[Federal Register Volume 67, Number 25 (Wednesday, February 6, 2002)]
[Rules and Regulations]
[Pages 5440-5442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2846]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV01-948-2 FIR]


Irish Potatoes Grown in Colorado; Suspension of Continuing 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, without 
change, an interim final rule which continues to suspend the 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, 2001, and ends June 30, 2002. The assessment rate will remain 
suspended until an appropriate rate is reinstated.

EFFECTIVE DATE: March 8, 2002.

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) 326-
7440; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; 
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, 1400 Independence 
Avenue SW, STOP 0237, Washington, DC 20250-0237; 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 USDA 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 USDA 
to continue in effect indefinitely unless modified, suspended, or 
terminated. This action continues to suspend 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 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 USDA 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

[[Page 5441]]

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 USDA 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 USDA'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 continues to suspend 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 USDA. This rule continues to suspend the $0.02 assessment 
rate for 2001-02, and will continue to suspend such assessment rate 
during subsequent fiscal periods until reinstated by USDA upon 
recommendation of the Committee.
    Sections 948.75 through 948.77 of the Colorado potato order provide 
authority for the Committee, with the approval of USDA, 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.
    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, Sec. 948.78(a)(2) of the order specifies that the 
Committee, with USDA's approval, 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, USDA 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.
    The Committee foresees a need for the assessment rate suspension to 
continue in effect for approximately two fiscal periods. The assessment 
rate will remain suspended, however, until reinstated by USDA 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 USDA. Committee meetings 
are open to the public and interested persons may express their views 
at these meetings. The USDA 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 USDA and budgets for subsequent fiscal periods will also be 
reviewed and, as appropriate, approved by USDA.

Final 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 final 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

[[Page 5442]]

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.
    This rule continues to suspend 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 assessment rate suspension is effective for the 2001-02 
fiscal period and subsequent fiscal periods 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 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 USD'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. However, 
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 reduces 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 were 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 USDA has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    An interim final rule regarding this action was published in the 
Federal Register on September 25, 2001 (66 FR 48951). A copy of that 
rule was sent to the Committee's manager, who in turn provided copies 
to Committee members, handlers, and other interested persons. The 
interim final rule was also made available through the Internet by the 
Office of the Federal Register and USDA. A 60-day comment period was 
provided for interested persons to respond to the interim final rule. 
The comment period ended on November 26, 2001. No comments were 
received.
    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 finalizing the interim 
final rule, without change, as published in the Federal Register (66 FR 
48951, September 25, 2001) will tend to effectuate the declared policy 
of the Act.

List of Subjects in 7 CFR Part 948

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

PART 948--IRISH POTATOES GROWN IN COLORADO

    Accordingly, the interim final rule amending 7 CFR part 948 which 
was published at 66 FR 48951 on September 25, 2001, is adopted as a 
final rule without change.

    Dated: January 31, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-2846 Filed 2-5-02; 8:45 am]
BILLING CODE 3410-02-P