[Federal Register Volume 68, Number 167 (Thursday, August 28, 2003)]
[Proposed Rules]
[Pages 51713-51716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21990]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

[Docket No. FV03-945-1 PR]


Irish Potatoes Grown in Certain Designated Counties in Idaho, and 
Malheur County, Oregon; 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 Idaho-Eastern Oregon Potato Committee (Committee) for the 2003-04 
and subsequent fiscal periods from $0.0026 to $0.0045 per hundredweight 
of potatoes handled. The Committee locally administers the marketing 
order which regulates the handling of Irish potatoes grown in certain 
designated counties in Idaho, and Malheur County, Oregon. Authorization 
to assess potato handlers enables the Committee to incur expenses that 
are reasonable and appropriate to administer the program. The fiscal 
period begins August 1 and ends July 31. The increased assessment rate 
would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by September 12, 2003.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. 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]. 
All 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: Barry Broadbent, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, Suite 385, 
Portland,

[[Page 51714]]

Oregon 97204-2807; Telephone: (503) 326-2724, Fax: (503) 326-7440 or E-
mail: [email protected]; 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. 98 and Marketing Order No. 945, both as amended (7 CFR 
part 945), regulating the handling of Irish potatoes grown in certain 
designated counties in Idaho, and Malheur County, Oregon, 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, Idaho-Eastern 
Oregon 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 August 1, 2003, and continue until 
amended, suspended, or terminated. This rule would 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 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 increase the assessment rate established for the 
Committee for the 2003-04 and subsequent fiscal periods from $0.0026 to 
$0.0045 per hundredweight of potatoes handled.
    Section 945.40 of the order provides authority for the Committee, 
with the approval of the Secretary, to incur reasonable expenses for 
its maintenance and functioning. Section 945.41 requires the Committee 
to formulate an annual budget estimating its income and expenditures 
for the upcoming fiscal year and to present such budget to the 
Secretary for approval. Section 945.42(a) authorizes the Committee to 
assess handlers for their pro rata share of such expenses and Sec.  
945.42(b) provides that the rate of assessment be set by the Secretary 
based on the recommendation of the Committee. The members of the 
Committee are producers and handlers of potatoes grown in Idaho and 
Eastern Oregon. They are familiar with the Committee's needs and with 
the costs for goods and services in their local area and are therefore 
in a position to formulate an appropriate budget and assessment rate. 
The assessment rate was discussed in a public meeting before the 
Committee members voted to recommend an increase. Thus, all directly 
affected persons had an opportunity to participate and provide input.
    For the 1996-97 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on June 16, 2003, and unanimously recommended 
2003-04 expenditures of $149,417 and an assessment rate of $0.0026 per 
hundredweight of potatoes handled, the same rate currently in effect. 
The Committee estimated the 2003-04 potato shipments at 36,500,000 
hundredweight, which would generate $94,900 in assessment revenue. At 
that meeting, the Committee discussed increasing the assessment rate to 
respond to rising Committee expenses, declining assessment revenue, and 
shrinking operating reserves. After discussion, the Committee postponed 
any action until later in the fiscal period, believing that assessment 
revenue and operating reserves were sufficient to maintain Committee 
operations through the fiscal period.
    As a consequence, the Committee conducted a telephone vote on July 
18, 2003, and unanimously recommended a revised budget of $145,317 
(down from $149,417) and to raise the assessment rate to $0.0045 per 
hundredweight of potatoes handled (up from $0.0026). In comparison, 
last fiscal period's budgeted expenditures were $137,094. The 
recommended assessment rate is $0.0019 higher than the rate currently 
in effect. The increase is necessary to offset an increase in salaries 
and operating expenses, declining potato shipments, and the depletion 
of operating reserves.
    The major expenditures recommended by the Committee for the 2003-04 
fiscal period include $95,067 for salaries and benefits, $16,500 for 
transportation, $13,500 for travel, $6,800 for rent and utilities, and 
$4,800 for office expenses. Budgeted expenses for these items in 2002-
2003 were $92,144, $9,000, $14,000, $6,300, and $6,500, respectively. 
The transportation budget item covers the purchase of a new Committee 
vehicle and all of the operating and maintenance costs associated with 
it. The manager uses a Committee vehicle for handler compliance visits 
throughout the season, and other authorized Committee activities. 
Travel covers the cost of travel, lodging, and meals for the Committee 
manager and members when attending Committee meetings and conventions 
involving Committee authorized business.
    The Committee estimates potato shipments for the 2003-04 fiscal 
period at 36,500,000 hundredweight, which should provide $164,250 in 
assessment income at the proposed assessment rate. This income would be 
adequate to cover budgeted expenses. The Committee estimates that 
monetary reserves will be approximately $33,000 at the beginning of the 
2003-04 fiscal period and will potentially increase to $51,933 by the 
fiscal period end. The order permits an operating reserve in an amount 
not to exceed approximately one fiscal period's budgeted expenses 
(Sec.  945.44). Funds held in reserve would be kept within the maximum 
permitted by the order.
    The proposed 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

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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 2003-04 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.
    There are approximately 900 producers of potatoes in the production 
area and approximately 54 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.
    Based on a three-year average fresh potato production of 35,448,000 
hundredweight as calculated from Committee records, a three-year 
average of producer prices of $6.10 per hundredweight reported by the 
National Agricultural Statistics Service, and 900 Idaho-Eastern Oregon 
potato producers, the average annual producer revenue is approximately 
$240,259. It can be concluded, therefore, that most of these producers 
would be classified as small entities.
    In addition, based on Committee records and 2002-03 f.o.b. shipping 
point prices ranging from $5.00 to $35.00 per hundredweight reported by 
USDA's Market News Service, many of the Idaho-Eastern Oregon potato 
handlers may ship over $5,000,000 worth of potatoes. In view of the 
foregoing, few of the handlers may be classified as small entities as 
defined by the SBA.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2003-04 and subsequent 
fiscal periods from $0.0026 to $0.0045 per hundredweight of potatoes 
handled. The Committee unanimously recommended 2003-04 expenditures of 
$145,317 and an assessment rate of $0.0045 per hundredweight. The 
proposed assessment rate is $0.0019 per hundredweight higher than the 
rate currently in effect. The quantity of assessable potatoes for the 
2003-04 fiscal period is estimated to be 36,500,000 hundredweight. 
Income derived from handler assessments (approximately $164,250) would 
be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2003-04 
fiscal period include $95,067 for salaries and benefits, $16,500 for 
transportation, $13,500 for travel, $6,800 for rent and utilities, and 
$4,800 for office expenses. Budgeted expenses for these items in 2002-
2003 were $92,144, $9,000, $14,000, $6,300, and $6,500, respectively.
    The assessment rate increase is necessary to offset increases in 
salaries and operating expenses, declining potato shipments, and the 
depletion of operating reserves. The Committee estimates the reserve to 
be $33,000 at the 2002-03 fiscal period end. At the current rate of 
$0.0026 per hundredweight, on the estimated potato production of 
36,500,000 hundredweight for the 2003-04 fiscal period, the projected 
income for the 2003-04 fiscal period would be $94,900. This amount, 
along with the projected reserve of $33,000, would be approximately 
$19,417 less than required to fund the proposed 2003-04 budget and 
$9,194 less than the 2002-03 budgeted amount. Thus, the Committee 
believes that the projected assessment income at the current assessment 
rate and funds held in reserve would not be sufficient to fund the 
Committee's operations without increasing the assessment rate.
    At the recommended rate of $0.0045 per hundredweight (assessment 
income of $164,250) and expenditures of $145,317, the Committee may 
increase its reserve by up to $18,933. The projected reserve would be 
approximately $51,933 on July 31, 2004, which the Committee determined 
to be both appropriate and acceptable.
    The Committee considered alternate levels of assessment but 
determined that increasing the assessment rate to $0.0045 per 
hundredweight would allow the Committee to adequately fund operations 
and replenish the reserve to an acceptable level. The Committee decided 
that any assessment rate between $0.0026 per hundredweight and $0.0045 
per hundredweight would not be sufficient to accomplish the Committee's 
goals. Prior to arriving at the budget and assessment rate 
recommendations, the Committee considered information from various 
sources, including the Committee's Finance and Executive Committees.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2003-04 fiscal period could range between $4.50 and $6.00 
per hundredweight of potatoes. Therefore, the estimated assessment 
revenue as a percentage of total producer revenue could range between 
0.1 and 0.075 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, this cost 
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 Idaho-Eastern Oregon 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 June 16, 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 production area 
commodity 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

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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 fiscal period is August 1 to July 31 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) 
handlers usually begin shipping Idaho-Eastern Oregon potatoes on or 
about August 1; (3) the Committee needs to have sufficient funds to pay 
its expenses which are incurred on a continuous basis; and (4) handlers 
are aware of this action which was unanimously recommended by the 
Committee and is similar to other assessment rate actions issued in 
past years.

List of Subjects in 7 CFR Part 945

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 945 is 
proposed to be amended as follows:

PART 945--POTATOES GROWN IN DESIGNATED COUNTIES IN IDAHO, AND 
MALHEUR COUNTY, OREGON

    1. The authority citation for 7 CFR part 945 continues to read as 
follows:

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

    2. Section 945.249 is revised to read as follows:


Sec.  945.249  Assessment rate.

    On and after August 1, 2003, an assessment rate of $0.0045 per 
hundredweight is established for Idaho-Eastern Oregon potatoes.

    Dated: August 22, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-21990 Filed 8-27-03; 8:45 am]
BILLING CODE 3410-02-P