[Federal Register Volume 68, Number 200 (Thursday, October 16, 2003)]
[Rules and Regulations]
[Pages 59524-59527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26177]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

[Docket No. FV03-945-1 FR]


Irish Potatoes Grown in Certain Designated Counties in Idaho, and 
Malheur County, Oregon; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases 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 began August 1 and ends July 31. The increased assessment rate 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

EFFECTIVE DATE: October 17, 2003.

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, 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

[[Page 59525]]

issued herein will be applicable to all assessable potatoes beginning 
on August 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 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 increases 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 have 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.
    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.
    This 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 issued assessment rate. This income should be 
adequate to cover budgeted expenses. The Committee estimated monetary 
reserves to be approximately $33,000 at the beginning of the 2003-04 
fiscal period. The reserves could 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 will be kept within the 
maximum permitted by the order.
    The assessment rate established in this rule will 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 will be in effect for an indefinite 
period, the Committee will 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 will 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.

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 900 producers of potatoes in the production 
area and approximately 54 handlers subject to regulation under the 
marketing order. Small agricultural

[[Page 59526]]

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 
may 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 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 increases 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 
2002-03 rate. 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) should 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 estimated the reserve to 
be $33,000 at the 2002-03 fiscal period end. At the current rate of 
$0.0026 per hundredweight, and 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, is 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 will 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 increases 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 
are 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.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large Idaho-Eastern Oregon 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 proposed rule concerning this action was published in the Federal 
Register on August 28, 2003 (68 FR 51713). Copies of the proposed rule 
were also mailed or sent via facsimile to all potato handlers. Finally, 
the proposal was made available through the Internet by the Office of 
the Federal Register and USDA. A 15-day comment period ending September 
12, 2003, was provided for interested persons to respond to the 
proposal. 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 this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because the 2003-2004 
fiscal period began on August 1, and the marketing order requires that 
the rate of assessment for each fiscal period apply to all assessable 
Idaho-Eastern Oregon potatoes handled during such fiscal period. 
Further, handlers are aware of this rule which was unanimously 
recommended by the Committee. Also, a 15-day comment period was 
provided for in the proposed rule, and no comments were received.

List of Subjects in 7 CFR Part 945

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 945 is amended as 
follows:

[[Page 59527]]

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

0
1. The authority citation for 7 CFR part 945 continues to read as 
follows:

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

0
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: October 9, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-26177 Filed 10-15-03; 8:45 am]
BILLING CODE 3410-02-P