[Federal Register Volume 66, Number 186 (Tuesday, September 25, 2001)]
[Rules and Regulations]
[Pages 48951-48953]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23655]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 66, No. 186 / Tuesday, September 25, 2001 / 
Rules and Regulations  

[[Page 48951]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV01-948-2 IFR]


Irish Potatoes Grown in Colorado; Suspension of Continuing 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule suspends the continuing assessment rate established 
for the Colorado Potato Administrative Committee, Area III (Committee) 
for the 2001-02 and subsequent fiscal periods. The Committee, which 
locally administers the marketing order regulating the handling of 
potatoes grown in Northern Colorado, made this recommendation for the 
purpose of lowering the monetary reserve to a level consistent with 
program requirements. The fiscal period began July 1 and ends June 30. 
The assessment rate will remain suspended until an appropriate rate is 
reinstated.

EFFECTIVE DATES: September 26, 2001. Comments received by November 26, 
2001 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, 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, room 385, 
Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 
3267440; 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 Marketing 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. For the 1999-00 fiscal period, an assessment 
rate of $0.02 per hundredweight of potatoes handled was fixed by the 
Secretary to continue in effect indefinitely unless modified, 
suspended, or terminated. This action suspends the assessment rate for 
the 2001-02 fiscal period, which began on July 1, 2001, and will 
continue in effect until reinstated. 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 administration 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 suspends Sec. 948.215 of the order's rules and 
regulations. Section 948.215 established an assessment rate of $0.02 
per hundredweight of potatoes handled for 1999-00 and subsequent fiscal 
periods. Continuous assessment rates remain in effect from fiscal 
period to fiscal period unless modified, suspended, or terminated by 
the Secretary. This rule suspends the $0.02 assessment rate for 2001-02 
and will remain in effect during subsequent fiscal periods until 
reinstated by the Secretary upon recommendation of the Committee.
    Sections 948.75-948.77 of the Colorado potato order provide 
authority for the Committee, with the approval of the Secretary, to 
formulate an annual budget of expenses and to collect assessments from 
handlers to administer the program. In addition, Sec. 948.78 of the 
order authorizes the use of monetary reserve funds to cover program 
expenses. The members of the Committee are producers and handlers of 
Colorado Area III 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. Recommendations concerning the budget and assessment 
rate are formulated and discussed in a public meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.

[[Page 48952]]

    The Committee met on May 10, 2001, to discuss the proposed 2001-02 
budget and assessment rate and to take appropriate action. However, 
with only three out of nine voting members in attendance at the 
meeting, the quorum necessary for the Committee to take action was not 
present. To ensure that the Committee would have a recommendation for 
the 2001-02 fiscal period budget, the Committee's manager subsequently 
polled all Committee members by U.S. mail, as provided for in 
Sec. 948.61 of the order. The resultant unanimous recommendation by all 
nine members favored the establishment of a budget with expenditures of 
$18,200 and an assessment rate of $0.005 (\1/2\ cent) per hundredweight 
of potatoes handled during the 2001-02 fiscal period.
    However, section 948.78(a)(2) of the order specifies that the 
Committee, with the approval of the Secretary, may carry over excess 
funds into subsequent fiscal periods as a reserve, provided that funds 
already in the reserve are less than approximately two fiscal periods' 
expenses. After reviewing the Committee's initial recommendation for a 
$0.005 rate of assessment, the Department requested that the Committee 
consider suspension of the assessment rate until the reserve is lowered 
to a level consistent with the order. Consequently, at its meeting of 
July 19, 2001, the Committee unanimously recommended suspension of the 
continuing assessment rate of $0.02 for the 2001-02 and subsequent 
fiscal periods. The Committee concluded that an assessment rate will 
not be necessary for operation during the 2001-02 fiscal period as 
funds in the reserve, combined with interest and rental income, are 
adequate to meet expenses.
    As of July 1, 2001, the Committee had $59,579 in its reserve fund. 
With the 2001-02 budget set at $18,200, the current maximum reserve 
permitted by the order is approximately $36,400 (approximately two 
fiscal periods' expenses). To meet its 2001-02 expenses the Committee 
plans on drawing approximately $14,700 from its reserve, and may 
additionally earn approximately $3,500 from interest and other income. 
Thus, with a suspended assessment rate, the Committee's reserve at the 
end of the 2001-02 fiscal period could be reduced to approximately 
$44,879. Projecting a similar level of expenses in 2002-03 and 
continuation of the assessment rate suspension, the Committee's reserve 
on July 1, 2003, could be about $30,179. This amount would be 
consistent with the order's requirements.
    The major expenditures recommended by the Committee for the 2001-02 
fiscal period include $7,000 for salary, $6,300 for office expense 
(which includes equipment, telephone, and utilities), and $3,000 for 
rent. Minor expenses total $1,900. Budgeted expenses for these items in 
the 2000-01 fiscal period were $4,250, $6,800, and $3,000, 
respectively. Minor expenses totaled $3,600 that year.
    Although the Committee foresees a need for the suspension of the 
continuing assessment rate established in this rule to continue in 
effect for approximately two fiscal periods, it will remain suspended 
until reinstated by the Secretary upon recommendation and information 
submitted by the Committee or other available information.
    Since the suspension of the assessment rate will continue for such 
subsequent fiscal periods as necessary to ensure that the monetary 
reserve is lowered to a level consistent with the order, the Committee 
will continue to meet prior to or during each fiscal period to 
recommend a budget of expenses and consider recommendations for 
reinstatement 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 such as the level of 
the budget and the monetary reserve to determine whether assessment 
rate reinstatement is needed, and at what level. Further rulemaking 
will be undertaken as necessary. The Committee's 2001-02 budget has 
been reviewed and approved by the Department and budgets for subsequent 
fiscal periods will also 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 26 producers of Colorado Area III potatoes 
in the production area and approximately 11 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 $750,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000.
    Information for the most recent season in which statistics are 
available, as reported 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 average yield per acre was 340 hundredweight, 
the average farm size was 53 acres, and the season average producer 
price was $5.95 per hundredweight. This equates to average gross 
receipts to producers of approximately $107,200. Furthermore, based 
upon information provided by the Committee, all handlers of Area III 
potatoes have shipped under $5,000,000 worth of potatoes during the 
most recent season for which numbers are available. Based on the 
foregoing, it can be concluded that a majority of producers and 
handlers of Area III potatoes may be classified as small entities, 
excluding receipts from other sources.
    This rule suspends Sec. 948.215 of the order's rules and 
regulations, which established an assessment rate of $0.02 per 
hundredweight of potatoes handled beginning with the 1999-00 fiscal 
period. This suspension will be in effect for the 2001-02 fiscal period 
and will remain in effect until reinstated.
    Without assessment income to offset its 2001-02 budget of $18,200, 
the Committee plans on drawing approximately $14,700 from its reserve, 
and may additionally earn approximately $3,500 from interest and other 
income.
    The major expenditures recommended by the Committee in the 2001-02 
fiscal period budget include $7,000 for salary, $6,300 for office 
expenses, and $3,000 for rent. Minor expenses total $1,900. In 
comparison, the Committee's 2000-01 fiscal period budget of $17,650 
included major expenses of $4,250, $6,800, and $3,000, respectively. 
Minor expenses totaled $3,600.
    The Committee recommended that assessment collection be suspended 
until such time as the monetary reserve reaches a level consistent with 
the order

[[Page 48953]]

requirement of less than approximately two fiscal periods' expenses. 
The Committee believes that by suspending the assessment rate for at 
least the next two fiscal periods, the operating reserve should be 
lowered to an amount consistent with the program. Based on Committee 
projections, the current reserve of $59,579 will be reduced to about 
$44,879 by the end of the 2001-02 fiscal period, and to about $30,179 
by the end of the 2002-03 fiscal period.
    Prior to recommending the suspension of the continuing assessment 
rate, the Committee discussed alternatives, including its earlier 
recommended assessment rate of $0.005 per hundredweight. However, the 
Committee concurred with the Department's position that a suspension of 
the assessment rate is viable since it could rely on its reserve and 
other income to meet budgeted expenses, and that such a suspension 
would expedite the reduction of the reserve. Another alternative 
considered by the Committee was to refund the portion of the reserve 
that is over that permitted by the order directly to handlers of 
record. Because many of the handlers assessed in prior years are no 
longer in business, the Committee concluded this would not be 
equitable.
    This action will reduce handler costs by almost $9,000 (448,750 
hundredweight of assessable potatoes  x  the current rate of assessment 
of $0.02) during the 2001-02 fiscal period, as no assessment will be 
collected. Suspension of the assessment rate will reduce the burden on 
handlers, and may reduce the burden on producers. In addition, the 
Committee's meetings were widely publicized throughout the Colorado 
Area III potato industry and all interested persons were invited to 
attend the meetings and participate in Committee deliberations on all 
issues. Like all Committee meetings, the May 10 and July 19, 2001, 
meetings were open to the public 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 Colorado Area III 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.
    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 the continuing 
assessment rate established at 64 FR 48081 no longer tends to 
effectuate the declared policy of the Act. The suspension shall 
continue in effect until an assessment rate is reinstated by the 
Secretary, upon recommendation and information submitted by the 
Committee, or other available information.
    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) This action relieves restrictions on handlers by 
suspending the assessment rate beginning with the 2001-02 fiscal 
period; (2) the 2001-02 fiscal period began on July 1, 2001, and this 
action should be effective as soon as possible; (3) handlers are aware 
of this action which was unanimously recommended by the Committee at a 
public meeting; and (4) this interim final rule provides a 60-day 
comment period, and all comments timely received will be considered 
prior to finalization of this rule.

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 
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.


Sec. 948.215  [Suspended]

    2. In Part 948, Sec. 948.215 is suspended in its entirety.

    Dated: September 17, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-23655 Filed 9-24-01; 8:45 am]
BILLING CODE 3410-02-M