoes Grown in Colorado; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Colorado Potato Administrative Committee, Area II (Committee) for 
the 2001-02 and subsequent fiscal periods from $0.0015 to $0.0035 per 
hundredweight of potatoes handled. The Committee locally administers 
the marketing order, which regulates the handling of potatoes grown in 
Colorado. Authorization to assess potato handlers enables the Committee 
to incur expenses that are reasonable and necessary to administer the 
program. The fiscal period begins September 1 and ends August 31. The 
assessment rate would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by September 4, 2001.

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, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; Fax: 
(202) 720-8938, 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, or can be 
viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Dennis L. West, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, suite 385, 
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) 720-8938.
    Small businesses may request information on complying 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) 
720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 97 and Order No. 948, both as amended (7 CFR part 948), 
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 assessments. It is intended that the assessment rate as 
proposed herein would be applicable to all assessable potatoes 
beginning on September 1, 2001, 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 2001-02 and subsequent fiscal periods from $0.0015 to 
$0.0035 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 members of the Committee are producers and handlers of 
Colorado Area II potatoes. 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

[[Page 40154]]

formulated and discussed in a public meeting. Thus, all directly 
affected persons have an opportunity to participate and provide input.
    For the 1998-99 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate 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 May 17, 2001, and unanimously recommended 
2001-02 expenditures of $73,618 and an assessment rate of $0.0035 per 
hundredweight of potatoes handled. In comparison, last year's budgeted 
expenditures were $71,132. The assessment rate of $0.0035 is $0.002 
higher than the rate currently in effect. For budget purposes, the 
committee projected the quantity of assessable potatoes for 2001-02 at 
16,500,000 hundredweight and assessment revenue of $57,750 ($0.0035 x 
16,500,000 hundredweight). The Committee recommended the increased 
assessment rate because the current rate of $0.0015 would not generate 
enough income to adequately administer the program through the 2001-02 
fiscal period. The major expenditures recommended by the Committee for 
the 2001-02 year include $40,793 for salaries, $9,950 for office 
expenses, which include telephone service, supplies and postage, and 
$7,650 for building maintenance. Budgeted expenses for these items in 
2000-01 were $39,793, $10,700, and $6,250, respectively.
    The Committee developed the $0.0035 assessment rate recommendation 
by taking into consideration the 2001-02 budget, the estimated 2001-02 
potato crop, the relatively small size of the current monetary reserve 
($32,000), and other factors such as the recent attrition in farms and 
handlers. Although the recommended increase would more than double the 
current assessment rate, the Committee may need to draw up to an 
additional $15,868 from its reserves to meet budgeted expenses. The 
current reserve of approximately $32,000 is below the maximum amount 
authorized by the order of approximately two fiscal periods' expenses 
(Sec. 948.78). At the current rate, funds to cover anticipated expenses 
would not be adequate.
    As mentioned earlier, based on projected shipments of 16,500,000 
hundredweight, the recommended assessment rate of $0.0035 should 
provide $57,750 in assessment income. Income from such hander 
assessments, combined with interest income and funds from the 
Committee's authorized reserve, would be adequate to meet budgeted 
expenses for the 2001-02 fiscal period.
    The proposed assessment rate would 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 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. 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. The Committee's 
2001-02 budget and those for subsequent fiscal periods would be 
reviewed and, as appropriate, approved by the Department.

Initial Regulatory Flexibility Analysis

    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 250 producers of Colorado Area II potatoes 
and approximately 93 handlers subject to regulation under the marketing 
order. Small agricultural producers are defined by the Small Business 
Administration (13 CFR 121.201) 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.
    Based upon information provided by the Committee, 96 percent of the 
handlers of Area II potatoes have shipped under $5,000,000 worth of 
potatoes during the most recent season for which statistics are 
available. In addition, information provided by the National 
Agricultural Statistics Service was considered in determining the 
number of large and small producers by acreage, production, and 
producer prices. According to the information provided, the recent 
average yield per acre was 335 hundredweight of potatoes, and the 
recent season average producer price was $4.20 per hundredweight. This 
equates to average gross annual producer receipts of approximately 
$430,542 each. Based on the foregoing, it can be concluded that a 
majority of producers and handlers of Area II potatoes may be 
classified as small entities, excluding receipts from other sources.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2001-02 and subsequent 
fiscal periods from $0.0015 to $0.0035 per hundredweight of potatoes 
handled. The Committee unanimously recommended 2001-02 expenditures of 
$73,618 and an assessment rate of $0.0035 per hundredweight. The 
proposed assessment rate of $0.0035 is $0.002 more than the rate 
currently in effect and would increase the financial burden on handlers 
by approximately $33,000. The quantity of assessable fresh potatoes for 
the 2001-02 season is estimated at 16,500,000 hundredweight. The 
$0.0035 rate should provide $57,750 in assessment income which, when 
combined with interest income and income from the Committee's monetary 
reserve, would be adequate to cover budgeted expenses. The current rate 
would not provide enough funds to cover anticipated expenses.
    The major expenditures recommended by the Committee for the 2001-02 
year include $40,793 for salaries, $9,950 for office expenses, which 
include telephone service, supplies and postage, and $7,650 for 
building maintenance. Budgeted expenses for these items in 2000-01 were 
$39,793, $10,700, and $6,250, respectively.
    The Committee recommended the increased assessment rate to help 
offset higher administration costs and to decrease the rate in which 
the monetary reserve has been relied upon in recent fiscal periods. 
Based on the Committee's 2001-02 crop estimate, the current reserve of 
$32,000 could be reduced by as much as $15,868 with the recommended 
assessment rate.
    The Committee reviewed and unanimously recommended 2001-02

[[Page 40155]]

expenditures of $73,618. This compares to last year's approved budget 
of $71,132. Prior to arriving at a budget, alternative expenditures and 
assessment levels were discussed by the Committee, including higher and 
lower rates of assessment. When considering the relatively poor 
economic returns the industry has faced during the past six seasons and 
the resultant instability within the potato industry, as well as the 
2001-02 budget and the current size of the monetary reserve ($32,000), 
the Committee concluded that an increase in the rate of assessment to 
$0.0035 per hundredweight of potatoes would allow it to properly 
administer the program.
    A review of historical information, as well as preliminary 
information pertaining to the upcoming fiscal period, indicates that 
the producer price for the 2001-02 season could range between $2.06 and 
$7.35 per hundredweight of potatoes. Therefore, the estimated 
assessment revenue for the 2001-02 fiscal period as a percentage of 
total producer revenue could range between 0.170 and 0.048 percent.
    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 Area II 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 17, 
2001, 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 small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2001-02 fiscal period begins on September 1, 2001, and 
the order requires that the rate of assessment for each fiscal period 
apply to all assessable potatoes handled during such fiscal period; (2) 
the Committee needs to have sufficient funds to pay its expenses which 
are incurred on a continuous basis; and (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.

List of Subjects in 7 CFR Part 948

    Marketing Agreements, Potatoes, 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 948.216 is revised to read as follows:


Sec. 948.216  Assessment rate.

    On and after September 1, 2001, an assessment rate of $0.0035 per 
hundredweight is established for Colorado Area II potatoes.

    Dated: July 27, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-19265 Filed 8-1-01; 8:45 am]
BILLING CODE 3410-02-P