[Federal Register Volume 68, Number 144 (Monday, July 28, 2003)]
[Proposed Rules]
[Pages 44239-44241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19130]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV03-948-2 PR]


Irish Potatoes Grown in Colorado; Reinstatement of the Continuing 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would reinstate the continuing assessment rate 
established for the Area No. 3 Colorado Potato Administrative Committee 
(Committee) for the 2003-2004 and subsequent fiscal periods at $0.03 
per hundredweight of potatoes handled. The Committee locally 
administers the marketing order regulating the handling of potatoes 
grown in northern Colorado. The continuing assessment rate was 
suspended for the 2001-2002 and subsequent fiscal periods to bring the 
monetary reserve within the program limit of two fiscal periods' 
operating expenses. Authorization to assess potato handlers enables the 
Committee to incur expenses that are reasonable and necessary to 
administer the program. The 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 12, 2003.

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, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; 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: Teresa Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW 
Third Avenue, suite 385, Portland, Oregon 97204; 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 Order No. 948, both as amended (7 CFR part 948), 
regulating the handling of 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 (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 marketing 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 July 1, 2003, 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 USDA a petition 
stating that the order, any provision of the order, or any

[[Page 44240]]

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 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 would reinstate Sec.  948.215 of the order's rules and 
regulations and establish a continuing assessment rate for the 
Committee for the 2003-2004 and subsequent fiscal periods at $0.03 per 
hundredweight of potatoes handled.
    The Colorado potato marketing order provides authority for the 
Committee, with the approval of USDA, 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 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 formulated and discussed in a public meeting. 
Thus, all directly affected persons have an opportunity to participate 
and provide input.
    For the 2001-2002 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, a suspension of the continuing 
assessment rate that would remain suspended until reinstated by USDA 
upon recommendation and information submitted by the Committee or other 
information available to USDA.
    The Committee met on May 8, 2003, and unanimously recommended 2003-
2004 expenditures of $19,737 and an assessment rate of $0.03 per 
hundredweight of potatoes. In comparison, last year's budgeted 
expenditures were also $19,737. For the 2001-2002 fiscal period, the 
Committee recommended suspending the continuing assessment rate to 
bring the monetary reserve within program limits of approximately two 
fiscal periods' operating expenses (Sec.  948.78). At that time, the 
reserve fund contained about $60,000. The Committee has been operating 
for the last two years by drawing income from its reserve. With a 
suspended assessment rate and a significant decrease in the number of 
potato producers and acreage in Area No. 3, the reserve has rapidly 
decreased to the current level of about $24,077. The Committee would 
like to maintain the reserve at approximately this level, thus 
reinstatement of the assessment rate at $0.03 per hundredweight is 
needed.
    The major expenditures recommended by the Committee for the 2003-
2004 fiscal period include $8,200 for salaries, $3,000 for rent 
expense, and $1,750 for office expenses. Budgeted expenses for these 
items in 2002-2003 were also $8,200, $3,000, and $1,750, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Colorado 
potatoes. Colorado potato shipments for the year are estimated at 
632,500 hundredweight which should provide $18,975 in assessment 
income. Income derived from handler assessments along with interest and 
rent income should be adequate to cover budgeted expenses. Funds in the 
reserve (estimated at $24,077 as of June 30, 2003) would be kept within 
the maximum permitted by the order (approximately two fiscal period's 
expenses; Sec.  948.78).
    The reinstated assessment rate would continue in effect 
indefinitely unless modified, suspended, or terminated by USDA 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA 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 2003-2004 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

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.
    Based on Committee data, there are 12 producers, (9 of whom are 
also handlers) and 10 handlers (9 of whom are also producers) in the 
production area subject to regulation under the order. Small 
agricultural firms are defined by the Small Business Administration (13 
CFR 121.201) as those having annual receipts of less than $5,000,000, 
and small agricultural producers are defined as those whose annual 
receipts are less than $750,000.
    Based on Committee data, the production of Area No. 3 Colorado 
potatoes for the 2001-2002 marketing year was 773,053 hundredweight. 
Based on National Agricultural Statistics Service data, the average 
producer price for Colorado summer potatoes for the 2001-2002 marketing 
year was $6.70 per hundredweight. The average annual producer revenue 
for the 12 Colorado Area No. 3 potato producers is therefore calculated 
to be approximately $431,621. Using Committee data regarding each 
individual handler's total shipments during the 2001-2002 marketing 
year and a Committee estimated average f.o.b. price during the 2001-
2002 marketing year of $8.80 per hundredweight ($6.70 per hundredweight 
plus estimated packing and handling costs of $2.10 per hundredweight), 
all of the Colorado Area No. 3 potato handlers ship under $5,000,000 
worth of potatoes. In view of the foregoing, it can be concluded that 
the majority of the Colorado Area No. 3 potato producers and handlers 
may be classified as small entities.
    This rule would reinstate Sec.  948.215 of the order's rules and 
regulations and establish a continuing assessment rate for the 
Committee, to be collected from handlers for the 2003-2004 and 
subsequent fiscal periods, at $0.03 per hundredweight of potatoes. The 
Committee recommended 2003-2004 expenditures of $19,727 and an 
assessment rate of $0.03 per hundredweight. The quantity of Area No. 3 
Colorado potatoes for the 2003-2004 fiscal period is estimated at 
632,500 hundredweight. Thus, the $0.03 rate should provide $18,975 in 
assessment income. This together with interest and rent income should 
be

[[Page 44241]]

adequate to meet this fiscal period's budgeted expenses.
    The major expenditures recommended by the Committee for the 2003-
2004 fiscal period include $8,200 for salaries, $3,000 for rent 
expense, and $1,750 for office expenses. Budgeted expenses for these 
items in 2002-2003 were also $8,200, $3,000, and $1,750, respectively.
    For the 2001-2002 fiscal period, the Committee recommended 
suspending the continuing assessment rate to bring the monetary reserve 
within program limits of approximately two fiscal periods' operating 
expenses (Sec.  948.78). At that time, the reserve fund contained about 
$60,000. The Committee has been operating for the last two years by 
drawing income from its reserve. With a suspended assessment rate and a 
significant decrease in the number of potato producers and acreage in 
Area No. 3, the reserve has rapidly decreased to the current level of 
about $24,000. The Committee would like to maintain the reserve at 
approximately this level, thus reinstatement of the assessment rate is 
needed.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels. Lower assessment rates were considered, 
but not recommended because they would not generate the income 
necessary to administer the program with adequate reserves.
    The assessment rate of $0.03 per hundredweight of assessable 
potatoes was determined by dividing the total recommended budget by the 
quantity of assessable potatoes, estimated at 632,500 hundredweight for 
the 2003-2004 fiscal period. This is approximately $1,402 above the 
anticipated expenses when combined with interest and rent income, which 
the Committee determined to be acceptable.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2003-2004 fiscal period could range between $5.10 and 
$6.70 per hundredweight of Colorado summer potatoes. Therefore, the 
estimated assessment revenue for the 2003-2004 fiscal period as a 
percentage of total producer revenue could range between 0.45 and 0.59 
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 
marketing order. In addition, the Committee's meeting was widely 
publicized throughout the Area No. 3 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 8, 2003, 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 Colorado Area No. 3 
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.
    USDA 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 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2003-2004 fiscal period began on July 1, 2003, and the 
marketing 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 for 
expenses which are incurred on a continuous basis; and (3) handlers are 
aware of this action which was 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 948.215 is reinstated and revised to read as follows:


Sec.  948.215  Assessment rate.

    On and after July 1, 2003, an assessment rate of $0.03 per 
hundredweight is established for Colorado No. 3 potatoes.

    Dated: July 23, 2003.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 03-19130 Filed 7-25-03; 8:45 am]
BILLING CODE 3410-02-P